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It's certainly a strange call. Hey, you want to charge me $20 million per year, so why don't we make it easy and you just pay me $10 million to go quiet? It's

It's certainly a strange call. Hey, you want to charge me $20 million per year, so why don't we make it easy and you just pay me $10 million to go quiet? It's really confusing. He wants Reddit to pay $10 million so he isn't "loud" with API usage? He wants them to buy and takeover the app? He's wants a payment to shutdown? Is he even serious about any of this? I get the impression he lacks the confidence to ask for a $10 million acquisition, so instead he approaches the subject casually as a joke, and the entire conversation spirals into confusion due to the lack of clarity. Either way, that's not a great deal for Reddit. They might as well charge the $20 million, and if he can't find a way to pay it then Apollo shuts down and the majority of users return to the official Reddit site/app for free. There's no benefit to paying $10 million. The call was a failure between the two parties and likely destroyed any future negotiations. I think the best suggestion was from another user here. Only allow Reddit official subscribers to use third party apps. Reddit can charge users whatever they want, and app developers can monetize their apps however they choose.

rightbyte 3y ago
If Reddit thinks Apollo can pay them 20 million a year, 10 million is certainly a nice deal for the app? I guess that is what he meant.
- Guest9081239812 3y ago
  It's not a deal though. Reddit says the users are worth $20 million in lost advertising. So either Apollo pays the money, the users move to another app that pays, or the users return to the official site and app. Either way, Reddit gets their $20 million. Apollo has no leverage here unless there is strong evidence most of the Apollo users will leave Reddit if the app shuts down. I don't believe they will. The other potential leverage is the upcoming subreddit blackouts, or hinting at taking the Apollo users to start a competitor. The developer said they are not going to build a competitor (that was a mistake, they shouldn't have revealed that card), so I think the blackouts are the only chance of lowering API costs.
  - jojobas 3y ago
    There's no way the bit about $20million in lost advertising is true. Going by user counts and reddit's total ad revenue you get about $1 million.
    - Aeolun 3y ago
      Also, people use Apollo so they don’t have to deal with the ads and terrible ux. They’re not suddenly going to go to the terrible official website or app.
      - jojobas 3y ago
        Or if they are, they'll use an adblocker and be of 0 revenue.
  - rdedev 3y ago
    There are a lot of users who have decided to delete their account once 3rd party apps are gone. Some may come back but they won't be getting that 20 mil
  - az226 3y ago
    The point here is, if Reddit thinks the user base is worth $20M per year, paying $10M to take over the app and implement ads on it, would be a steal. They’d return the money in 6 months. Usual payback periods are like 4-8 years. Clearly the $20M is BS because otherwise they’d done the deal on the spot.
    - markmark 3y ago
      They would only do the deal on the spot if that was their only option. But they have the option of spending $0 and having the majority of the users moving to the official app.
      - Domenic_S 3y ago
        This is an example of the same thing being worth different amounts to different parties, and the equivocation leads to comments like this thread. If Apollo's userbase was actually generating $20mm/yr, acquiring Apollo for $10mm is a no-brainer. But if that were the case, keeping Apollo running as it is would also work. Obviously this is not the case. Apollo is confusing costing $20mm with generating $20mm.
orange_fritter 3y ago
Reddit should have ended the call politely and told the Apollo guy to reach out with some sort of negotiator/liaison/agent/manager on the line.
Aeolun 3y ago
> if he can't find a way to pay it then Apollo shuts down and the majority of users return to the official Reddit site/app for free I think you underestimate the fallout here.
- satvikpendem 3y ago
  Rather, the vocal minority overestimates it. The vast majority of social media users don't give a shit, they'll continue using the platform.
  - pama 3y ago
    I quit Reddit today in part because of this event and I had never used Apollo. I started reading it more regularly 5 years ago because a friend had ranked in their top twenty and got me curious about what he spent his time on. I loved observing a couple of communities passively, but it’s just not worth the risk anymore. They might eventually also remove old.reddit.com so I don’t see why I should bother with content that might one day disappear completely.
    - HamlindigoBlue 3y ago
      I’m also looking to migrate off reddit because of this. I have a couple sites for my hobbies I’ve already started to visit, but the big loss for me is the ability to find reliable information on niche topics — ie, what rain pants to buy for fishing, where in a city to get the best perogies, looking at how user opinions change over time on political topics etc. Also great are any of the discussions on movies or TV shows. I really see no alternative but reddit for these things. Does anyone have recommendations? Or do I still need to go to reddit for this.
    - SkyPuncher 3y ago
