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what puzzles me the most is that reddit's reasoning for charging money for their API is that "it's bad that other people are profiting from our work and it's to

what puzzles me the most is that reddit's reasoning for charging money for their API is that "it's bad that other people are profiting from our work and it's too expensive to maintain without someone paying it". hey, guess what? reddit "profits" a LOT from unpaid work from their moderators. if you wanna charge for API access, you should also pay your moderators since you are profiting from their work.

gorbachev 3y ago
The pre-IPO process often involves all kinds of fun short-term profit maximizing activities.
- jeltz 3y ago
  Yeah, I have personally seen companies inflicting hundreds of millions worth of damages to themselves of not billions as part of pre-IPO work. Extra hilarious and sad to watch when the IPO has to be aborted.
  - bmitc 3y ago
    Why is it so predictable? I know investors don't care about anything other than returns, but what returns do you get when you tank companies in such diametrically opposed ways from how they've operated before?
    - gorbachev 3y ago
      There are different kinds of investors involved in an IPO process. The investors that have pre-IPO stock and who are looking to sell as quickly as possible, gain from IPO pops, so it's in their best interest to maximize short-term profits. That group of investors include a lot of the existing investors, and in almost all cases the founders and C-suite of the company.
- prox 3y ago
  Honest question, does this include artificial inflation of costs? I have seen figures that Reddit used to run with 20 people, and inflated to 2000 in 10 years. Old reddit is also superlight in bandwidth. New reddit is not.
  - jeltz 3y ago
    In at least one real life example I have personal insight into: yes. They hired tons of devs to make the company look bigger and look like they were aiming for continued quick growth post IPO. Reality was that they did not have enough tasks for all people they had quickly hired.
  - dotnet00 3y ago
    Yeah, they're probably somewhat bloated like Twitter was, just like Twitter they don't deliver nearly as many new features to justify the large employee count, they don't do much of their own moderation either. A large portion of those might be for checking reports etc, since reddit at least does seem to do a slightly better job trying to keep humans in the loop there.
    - prox 3y ago
      Yeah some things I read in the Apollo thread was about their global advertising department that grew quite big.
- mordae 3y ago
  Looks like selling company you helped build because you believed in the idea to people who are only interested in profits often leads to worse service and dissatisfied customers. Who would have thunk.
- vsnf 3y ago
  Is it securities fraud if your pre-ipo profit maximization moves cause your user base to relocate, and you didn't disclose that your filings?
  - vesinisa 3y ago
    Yes, they will need to be completely transparent about their outlook at the time of the IPO, and disclosing the current and historical active user counts is a pivotal figure in that data. I wouldn't be surprised if this move actually damages Reddit enough that they can't IPO because the user engagement numbers will take such a sharp negative turn.
  - seanhunter 3y ago
    Highly likely that one of the risk factors they disclose in their prospectus is that the revenues are highly correllated with active user numbers and traffic and if those things change, revenues will be impacted. Even without this latest drama it would be amazing if they didn't have something like that in there.
  - bombcar 3y ago
    Every IPO files paperwork that basically says "The SEC requires us to say we're completely full of shit, everything we do is a lie, and you will lose all your money." And then it's perfectly legal. And they continue to do that, go read any prospectus, it's all about how everything will die and the company is dead.
Xelbair 3y ago
They will double... no, wait, quadruple their salary!
that_guy_iain 3y ago
Reddit isn’t profitable therefore technically it doesn’t profit from anything.
- pmontra 3y ago
  So by their logic they should close their company.
  - that_guy_iain 3y ago
    I assume this "their logic" is some made up "their logic" for a straw man argument. Their logic is they should make other for-profit companies who make money using their APIs pay for using their APIs?
- pbhjpbhj 3y ago
  Do you reckon their C-suite are not waged? (What revenue are they working with?) This is a common issue with discussion of companies, people say "look they're not making any money" just because the company accounts are not recording profits. But if you pay out all your money as C-suite wages (for example) then you have "no profits" as a company but people are certainly profiting. Another angle is political steer; you can make profit outside the company, or make social change, and so forego intrinsic profit.
  - Veen 3y ago
    No doubt they are waged and have a substantial number of shares, which is why they are desperately and rather scummily trying to juice short-term profits pre-IPO. There's a big pay day in the offing, and they don't care who they roll over to line their pockets.
  - that_guy_iain 3y ago
