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> How is this different than any other business running (part of) their operations at a large cloud provider? You pay for your cloud provider...

by Alupis 3y ago

Dylan16807 3y ago
If they were already paying, do you think that would have prevented a huge price hike with similar effect?
- Alupis 3y ago
  Probably, for two reasons. First being Reddit wouldn't have suddenly needed to stop supporting 3rd party apps for free - apps that only cost Reddit money and generate no income. If the API made Reddit money, instead of costing them money, there would be no need for a sudden change. The "suddenness" of this change is due, in no small part, to the cost of supporting basically free-loading 3rd party apps that consume resources but offer nothing in exchange. Secondly, Apollo would have formed a business model that supported paying for API access, be it monthly subscriptions, freemium, etc. The current model of pay-once-use-forever is simply unsustainable (on an obvious level) - and the $12.99 annual subscription equally so. The Apollo model, as it was, required free API access. Even if Apollo had been paying for API access all along, and Reddit decided to suddenly hike the prices - Apollo would have been in a better position to raise their own prices accordingly, and would have had a userbase more accepting of paying. Paying for API access also compels the business to be more efficient in their calls. As it was, there was little-to-no incentive to operate large content caching on your own servers/services, etc. I have seen, but do not know their credibility, that Apollo was not very efficient in it's API calls and essentially hammered the API far more than was necessary. If you're not paying for it, why would you bother designing a more efficient system? The API fees were inevitable. More are coming - be sure of that, as corporations tighten their figurative belts and look for ways to stop bleeding money.
  - Dylan16807 3y ago
    The 12.99/yr model could have been perfectly sustainable. Why not? And the "hammering" is addressed and strongly countered in the article.
    - Alupis 3y ago
      The new thread, with the backend dump indicates it polled reddit every 6 seconds per user for new messages. Maybe it's necessary, but that seems awfully tight timing. I have not reviewed any of the rest. My understanding is they tried to emulate push notifications... $12.99 per year was priced with majority of the compute burden foisted upon Reddit. Apollo had servers too, but apparently took a lot of steps to minimize what they did in order to keep subscription prices super low. $12.99 doesn't pay for an the free users that might not be hammering the API quite on the same level as the paid users, but hammered it non the less.
      - Dylan16807 3y ago
        Every six seconds when active, but only 345 requests per user per day total? If the polling was the bulk of the traffic they could just remove that feature. And there's no way the compute burden is an entire dollar to do 4000 requests.
        Alupis 3y ago
        Fair points. Specifically, the $12.99/year model is floating a ton of free users, in addition to paying for server resource usage. None of that $12.99 currently was allocated to paying Reddit, and we know Apollo calculated an approximate cost of $2.50 per user per month with the new API fees. This $2.50 fee seems to align costs with what we can reasonably expect Reddit to earn per user on their platform. Reddit prices Premium membership at $5.99 monthly, which among other benefits removes all ads. $5.99 likely indicates a $2-3 profit when all ads are removed but user engagement remains constant. The typical mildly engaged Reddit users probably easily spends an hour a day looking at ads via the app - so while the math may be fuzzy, it seems like Reddit possibly based their API pricing off something like this. At a minimum, that is $2.50 x 12 = $30 of cost annually per user. This means all users need to pay Apollo $30 a year to break even on just Reddit fees, or some subset of users needs to pay a lot more than $30 a year to float a bunch of free users. Apollo has other expenses too (labor, servers, etc.). Even if the API fees were reduced 80% down to $0.50 per user per month, that's still $6 annually per user - and Apollo has a lot of free users. All of this is to say, the $12.99/year membership for Apollo was never going to work with any API fees.

> How is this different than any other business running (part of) their operations at a large cloud provider? You pay for your cloud provider...

by Alupis 3y ago

> How is this different than any other business running (part of) their operations at a large cloud provider? You pay for your cloud provider...

Dylan16807 3y ago

If they were already paying, do you think that would have prevented a huge price hike with similar effect?

Alupis 3y ago
Probably, for two reasons. First being Reddit wouldn't have suddenly needed to stop supporting 3rd party apps for free - apps that only cost Reddit money and generate no income. If the API made Reddit money, instead of costing them money, there would be no need for a sudden change. The "suddenness" of this change is due, in no small part, to the cost of supporting basically free-loading 3rd party apps that consume resources but offer nothing in exchange. Secondly, Apollo would have formed a business model that supported paying for API access, be it monthly subscriptions, freemium, etc. The current model of pay-once-use-forever is simply unsustainable (on an obvious level) - and the $12.99 annual subscription equally so. The Apollo model, as it was, required free API access. Even if Apollo had been paying for API access all along, and Reddit decided to suddenly hike the prices - Apollo would have been in a better position to raise their own prices accordingly, and would have had a userbase more accepting of paying. Paying for API access also compels the business to be more efficient in their calls. As it was, there was little-to-no incentive to operate large content caching on your own servers/services, etc. I have seen, but do not know their credibility, that Apollo was not very efficient in it's API calls and essentially hammered the API far more than was necessary. If you're not paying for it, why would you bother designing a more efficient system? The API fees were inevitable. More are coming - be sure of that, as corporations tighten their figurative belts and look for ways to stop bleeding money.
- Dylan16807 3y ago
  The 12.99/yr model could have been perfectly sustainable. Why not? And the "hammering" is addressed and strongly countered in the article.
  - Alupis 3y ago
    The new thread, with the backend dump indicates it polled reddit every 6 seconds per user for new messages. Maybe it's necessary, but that seems awfully tight timing. I have not reviewed any of the rest. My understanding is they tried to emulate push notifications... $12.99 per year was priced with majority of the compute burden foisted upon Reddit. Apollo had servers too, but apparently took a lot of steps to minimize what they did in order to keep subscription prices super low. $12.99 doesn't pay for an the free users that might not be hammering the API quite on the same level as the paid users, but hammered it non the less.
    - Dylan16807 3y ago
      Every six seconds when active, but only 345 requests per user per day total? If the polling was the bulk of the traffic they could just remove that feature. And there's no way the compute burden is an entire dollar to do 4000 requests.
      - Alupis 3y ago
        Fair points. Specifically, the $12.99/year model is floating a ton of free users, in addition to paying for server resource usage. None of that $12.99 currently was allocated to paying Reddit, and we know Apollo calculated an approximate cost of $2.50 per user per month with the new API fees. This $2.50 fee seems to align costs with what we can reasonably expect Reddit to earn per user on their platform. Reddit prices Premium membership at $5.99 monthly, which among other benefits removes all ads. $5.99 likely indicates a $2-3 profit when all ads are removed but user engagement remains constant. The typical mildly engaged Reddit users probably easily spends an hour a day looking at ads via the app - so while the math may be fuzzy, it seems like Reddit possibly based their API pricing off something like this. At a minimum, that is $2.50 x 12 = $30 of cost annually per user. This means all users need to pay Apollo $30 a year to break even on just Reddit fees, or some subset of users needs to pay a lot more than $30 a year to float a bunch of free users. Apollo has other expenses too (labor, servers, etc.). Even if the API fees were reduced 80% down to $0.50 per user per month, that's still $6 annually per user - and Apollo has a lot of free users. All of this is to say, the $12.99/year membership for Apollo was never going to work with any API fees.