      I deleted my 8 year old account yesterday. I modded a few subs. I don’t know if I’ll quit Reddit entirely, but I’m certainly done engaging at the level that I use to. I no longer trust how Reddit will decide to use my data or how they’ll pull the rug from me. They’re pre-IPO and already getting desperate. Shits going to hit the fan when they IPO and investors expect constant growth.
az226 3y ago
My understanding is that Reddit is saying that by not charging for the API they are losing $20M per year. So he said, well you can buy me out, and instead of doing a multiple of that $20M to be like $100M, he’s only asking for half of only one year’s worth of what they would lose. Clearly they don’t want to do that deal because the $20M figure is complete bogus.
- toymin 3y ago
  but there’s no incentive for Reddit to pay any money, they either start charging for the API and recoup the costs or the app shuts down and it starts costing Reddit absolutely nothing
  - xelhark 3y ago
    The cost for reddit as stated in another part of the call is an opportunity cost. By acquiring Apollo instead of shutting it down they would seamlessly acquire a lot of users who would have a hard time adjusting to the native app and potentially leave the platform, so this call is still a cost to them.
  - ilikecode 3y ago
    The app shutting down does not automatically cost nothing. If all users move to the official app the server resources still are used but the users would at least see ads.
newZWhoDis 3y ago
So what he said rather poorly was: 1) ok so, according to you I’m costing you $20M/year in API load 2) How about you pay me $10M which is 6 months of your cost, and I turn off the $20M/year burden immediately. 3) you make your money back in 6 months and within a year are up $10M The problem is Apollo does not cost Reddit $20M/year lol
soraminazuki 3y ago
It's not strange at all. At least the Reddit CEO heard and understood perfectly well what the Apollo dev said in that call and there's a recording to prove that. Your first sentence misrepresents what the Apollo dev said. Actually, it's the exact same misrepresentation that the Reddit CEO knowingly made in public. First off, it's abundantly clear that the Apollo dev wasn't actually demanding money. It was a pointed statement that revealed the CEO wasn't being honest about the costs. The CEO, in contradiction with publicly available data, claimed that Apollo was costing Reddit $20 million per year in lost opportunity. So the dev jokingly offered to sell Apollo for half that price. Then Reddit would be able to recoup the cost in half a year and gain an additional $20 million yearly. What a great deal, right? Except they both knew that the $20 million price tag was complete bogus.
- evolve2k 3y ago
  Yeah totally agree. Further I wouldn’t be trusting a hot take from ~100 points GuestXXXXXX at this point of the PR dumpster fire cycle.
  - neuronic 3y ago
    Given the mishaps of the past such as stealth editing comments of other users, I would not at all be surprised if these comments were made by alt accounts of u/spez.
- Guest9081239812 3y ago
  > First off, it's abundantly clear that the Apollo dev wasn't actually demanding money. It was a pointed statement that revealed the CEO wasn't being honest about the costs. I disagree, I think the Apollo dev would have happily taken the $10 million. > Then Reddit would be able to recoup the cost in half a year and gain an additional $20 million yearly. What a great deal, right? Except they both knew that the $20 million price tag was complete bogus. The $20 million price is irrelevant here. Reddit doesn't need to pay to acquire these users. They are Reddit users (they're registered there, and Reddit knows everything about them). They can close down Apollo and they'll get almost all the users back for free. If Apollo had a standalone community, then it's easy to calculate the value of a user, and a fair price for acquisition. But, that's not the case here. Don't take this the wrong way, I'm not siding with Reddit and I think both sides are losing here due to their poor management.
MattRix 3y ago
“ Is he even serious about any of this?” Not sure how people are misunderstanding him, he literally said he was joking… He knows it’s not a great deal for Reddit. His whole point is that the app isn’t actually worth $20 million a year, which is what they want him to pay. It’s not even worth $10 million. Not to him or Reddit or anyone else.
- Guest9081239812 3y ago
  > His whole point is that the app isn’t actually worth $20 million a year, which is what they want him to pay. It’s not even worth $10 million. Not to him or Reddit or anyone else. Right now there seems to be two options on the table. 1. The Apollo dev pays $20 million per year for API access. 2. Apollo shuts down and the users return to the official Reddit website/app for advertising. If Reddit is refusing to lower their API pricing, doesn't this mean the users are worth $20 million? If the users were worth $1 million, then why wouldn't Reddit charge $2 million for the API and double their income on those users? That being said, something else must be at play here. The users are not worth $20 million and Reddit refuses to take anything less than $20 million. If I had to guess, they want to boost metrics before going public and are willing to take a hit to their reputation to do so.
  - beowulfey 3y ago
    I’m just one Apollo user, but I don’t plan to install the official app. It’s terrible and riddled with ads. It’s the same reason I don’t use instagram—seeing an ad every two images bugs the crap out of me. The difference with Reddit is there was a nice third party option.
austhrow743 3y ago
>There's no benefit to paying $10 million. Him not rabble rousing their user base against them would have been the benefit.

