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Why is Reddit not already profitable? They don't pay their moderators, they don't pay for their content, it's mostly text- and image based, very little video, t

Why is Reddit not already profitable? They don't pay their moderators, they don't pay for their content, it's mostly text- and image based, very little video, they have a userbase which buys meaningless awards for real money, they should have "native advertising" deals to no end, and very high CPR for their ads since the userbase tells them about their interests. Sounds to me like they're just bad at running a business.

dumpsterdiver 3y ago
I don't know. I can only guess that it's because it was created by two college students with the intent of allowing people to share interesting content with each other (a pet project), and then became more popular than they could ever have imagined. Server costs went up in order to keep the site alive, and investors saw the potential and subsidized those costs, and everything ticked along swimmingly until the investors became impatient. Again, this is just speculation.
ghosty141 3y ago
You are wrong in that they DO host videos and images and quite a lot at that. Originally they only allowed text posts but that changed a while ago and now a lot content is hosted on reddit itself. I personally think that was a huge mistake. If where is one thing you have to know on the internet is that you should stay away from being a hosting site, it almost never works out.
- blitzar 3y ago
  Imgur was profitably hosting images until reddit brought image hosting in house.
- beowulfey 3y ago
  It’s kind of silly, to be honest. They basically had free video and image hosting, and Reddit decided to say screw that, lets increase our server fees dramatically. I still don’t really understand what motivated that decision. Did they really gain so much by self-hosting content?
  - bombcar 3y ago
    I believe they are trying to protect themselves from imgur or YouTube deciding they don’t like being an unpaid data store. It’s stupid and premature in my opinion; they should have bought Imgur instead. And the Reddit video player:host was notoriously crappy.
    - dumpsterdiver 3y ago
      > they should have bought Imgur instead In that case, wouldn't they still be paying for the hosting?
  - wasmitnetzen 3y ago
    I do understand that business decision though. You don't want your business model to depend on a dominant supplier who then can extort high API fees from you... does that sound familiar, somehow?
    - beowulfey 3y ago
      Ha, that’s a great point! Imgur also became a community of its own. I don’t remember when it happened, but perhaps Reddit thought they were becoming a true competitor and opted to pull away.
    - spaceman_2020 3y ago
      But if the supplier depends entirely on content created by your userbase for its survival, how much leverage does it really even have?
    - bentcorner 3y ago
      But those suppliers would be extorting fees from users, not reddit. You could say the same thing about any paywalled content. Reddit doesn't scrape and host web content, why do they feel the need to do so for images/video? I think there is a point to be made about a smoother user experience, but youtube is a great example where their embeds can still be monetized. Reddit not pushing ads through the API is like if youtube didn't give you ads on embedded videos.
- wasmitnetzen 3y ago
  YouTube and Twitch even pay the creators, and are apparently (at least sort-of) profitable, and they don't even get a share of the brand deals that are baked into the video. Sure, they are backed by huge cloud operators, but still. The hosting costs for Reddit should not be that high.
- bick_nyers 3y ago
  I wonder if they perform image/video deduplication at scale (or if it is even possible). So many images are just reposts or slight variations on the same thing.
8ig0unce 3y ago
Couldn't agree more. A web site who's content is freely provided, moderated for free and pretty much just linked to other content and they still can't make money without charging extortionate amounts of money. So many suitable options were voiced for the 3pa such as profit shares or just reasonable priced API fees. It baffles me that Reddit didn't already turn a profit. So over bloated and the shit they have actually paid people for such as the official app and desktop site, is just sub standard

dumpsterdiver 3y ago

I don't know. I can only guess that it's because it was created by two college students with the intent of allowing people to share interesting content with each other (a pet project), and then became more popular than they could ever have imagined. Server costs went up in order to keep the site alive, and investors saw the potential and subsidized those costs, and everything ticked along swimmingly until the investors became impatient. Again, this is just speculation.

ghosty141 3y ago

You are wrong in that they DO host videos and images and quite a lot at that. Originally they only allowed text posts but that changed a while ago and now a lot content is hosted on reddit itself. I personally think that was a huge mistake. If where is one thing you have to know on the internet is that you should stay away from being a hosting site, it almost never works out.

blitzar 3y ago
Imgur was profitably hosting images until reddit brought image hosting in house.
beowulfey 3y ago
It’s kind of silly, to be honest. They basically had free video and image hosting, and Reddit decided to say screw that, lets increase our server fees dramatically. I still don’t really understand what motivated that decision. Did they really gain so much by self-hosting content?
- bombcar 3y ago
  I believe they are trying to protect themselves from imgur or YouTube deciding they don’t like being an unpaid data store. It’s stupid and premature in my opinion; they should have bought Imgur instead. And the Reddit video player:host was notoriously crappy.
  - dumpsterdiver 3y ago
    > they should have bought Imgur instead In that case, wouldn't they still be paying for the hosting?
- wasmitnetzen 3y ago
  I do understand that business decision though. You don't want your business model to depend on a dominant supplier who then can extort high API fees from you... does that sound familiar, somehow?
  - beowulfey 3y ago
    Ha, that’s a great point! Imgur also became a community of its own. I don’t remember when it happened, but perhaps Reddit thought they were becoming a true competitor and opted to pull away.
  - spaceman_2020 3y ago
    But if the supplier depends entirely on content created by your userbase for its survival, how much leverage does it really even have?
  - bentcorner 3y ago
    But those suppliers would be extorting fees from users, not reddit. You could say the same thing about any paywalled content. Reddit doesn't scrape and host web content, why do they feel the need to do so for images/video? I think there is a point to be made about a smoother user experience, but youtube is a great example where their embeds can still be monetized. Reddit not pushing ads through the API is like if youtube didn't give you ads on embedded videos.
wasmitnetzen 3y ago
YouTube and Twitch even pay the creators, and are apparently (at least sort-of) profitable, and they don't even get a share of the brand deals that are baked into the video. Sure, they are backed by huge cloud operators, but still. The hosting costs for Reddit should not be that high.
bick_nyers 3y ago
I wonder if they perform image/video deduplication at scale (or if it is even possible). So many images are just reposts or slight variations on the same thing.

8ig0unce 3y ago

Couldn't agree more. A web site who's content is freely provided, moderated for free and pretty much just linked to other content and they still can't make money without charging extortionate amounts of money. So many suitable options were voiced for the 3pa such as profit shares or just reasonable priced API fees. It baffles me that Reddit didn't already turn a profit. So over bloated and the shit they have actually paid people for such as the official app and desktop site, is just sub standard