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Comment by willidiots | Hacker News Reader

I hope Apollo's not overplaying their hand here, though it's super interesting hearing these conversations from the inside. It's clear reddit's got it out for the 3p apps, and I'm personally leaving reddit over this (longtime RIF user), but this post is a bit concerning.

It focuses on the "[apollo can] quiet down [for $10M]" topic in the conversation, and the apparent misunderstanding between Apollo and Reddit, Reddit taking "quiet down" to mean "go away quietly, without a lot of public noise", as a threat.

Apollo states that they meant "go dark", "reduce API usage", "reduce reddit opportunity cost". But for that position to make sense, Apollo would need some leverage here. They're using Reddit's API and platform behind the scenes - they have no leverage I can see. What am I missing?

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The angle was "buy Apollo from me":

> "If third-party apps are costing Reddit so much money, why don't they just buy them out like they did Alien Blue?" That was the point I brought up. If running Apollo as it stands now would cost you $20 million yearly as you quote, I suggested you cut a check to me to end Apollo. I said I'd even do it for half that or six months worth: $10 million, what a deal!

And it would have been a deal: 6 months of opportunity cost upfront to then turn into real profit. Instead they are permanently lose the [possibly] majority of that opportunity when those users lose access to Reddit.

>And it would have been a deal: 6 months of opportunity cost upfront to then turn into real profit. Instead they are permanently lose the [possibly] majority of that opportunity when those users lose access to Reddit.

I dont think that is accurate. Reddit doesnt make 20M a year if they buy Apollo in this situation.

If something costs 20 million/yr to operate, buying it doesnt reduce that cost. You are just out 10M upfront and then 20M/yr.

The solution is not to buy it, but to make it stop.

They seem to think the 20 million is payable.

Even if they could only get a quarter of that from users, they'd be rolling in money after a year or two.

> and then 20M/yr

The servers don't cost anywhere near that much to run.

Unless you use AWS :-)

This forces Reddit to say out loud that the reason they want to introduce payments is to make third party apps stop.

Reddit has to say that the pricing it has is reasonable which means that they have to say Apollo can earn (at least!) USD 20M a year. If Apollo can earn USD 20M a year, buying it for USD 10M is indeed a steal. Normally, if you think a company makes 20M a year, you have to pay at least x 5, so USD 100M to buy this money printing machine.

Claiming something costs you 20M/yr, doesn't mean that it can make 20M/yr.

>If Apollo can earn USD 20M a year, buying it for USD 10M is indeed a steal.

Not if you can get the same thing for doing nothing. Buy Apollo for 10M up front and make 20M/yr or dont buy Apollo and make 20M/yr. Does it really look like a steal when the alternative is free?

> Reddit doesnt make 20M a year if they buy Apollo in this situation.

They claim that they would.

No, they claim Apollo costs them 20M/yr (agreeably dubious). That doesnt mean Apollo can make 20M/yr if reddit owns it.

Opportunity cost essentially means lost revenue. They (Reddit) aren't referring to server/egress/cloud/etc. costs. Eliminating lost revenue = new revenue.

>Opportunity cost essentially means lost revenue. They (Reddit) aren't referring to server/egress/cloud/etc. costs. Eliminating lost revenue = new revenue

Sure, but that doesn't mean buying/owning apollo helps them eliminate that lost revenue. They eliminate lost revenue when Apollo stops existing, not when they buy it. What is the point of buying it if you dont want it to exist?

Take 2 options:

A> Buy Apollo for $10M, Apollo shuts down, 20M new revenue

B> Don't buy Apollo, Apollo shuts down, 20M new revenue

Spending $10M doesn't stop the losses, Apollo shutting down does.

I utilized a JavaScript script to delete all of my comments and posts from the past ten years. Despite adding delays between deletions, it took multiple tries over several days because some posts kept reappearing.

I guess I want to emphasize that despite not being 3p client user (I was using old.reddit.com), this situation hurts sites reputation enough to bleed me as an user, enough for me to go through the trouble of actually wiping the account, in stead of leaving my content with me under <deleted>.

It is unlikely they'll feel short-term traffic effects of this, but content quality will suffer for sure, will see how that'll pan out. (From the safety of HN comments, of course).

According to the quotes by Reddit themselves, the 20M a year is opportunity cost, not actual cost.

agreed. Owning Apollo doesnt reduce the opportunity cost. They still lose 20M, but now they own Apollo.

How do you think the Apollo users will lose access to Reddit?

The Apollo app makes API calls to their own server, which in turn makes calls to Reddit’s API. From 30 June this proxy server will not function.

I'm aware, but that doesn't cut off Apollo users from Reddit. They will just have to use a different app or the official app.

