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If Reddit is that unimportant, it should be easy to take those communities and move them elsewhere, but that isn’t happening. The reality is that without Reddit

by ako 3y ago

If Reddit is that unimportant, it should be easy to take those communities and move them elsewhere, but that isn’t happening. The reality is that without Reddit a large part of those communities wouldn’t exist, and they only exist because of Reddit. For the long term survival of Reddit it is essential they become profitable, otherwise they’ll go bankrupt. And seeing that these communities depend on the existence of Reddit it’s also in the interest of these communities that Reddit turns a profit. They seem to have serious revenue, about 500M in 2021 (https://businessmodelanalyst.com/reddit-business-model/ https://businessmodelanalyst.com/reddit-business-model/), you’d think they could make a profit based on that. They had 2000 employees in June 2023 (https://en.wikipedia.org/wiki/Reddit https://en.wikipedia.org/wiki/Reddit), assuming average of 100K cost per employee, that already adds up to 200M. That may seem excessive for running some community website, but they get 400M+ from ads. Just running an organization to handle a 400M+ business for ads will require lots of people, infra, marketing, etc. I can see the reasoning behind the thought that if you’ve created all this to enable these communities, someone doing less than 1% of the work, by simply putting an app on top of your APIs and infra and starting to make a profit seems unfair. What i don’t understand is why they can’t outcompete these apps by providing a better app.

bscphil 3y ago
> What i don’t understand is why they can’t outcompete these apps by providing a better app. The good apps are (a) free, and (b) don't show any ads. Pretty much by definition they can't compete with that and make money.
- ako 3y ago
  If they cant compete because the competition is freeloading on their APIs and community building efforts then it’s clear that they need to compensate the lost revenue by charging for the API usage. It seems Reddit has about 1.5b active monthly users, guess Reddit costs are about $0.3 per year per user. Would be fair to charge that for API usage. If the apps don’t like it, they’re free to create and host the community themselves, shouldn’t be too hard, as Reddit offers little value…
  - foota 3y ago
    The price they want to charge is 100x that, iirc.
    - ako 3y ago
      They state that for a typical user they expect an API cost of about $1 per user per month. Seeing that narwhal has a $6 per user per month plan, expecting 1/6 to go to the largest cost component doesn’t seem unfair.
  - bscphil 3y ago
    I think the argument you want to make is not about Reddit's costs (which are low), but rather that should be charging some fraction of their lost revenue per-user for API use, since API users don't see ads. (Or else require app developers to show Reddit's own ads.) The issue is presumably that Reddit isn't profitable, and free app users are a major source of lost revenue (in addition to being a fairly small cost due to API use).
    - ako 3y ago
      Reddit costs are not low, running the organization costs at least 400M per year. You might state that they’re doing many things that are not core to running a community backend, but you can’t separate the core business from the supporting activities. They would have never reached their current scale if they hadn’t invested in marketing and ads for revenue. And that would reduce the value of the backend.
- maaanu 3y ago
  a and b are basically the same point, since they both can be abstract to the point "make revenue". I used Apollo because it provides a much better user experience and it is not even close to Reddits own App.
mnming 3y ago
I guess it all boils down to whether they are willing to use user generated content for profit without misaligning the interests for users. I guess they can't and they won't unless they become a NGO.
- ako 3y ago
  Even NGOs need money to run their organization, and even though they’re an NGO, it doesn’t mean all their services are provided for free. And I’d say that aiming for long term viability by ensuring they run at least break even is in the interest of their users, so not sure how their current actions are against the interest if their users. And the fact that users put time and effort in creating content on the platform, this doesn’t mean all its services need to be provided for free to these users.
DannyBee 3y ago
"If Reddit is that unimportant, it should be easy to take those communities and move them elsewhere, but that isn’t happening. The reality is that without Reddit a large part of those communities wouldn’t exist, and they only exist because of Reddit." Oh boy. First, this already happened once, that's why Reddit exists. Second, it wasn't happening because it wasn't enough of a problem. Once they generate enough ire it will happen. Will this be enough? Maybe. If not, something else will. It always happens. always When for-profits are involed. You make the same mistake they do - to believe that the success they have is deliberate, and not just mostly dumb luck. Had Digg not failed, nobody would give the slightest shit about reddit. But right up until that point, what you said here could have been said about Digg. In fact, it was said. By lots of people. Yet they moved to Reddit. In the end, these communities don't exist because of reddit. They exist because people have shared interests. The only thing reddit enables is for them to find each other. If reddit disappears, they will find each other again. I've watched the end of similar sites. I had friends on them. We found each other again on other sites.