rightbyte 3y ago

If Reddit thinks Apollo can pay them 20 million a year, 10 million is certainly a nice deal for the app? I guess that is what he meant.

Guest9081239812 3y ago
It's not a deal though. Reddit says the users are worth $20 million in lost advertising. So either Apollo pays the money, the users move to another app that pays, or the users return to the official site and app. Either way, Reddit gets their $20 million. Apollo has no leverage here unless there is strong evidence most of the Apollo users will leave Reddit if the app shuts down. I don't believe they will. The other potential leverage is the upcoming subreddit blackouts, or hinting at taking the Apollo users to start a competitor. The developer said they are not going to build a competitor (that was a mistake, they shouldn't have revealed that card), so I think the blackouts are the only chance of lowering API costs.
- jojobas 3y ago
  There's no way the bit about $20million in lost advertising is true. Going by user counts and reddit's total ad revenue you get about $1 million.
  - Aeolun 3y ago
    Also, people use Apollo so they don’t have to deal with the ads and terrible ux. They’re not suddenly going to go to the terrible official website or app.
    - jojobas 3y ago
      Or if they are, they'll use an adblocker and be of 0 revenue.
- rdedev 3y ago
  There are a lot of users who have decided to delete their account once 3rd party apps are gone. Some may come back but they won't be getting that 20 mil
- az226 3y ago
  The point here is, if Reddit thinks the user base is worth $20M per year, paying $10M to take over the app and implement ads on it, would be a steal. They’d return the money in 6 months. Usual payback periods are like 4-8 years. Clearly the $20M is BS because otherwise they’d done the deal on the spot.
  - markmark 3y ago
    They would only do the deal on the spot if that was their only option. But they have the option of spending $0 and having the majority of the users moving to the official app.
    - Domenic_S 3y ago
      This is an example of the same thing being worth different amounts to different parties, and the equivocation leads to comments like this thread. If Apollo's userbase was actually generating $20mm/yr, acquiring Apollo for $10mm is a no-brainer. But if that were the case, keeping Apollo running as it is would also work. Obviously this is not the case. Apollo is confusing costing $20mm with generating $20mm.

orange_fritter 3y ago

Reddit should have ended the call politely and told the Apollo guy to reach out with some sort of negotiator/liaison/agent/manager on the line.

Aeolun 3y ago

> if he can't find a way to pay it then Apollo shuts down and the majority of users return to the official Reddit site/app for free I think you underestimate the fallout here.

satvikpendem 3y ago
Rather, the vocal minority overestimates it. The vast majority of social media users don't give a shit, they'll continue using the platform.
- pama 3y ago
  I quit Reddit today in part because of this event and I had never used Apollo. I started reading it more regularly 5 years ago because a friend had ranked in their top twenty and got me curious about what he spent his time on. I loved observing a couple of communities passively, but it’s just not worth the risk anymore. They might eventually also remove old.reddit.com so I don’t see why I should bother with content that might one day disappear completely.
  - HamlindigoBlue 3y ago
    I’m also looking to migrate off reddit because of this. I have a couple sites for my hobbies I’ve already started to visit, but the big loss for me is the ability to find reliable information on niche topics — ie, what rain pants to buy for fishing, where in a city to get the best perogies, looking at how user opinions change over time on political topics etc. Also great are any of the discussions on movies or TV shows. I really see no alternative but reddit for these things. Does anyone have recommendations? Or do I still need to go to reddit for this.
  - SkyPuncher 3y ago
    I deleted my 8 year old account yesterday. I modded a few subs. I don’t know if I’ll quit Reddit entirely, but I’m certainly done engaging at the level that I use to. I no longer trust how Reddit will decide to use my data or how they’ll pull the rug from me. They’re pre-IPO and already getting desperate. Shits going to hit the fan when they IPO and investors expect constant growth.