    So you're saying the C-suite aren't profiting from their work? They do no work? C-suite and other employees profit from selling their time to to Reddit. It's kinda weird to start acting like that isn't how employment works.
miroljub 3y ago
> hey, guess what? reddit "profits" a LOT from unpaid work from their moderators. That work is not forced, they all choose to "work" for free and can quit any time they want. And that work may be unpaid in monetary terms, but many of those moderators enjoy their share of internet fame or a sense of power over "commoners" or their feeling they are doing something for a common good, that they are happy to continue working unpaid.
- tazard 3y ago
  I didn't realize Reddit API development was "forced". Whether they enjoy it or not is beside the point. Moderators are providing value to Reddit. If all mods quit, and no one stepped up to take their place, what would happen? Now who deserves to take profit monetarily for that value? As far as Reddit "development" they should have stopped a long time ago, the site is horrible to use and has been for a long time.
thinkingemote 3y ago
Another thing is that many moderators are paid but by other companies and PR firms. Reddit doesn't see any of it. A lot of the content on Reddit is promotion and semi-hidden forms of advertising. Again Reddit doesn't see any of this spend. In both cases Reddit is paying other companies for using their platform for making money. Why would a corporation pay hundreds of thousands for ads when they could spend tens of thousands on some employee time to post, comment or moderate and get better results? I imagine that the commercial entities using Reddit are using third party tools but the changes will hurt normal users more visibly.
- nbadg 3y ago
  I agree that there is a lot of commercial use of reddit that reddit fails to monetize. I have no idea how much of that is moderation, but it doesn't really matter: restricting API usage is the wrong way to solve this problem Instead, the easy fix is to update the standard ToS to be non-commercial use only and introduce paid plans for commercial use. I'm pretty confident that would be way more lucrative than advertising anyways. Optionally, follow up with a badge or something that tags all content from commercial accounts as such, and allow users and mods to report commercial content that doesn't have such a badge.
  - squeaky-clean 3y ago
    This is pretty much what Reddit is doing. All the major 3rd party apps fall under commercial usage. The main issue is the price is insanely high for commercial apps. https://www.theverge.com/2023/6/7/23752804/reddit-exempt-accessibility-apps-api-pricing-changes https://www.theverge.com/2023/6/7/23752804/reddit-exempt-acc...
    - whatevaa 3y ago
      I guess FOSS apps are also commercial, cause 0 income is more than... 0? Maybe reddit uses floats...
    - nulbyte 3y ago
      Those third party apps aren't commercial use of Reddit. I am the user, not the app. That's like saying you can't use Chrome to view some website that prohibits commercial usage. That argument makes no sense.
brabel 3y ago
I'm curious: how does Reddit profits from anything? It seems to me the only revenue they seem to have is ads?? But I use it on the web and never seen ads (except for actual posts that are ads, but those usually get quickly downvoted and I don't even see most of them)... I think people who use Apollo or other apps also like to use Reddit on those because, among other things (like nicer UI) they do not show ads (and probably don't make any money either). Hence, it seems to me, perhaps naively, Reddit is giving us stuff literally for free.. they can't even monetise user data like Facebook, as most of us are anonymous users... So, would be really interesting to understand how they're making money, which could help understand their motivations here.
- shawabawa3 3y ago
  They also have paid awards, no idea how much revenue they generate but it's something
- pynappo 3y ago
  There are definitely sponsored ads that pop up in a feed by default. Downvoting them doesn't change their placement. There's also reddit premium (no ads, customizable avatar, reddit coins) along with a award system where people can give awards that cost reddit coins to exceptional comments. These awards cost reddit coins which can be gained through either getting awards on comments, or subscribing to reddit premium.
radarsat1 3y ago
> it's too expensive to maintain I would love to hear someone elaborate on this part. The API returns the same information as you get from the HTML interface right, but structured? If the API and the website had the same traffic, then wouldn't the HTML part (which is more complex I guess), but more expensive? If the API disappeared, wouldn't the HTML rendering require the same infrastructure? I'm not clear on how maintaining the API adds much overhead, except maybe compatibility inertia because it's a public interface. But infrastructure-wise?
- PurpleRamen 3y ago
  The Website has ads, bringing in significant money.
PurpleRamen 3y ago
That's not the same. The mods work out by their own choice, and usually have no bills to pay for this work. Reddit on the other is a company, and has bills to pay. And Reddit is not tiny. Not sure how big their costs are, and what they earn, but from my understanding, it's not a money-printer wasting bills on golden keyboards and parties, not are really profitable yet. So they are probably on a thin line, still struggling to survive long term without external money.