by ako 3y ago

bscphil 3y ago

> What i don’t understand is why they can’t outcompete these apps by providing a better app. The good apps are (a) free, and (b) don't show any ads. Pretty much by definition they can't compete with that and make money.

ako 3y ago
If they cant compete because the competition is freeloading on their APIs and community building efforts then it’s clear that they need to compensate the lost revenue by charging for the API usage. It seems Reddit has about 1.5b active monthly users, guess Reddit costs are about $0.3 per year per user. Would be fair to charge that for API usage. If the apps don’t like it, they’re free to create and host the community themselves, shouldn’t be too hard, as Reddit offers little value…
- foota 3y ago
  The price they want to charge is 100x that, iirc.
  - ako 3y ago
    They state that for a typical user they expect an API cost of about $1 per user per month. Seeing that narwhal has a $6 per user per month plan, expecting 1/6 to go to the largest cost component doesn’t seem unfair.
- bscphil 3y ago
  I think the argument you want to make is not about Reddit's costs (which are low), but rather that should be charging some fraction of their lost revenue per-user for API use, since API users don't see ads. (Or else require app developers to show Reddit's own ads.) The issue is presumably that Reddit isn't profitable, and free app users are a major source of lost revenue (in addition to being a fairly small cost due to API use).
  - ako 3y ago
    Reddit costs are not low, running the organization costs at least 400M per year. You might state that they’re doing many things that are not core to running a community backend, but you can’t separate the core business from the supporting activities. They would have never reached their current scale if they hadn’t invested in marketing and ads for revenue. And that would reduce the value of the backend.
maaanu 3y ago
a and b are basically the same point, since they both can be abstract to the point "make revenue". I used Apollo because it provides a much better user experience and it is not even close to Reddits own App.

mnming 3y ago

I guess it all boils down to whether they are willing to use user generated content for profit without misaligning the interests for users. I guess they can't and they won't unless they become a NGO.

ako 3y ago
Even NGOs need money to run their organization, and even though they’re an NGO, it doesn’t mean all their services are provided for free. And I’d say that aiming for long term viability by ensuring they run at least break even is in the interest of their users, so not sure how their current actions are against the interest if their users. And the fact that users put time and effort in creating content on the platform, this doesn’t mean all its services need to be provided for free to these users.

DannyBee 3y ago

"If Reddit is that unimportant, it should be easy to take those communities and move them elsewhere, but that isn’t happening. The reality is that without Reddit a large part of those communities wouldn’t exist, and they only exist because of Reddit." Oh boy. First, this already happened once, that's why Reddit exists. Second, it wasn't happening because it wasn't enough of a problem. Once they generate enough ire it will happen. Will this be enough? Maybe. If not, something else will. It always happens. always When for-profits are involed. You make the same mistake they do - to believe that the success they have is deliberate, and not just mostly dumb luck. Had Digg not failed, nobody would give the slightest shit about reddit. But right up until that point, what you said here could have been said about Digg. In fact, it was said. By lots of people. Yet they moved to Reddit. In the end, these communities don't exist because of reddit. They exist because people have shared interests. The only thing reddit enables is for them to find each other. If reddit disappears, they will find each other again. I've watched the end of similar sites. I had friends on them. We found each other again on other sites.