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Aren't they effectively just offloading this whole question onto the apps? For the sake of argument, let's say what they are charging for the API is about 80% p

Aren't they effectively just offloading this whole question onto the apps? For the sake of argument, let's say what they are charging for the API is about 80% per-user of what they make for users who use the official app (and therefore see ads). I have no idea what the actual numbers are, this is just theoretical. In that case, app developers have several options: * start showing users ads, and use that to pay both themselves and Reddit * start charging a monthly fee for the app, and use that to pay both themselves and Reddit * some combination of these two (e.g. pay a subscription for ad-free use) Sure, Reddit could make this easier for app developers, but isn't it all basically the same thing at the end of the day? Reddit wants (or needs? I have no idea what their financials look like) to make a certain amount of money per-user or per page view. Apps take home ~100% of their profits currently, and make Reddit ~nothing. So Reddit is pricing in a profit rate into API access. I mean, just to look at Apollo, they have 166K ratings on the Apple App Store, and surely far more users than that. Reddit wants $20M a year from them. That's high, maybe too high, but how does it compare to the value of (say) a million users a year on the official Reddit app? If Apollo switched to a subscription model on which they charged $1 a month to users, would they be able to pay Reddit's API fees? (Assuming those API fees would drop by at least 50% after non-paying users quit using Apollo.)

whimsicalism 3y ago
> I have no idea what the actual numbers are, this is just theoretical. The issue is that the actual numbers are closer to 2,000%, not 80%. [0] [0]: https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/ https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_ca...
- MostlyStable 3y ago
  The comment you are responding to is talking about revenue, not costs. Very different.
  - whimsicalism 3y ago
    Read before correcting, I am also talking about revenue.
    - deleted 3y ago
      [deleted]
bbatsell 3y ago
Nearly every element of your comment is blatantly wrong, some directly addressed by the post this comment thread is discussing. - Reddit is charging the equivalent of 20x its published revenue per user for the API. - The new API agreements ban the display of any advertising by API users. (Apollo did not show ads, but other third-party clients did, and Reddit claims the low quality of ads was harming Reddit by association.) - Charging $5/month would be break-even given the API pricing, and only for new customers. Apollo would still have to serve earlier subscribers at a huge loss. API fees would certainly not “drop by 50%” — the vast majority of people subscribing to Apollo are power users, so the average API usage per customer would _increase_.
- bscphil 3y ago
  I say pretty clearly that I'm talking about purely theoretical numbers. The underlying fact is that the status quo is probably unsustainable for Reddit. It's hard to be "blatantly wrong" about a series of hypotheticals, IMO. There's a lot of strange stuff happening in your comment. On the one hand, let's take for granted that Reddit is charging 20x its revenue per average user for the API. But that's just the average user; as you yourself point out "the vast majority of people subscribing to Apollo are power users". Surely they are worth much more to Reddit than the average, extremely casual user? The underlying problem explained in the post is that the author pre-sold access to Reddit through an app to users, while this access was actually conditioned on the continuing availability of access to the Reddit API. No doubt this does put the author in an uncomfortable position! Given that the current plan is to shut down the app anyway, surely cancelling active subscriptions should also be on the table? Subscribers are going to lose access to Reddit through Apollo either way! So realistically, what we're talking about here is whether $5/month is a reasonable price point for power users. My answer is... maybe? I think my instinct is to say that this is all ultimately the place where negotiations are supposed to happen. Reddit needs to go from making zero dollars off the API to making something. Is what they want to charge too high? Probably so. But a lot of people are acting as if any charge at all is untenable.
  - whimsicalism 3y ago
    > But a lot of people are acting as if any charge at all is untenable. Is that the case? Every reaction I have seen has been to the magnitude of the price, which is much, much, much more than what Reddit makes off of users
darkarmani 3y ago
Isn't that why Apollo said they'd sell the company for $10M to Reddit if they wanted to take it over? If it costs Reddit $20M/year, surely they could make more than $10M/year if they took it over themselves.

whimsicalism 3y ago

> I have no idea what the actual numbers are, this is just theoretical. The issue is that the actual numbers are closer to 2,000%, not 80%. [0] [0]: https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/ https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_ca...

MostlyStable 3y ago
The comment you are responding to is talking about revenue, not costs. Very different.
- whimsicalism 3y ago
  Read before correcting, I am also talking about revenue.
  - deleted 3y ago
    [deleted]

bbatsell 3y ago

Nearly every element of your comment is blatantly wrong, some directly addressed by the post this comment thread is discussing. - Reddit is charging the equivalent of 20x its published revenue per user for the API. - The new API agreements ban the display of any advertising by API users. (Apollo did not show ads, but other third-party clients did, and Reddit claims the low quality of ads was harming Reddit by association.) - Charging $5/month would be break-even given the API pricing, and only for new customers. Apollo would still have to serve earlier subscribers at a huge loss. API fees would certainly not “drop by 50%” — the vast majority of people subscribing to Apollo are power users, so the average API usage per customer would _increase_.

bscphil 3y ago
I say pretty clearly that I'm talking about purely theoretical numbers. The underlying fact is that the status quo is probably unsustainable for Reddit. It's hard to be "blatantly wrong" about a series of hypotheticals, IMO. There's a lot of strange stuff happening in your comment. On the one hand, let's take for granted that Reddit is charging 20x its revenue per average user for the API. But that's just the average user; as you yourself point out "the vast majority of people subscribing to Apollo are power users". Surely they are worth much more to Reddit than the average, extremely casual user? The underlying problem explained in the post is that the author pre-sold access to Reddit through an app to users, while this access was actually conditioned on the continuing availability of access to the Reddit API. No doubt this does put the author in an uncomfortable position! Given that the current plan is to shut down the app anyway, surely cancelling active subscriptions should also be on the table? Subscribers are going to lose access to Reddit through Apollo either way! So realistically, what we're talking about here is whether $5/month is a reasonable price point for power users. My answer is... maybe? I think my instinct is to say that this is all ultimately the place where negotiations are supposed to happen. Reddit needs to go from making zero dollars off the API to making something. Is what they want to charge too high? Probably so. But a lot of people are acting as if any charge at all is untenable.
- whimsicalism 3y ago
  > But a lot of people are acting as if any charge at all is untenable. Is that the case? Every reaction I have seen has been to the magnitude of the price, which is much, much, much more than what Reddit makes off of users

darkarmani 3y ago

Isn't that why Apollo said they'd sell the company for $10M to Reddit if they wanted to take it over? If it costs Reddit $20M/year, surely they could make more than $10M/year if they took it over themselves.