gorbachev 3y ago

The pre-IPO process often involves all kinds of fun short-term profit maximizing activities.

jeltz 3y ago
Yeah, I have personally seen companies inflicting hundreds of millions worth of damages to themselves of not billions as part of pre-IPO work. Extra hilarious and sad to watch when the IPO has to be aborted.
- bmitc 3y ago
  Why is it so predictable? I know investors don't care about anything other than returns, but what returns do you get when you tank companies in such diametrically opposed ways from how they've operated before?
  - gorbachev 3y ago
    There are different kinds of investors involved in an IPO process. The investors that have pre-IPO stock and who are looking to sell as quickly as possible, gain from IPO pops, so it's in their best interest to maximize short-term profits. That group of investors include a lot of the existing investors, and in almost all cases the founders and C-suite of the company.
prox 3y ago
Honest question, does this include artificial inflation of costs? I have seen figures that Reddit used to run with 20 people, and inflated to 2000 in 10 years. Old reddit is also superlight in bandwidth. New reddit is not.
- jeltz 3y ago
  In at least one real life example I have personal insight into: yes. They hired tons of devs to make the company look bigger and look like they were aiming for continued quick growth post IPO. Reality was that they did not have enough tasks for all people they had quickly hired.
- dotnet00 3y ago
  Yeah, they're probably somewhat bloated like Twitter was, just like Twitter they don't deliver nearly as many new features to justify the large employee count, they don't do much of their own moderation either. A large portion of those might be for checking reports etc, since reddit at least does seem to do a slightly better job trying to keep humans in the loop there.
  - prox 3y ago
    Yeah some things I read in the Apollo thread was about their global advertising department that grew quite big.
mordae 3y ago
Looks like selling company you helped build because you believed in the idea to people who are only interested in profits often leads to worse service and dissatisfied customers. Who would have thunk.
vsnf 3y ago
Is it securities fraud if your pre-ipo profit maximization moves cause your user base to relocate, and you didn't disclose that your filings?
- vesinisa 3y ago
  Yes, they will need to be completely transparent about their outlook at the time of the IPO, and disclosing the current and historical active user counts is a pivotal figure in that data. I wouldn't be surprised if this move actually damages Reddit enough that they can't IPO because the user engagement numbers will take such a sharp negative turn.
- seanhunter 3y ago
  Highly likely that one of the risk factors they disclose in their prospectus is that the revenues are highly correllated with active user numbers and traffic and if those things change, revenues will be impacted. Even without this latest drama it would be amazing if they didn't have something like that in there.
- bombcar 3y ago
  Every IPO files paperwork that basically says "The SEC requires us to say we're completely full of shit, everything we do is a lie, and you will lose all your money." And then it's perfectly legal. And they continue to do that, go read any prospectus, it's all about how everything will die and the company is dead.

Xelbair 3y ago

They will double... no, wait, quadruple their salary!

that_guy_iain 3y ago

Reddit isn’t profitable therefore technically it doesn’t profit from anything.

pmontra 3y ago
So by their logic they should close their company.
- that_guy_iain 3y ago
  I assume this "their logic" is some made up "their logic" for a straw man argument. Their logic is they should make other for-profit companies who make money using their APIs pay for using their APIs?
pbhjpbhj 3y ago
Do you reckon their C-suite are not waged? (What revenue are they working with?) This is a common issue with discussion of companies, people say "look they're not making any money" just because the company accounts are not recording profits. But if you pay out all your money as C-suite wages (for example) then you have "no profits" as a company but people are certainly profiting. Another angle is political steer; you can make profit outside the company, or make social change, and so forego intrinsic profit.
- Veen 3y ago
  No doubt they are waged and have a substantial number of shares, which is why they are desperately and rather scummily trying to juice short-term profits pre-IPO. There's a big pay day in the offing, and they don't care who they roll over to line their pockets.
- that_guy_iain 3y ago
  So you're saying the C-suite aren't profiting from their work? They do no work? C-suite and other employees profit from selling their time to to Reddit. It's kinda weird to start acting like that isn't how employment works.