Most of the other popular apps are also shutting down and the official app is garbage.

If I can't use Sync I'm not going to use reddit.

The key issue seems to be the 80/20 rule.

The 80% are anonymous lurkers or accounts that very rarely post anything.

The remaining 20% is split 15/5, with the former being frequent contributors to discussions - and the final 5% being _content submitters_ .

The 5% power users interact via 3rd party apps because, quite frankly, the "official" UIs (App, Website) are totally shite.

They also maintain the automated tooling to keep order of communities - again, accessed via API.

Without the 5% submitting content, the 15% won't interact and provide the remaining 80% material to read.

No material to consume = no advert page impressions = no revenue stream.

https://en.wikipedia.org/wiki/1%25_rule, actually

Almost all, if not all, third party clients are closing down, not just Apollo. The only option is a badly designed ad ridden experience now.

Reddit would need to monetize those users, presumably by adding ads etc to Apollo, eventually turning Apollo into the Reddit app which already exists today (and which Apollo users don't want to use). Only the users willing to tolerate Reddit's enshittified UX would stick around.

Reddit can just force Apollo to shut down and accomplish the same for $10M less.

> Reddit would need to monetize those users

Apollo already has monetized users with subscription costs.

Well, had monetized users.

There's no hand to overplay here anymore - the app is shutting down, and the author made it clear that is the intention. While the verbiage could've been different, that doesn't really matter. In these kinds of conversations Reddit folks could've asked for clarification, not assume bad intent (which they did, but then misrepresented).

Apollo's leverage was "We help keep power users on your platform, and keep them happy." And, as it turns out, while their numbers are not necessarily large, they are also some of the loudest and with most influence (see how many subreddits joined the blackout). What the outcome of this will be is to be seen, but it's a very shortsighted take from Reddit, in my own humble opinion.

In the game of Apollo vs No Apollo, agreed, the game is played out. Even if there's some eleventh hour agreement, reduction in API fees etc, the direction is clear - Reddit's killing these guys, just a question of when.

But in the game of Christian vs Spez/Reddit Corp, I wonder about the wisdom of posting these recordings and going this nuclear on Reddit's brand. I suspect Reddit's got some good lawyers, whether you're in the US or Canada.

Given how bad Reddit is at PR, this does seem possible.

If Apollo keeps operating, it charges its users more and pays reddit $20 million for one year, and presumably continues paying that into the future.

If Reddit purchases Apollo for $10 million, then those customers now belong to Reddit. For the first year, Reddit would "only" earn $20 - $10 = $10 million, but after that those customers would continue directly earning revenue.

It's all about reasoning with the value of the app in terms of the api rates. Either the rates are unreasonable, or that would be a reasonable sale to Reddit.

I'm not sure that math is right? If the API access actually costs reddit $20m/year then charging Apollo users $20m/year just offsets those costs. So in the first year they actually lose $10m, and just break even in following years. It only makes sense to buy Apollo if the api costs are low.

> If the API access actually costs reddit $20m/year

Do you think anyone believes that to be true?

Not at all. But it seems like the Apollo dev’s argument was “if it actually costs reddit $20m they why not buy Apollo for only $10m”, which doesn’t make sense.

This doesn’t make what reddit is doing any more reasonable though, imo.

The dev specifically said "opportunity cost" as they explained, so the suggestion is that reddit thinks there's that much revenue available.

Ah, that makes much more sense. But, it could be the case that reddit thinks someone will end up paying their outrageous fees, just not him. It doesn’t necessarily follow that they think Apollo is actually worth that much. Then again, if that’s the case it would be reasonable to work out some sort of discount that reflects the true value of the Apollo user base.

The post mentions that Reddit calculates a $20M/yr opportunity cost to allowing Apollo to continue running as-is. Apollo is trying to say that $10M one-time is a bargain if Reddit truly believes the users are worth $20M/yr.

I don't think Apollo is using this argument as some sort of leverage. Reading through the post, they seem well aware that they are defenseless. They only have the court of public opinion.

I’m an Apollo user and can’t stand Reddit in any other form anymore. Apollo stops working and I’m out.

I'm also an Apollo user and plan to leave Reddit. Honestly, I'm kind of glad I'm being pushed to leave. Reddit has become a complete cesspool since 2016, and has only gotten exponentially worse since then. While I really enjoy the niche subs I participate in, the large subs are just a breeding ground for extremist views on both sides as well as some of the craziest conspiracy theories around. Good riddance.

The point of the post is that Apollo has no more leverage after exhausting all other moves.

Apollo needs to launch its own backend IMO. Reddit itself isn't some technological marvel.

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