az226 3y ago

My understanding is that Reddit is saying that by not charging for the API they are losing $20M per year. So he said, well you can buy me out, and instead of doing a multiple of that $20M to be like $100M, he’s only asking for half of only one year’s worth of what they would lose. Clearly they don’t want to do that deal because the $20M figure is complete bogus.

toymin 3y ago
but there’s no incentive for Reddit to pay any money, they either start charging for the API and recoup the costs or the app shuts down and it starts costing Reddit absolutely nothing
- xelhark 3y ago
  The cost for reddit as stated in another part of the call is an opportunity cost. By acquiring Apollo instead of shutting it down they would seamlessly acquire a lot of users who would have a hard time adjusting to the native app and potentially leave the platform, so this call is still a cost to them.
- ilikecode 3y ago
  The app shutting down does not automatically cost nothing. If all users move to the official app the server resources still are used but the users would at least see ads.

newZWhoDis 3y ago

So what he said rather poorly was: 1) ok so, according to you I’m costing you $20M/year in API load 2) How about you pay me $10M which is 6 months of your cost, and I turn off the $20M/year burden immediately. 3) you make your money back in 6 months and within a year are up $10M The problem is Apollo does not cost Reddit $20M/year lol

soraminazuki 3y ago

It's not strange at all. At least the Reddit CEO heard and understood perfectly well what the Apollo dev said in that call and there's a recording to prove that. Your first sentence misrepresents what the Apollo dev said. Actually, it's the exact same misrepresentation that the Reddit CEO knowingly made in public. First off, it's abundantly clear that the Apollo dev wasn't actually demanding money. It was a pointed statement that revealed the CEO wasn't being honest about the costs. The CEO, in contradiction with publicly available data, claimed that Apollo was costing Reddit $20 million per year in lost opportunity. So the dev jokingly offered to sell Apollo for half that price. Then Reddit would be able to recoup the cost in half a year and gain an additional $20 million yearly. What a great deal, right? Except they both knew that the $20 million price tag was complete bogus.

evolve2k 3y ago
Yeah totally agree. Further I wouldn’t be trusting a hot take from ~100 points GuestXXXXXX at this point of the PR dumpster fire cycle.
- neuronic 3y ago
  Given the mishaps of the past such as stealth editing comments of other users, I would not at all be surprised if these comments were made by alt accounts of u/spez.
Guest9081239812 3y ago
> First off, it's abundantly clear that the Apollo dev wasn't actually demanding money. It was a pointed statement that revealed the CEO wasn't being honest about the costs. I disagree, I think the Apollo dev would have happily taken the $10 million. > Then Reddit would be able to recoup the cost in half a year and gain an additional $20 million yearly. What a great deal, right? Except they both knew that the $20 million price tag was complete bogus. The $20 million price is irrelevant here. Reddit doesn't need to pay to acquire these users. They are Reddit users (they're registered there, and Reddit knows everything about them). They can close down Apollo and they'll get almost all the users back for free. If Apollo had a standalone community, then it's easy to calculate the value of a user, and a fair price for acquisition. But, that's not the case here. Don't take this the wrong way, I'm not siding with Reddit and I think both sides are losing here due to their poor management.

MattRix 3y ago

“ Is he even serious about any of this?” Not sure how people are misunderstanding him, he literally said he was joking… He knows it’s not a great deal for Reddit. His whole point is that the app isn’t actually worth $20 million a year, which is what they want him to pay. It’s not even worth $10 million. Not to him or Reddit or anyone else.

Guest9081239812 3y ago
> His whole point is that the app isn’t actually worth $20 million a year, which is what they want him to pay. It’s not even worth $10 million. Not to him or Reddit or anyone else. Right now there seems to be two options on the table. 1. The Apollo dev pays $20 million per year for API access. 2. Apollo shuts down and the users return to the official Reddit website/app for advertising. If Reddit is refusing to lower their API pricing, doesn't this mean the users are worth $20 million? If the users were worth $1 million, then why wouldn't Reddit charge $2 million for the API and double their income on those users? That being said, something else must be at play here. The users are not worth $20 million and Reddit refuses to take anything less than $20 million. If I had to guess, they want to boost metrics before going public and are willing to take a hit to their reputation to do so.
- beowulfey 3y ago
  I’m just one Apollo user, but I don’t plan to install the official app. It’s terrible and riddled with ads. It’s the same reason I don’t use instagram—seeing an ad every two images bugs the crap out of me. The difference with Reddit is there was a nice third party option.

austhrow743 3y ago

>There's no benefit to paying $10 million. Him not rabble rousing their user base against them would have been the benefit.