miroljub 3y ago

> hey, guess what? reddit "profits" a LOT from unpaid work from their moderators. That work is not forced, they all choose to "work" for free and can quit any time they want. And that work may be unpaid in monetary terms, but many of those moderators enjoy their share of internet fame or a sense of power over "commoners" or their feeling they are doing something for a common good, that they are happy to continue working unpaid.

tazard 3y ago
I didn't realize Reddit API development was "forced". Whether they enjoy it or not is beside the point. Moderators are providing value to Reddit. If all mods quit, and no one stepped up to take their place, what would happen? Now who deserves to take profit monetarily for that value? As far as Reddit "development" they should have stopped a long time ago, the site is horrible to use and has been for a long time.

thinkingemote 3y ago

Another thing is that many moderators are paid but by other companies and PR firms. Reddit doesn't see any of it. A lot of the content on Reddit is promotion and semi-hidden forms of advertising. Again Reddit doesn't see any of this spend. In both cases Reddit is paying other companies for using their platform for making money. Why would a corporation pay hundreds of thousands for ads when they could spend tens of thousands on some employee time to post, comment or moderate and get better results? I imagine that the commercial entities using Reddit are using third party tools but the changes will hurt normal users more visibly.

nbadg 3y ago
I agree that there is a lot of commercial use of reddit that reddit fails to monetize. I have no idea how much of that is moderation, but it doesn't really matter: restricting API usage is the wrong way to solve this problem Instead, the easy fix is to update the standard ToS to be non-commercial use only and introduce paid plans for commercial use. I'm pretty confident that would be way more lucrative than advertising anyways. Optionally, follow up with a badge or something that tags all content from commercial accounts as such, and allow users and mods to report commercial content that doesn't have such a badge.
- squeaky-clean 3y ago
  This is pretty much what Reddit is doing. All the major 3rd party apps fall under commercial usage. The main issue is the price is insanely high for commercial apps. https://www.theverge.com/2023/6/7/23752804/reddit-exempt-accessibility-apps-api-pricing-changes https://www.theverge.com/2023/6/7/23752804/reddit-exempt-acc...
  - whatevaa 3y ago
    I guess FOSS apps are also commercial, cause 0 income is more than... 0? Maybe reddit uses floats...
  - nulbyte 3y ago
    Those third party apps aren't commercial use of Reddit. I am the user, not the app. That's like saying you can't use Chrome to view some website that prohibits commercial usage. That argument makes no sense.

brabel 3y ago

I'm curious: how does Reddit profits from anything? It seems to me the only revenue they seem to have is ads?? But I use it on the web and never seen ads (except for actual posts that are ads, but those usually get quickly downvoted and I don't even see most of them)... I think people who use Apollo or other apps also like to use Reddit on those because, among other things (like nicer UI) they do not show ads (and probably don't make any money either). Hence, it seems to me, perhaps naively, Reddit is giving us stuff literally for free.. they can't even monetise user data like Facebook, as most of us are anonymous users... So, would be really interesting to understand how they're making money, which could help understand their motivations here.

shawabawa3 3y ago
They also have paid awards, no idea how much revenue they generate but it's something
pynappo 3y ago
There are definitely sponsored ads that pop up in a feed by default. Downvoting them doesn't change their placement. There's also reddit premium (no ads, customizable avatar, reddit coins) along with a award system where people can give awards that cost reddit coins to exceptional comments. These awards cost reddit coins which can be gained through either getting awards on comments, or subscribing to reddit premium.

radarsat1 3y ago

> it's too expensive to maintain I would love to hear someone elaborate on this part. The API returns the same information as you get from the HTML interface right, but structured? If the API and the website had the same traffic, then wouldn't the HTML part (which is more complex I guess), but more expensive? If the API disappeared, wouldn't the HTML rendering require the same infrastructure? I'm not clear on how maintaining the API adds much overhead, except maybe compatibility inertia because it's a public interface. But infrastructure-wise?

PurpleRamen 3y ago
The Website has ads, bringing in significant money.

PurpleRamen 3y ago

That's not the same. The mods work out by their own choice, and usually have no bills to pay for this work. Reddit on the other is a company, and has bills to pay. And Reddit is not tiny. Not sure how big their costs are, and what they earn, but from my understanding, it's not a money-printer wasting bills on golden keyboards and parties, not are really profitable yet. So they are probably on a thin line, still struggling to survive long term without external money.