Its unfortunate for Reddit, they have been forced in between a rock and a hard place.
They need to become profitable asap since the markets have dried up but users have gotten so used to being subsidised.
They need to become profitable asap since the markets have dried up but users have gotten so used to being subsidised.
This is their own fault and they’re refusing any self reflection as a company.
I doubt enough people care enough to stay off Reddit because Apollo is shut down. (I aways think about how the "nudie scanner" revolts fizzled to a whimper in the end--and how people now just put up with doing the perp stance and being mm wave scanned.)
One way out would be for Reddit to enforce certain restrictions on 3rd party app, similar to Apple's App Store. "You must show ads", for example.
The pricing is actually reasonable. 1/4the of Twitters price.
They could also continue to allow free access, but send ads (which on reddit look like posts) together with the content. Or even better, change their API terms so apps have to follow some guidelines and show ads to free users... and maybe give apps the option to pay for a clean API too?
And of course, continue to offer and promote their own app, with all the ads and tracking they want to add.
Instead they've picked the worse option for their users. They're killing 3rd party clients and tools used by moderators and communities. Apparently they've even lied about their talks with developers and accused one of blackmailing them...
I understand the need to generate revenue, but they're not handling this well.
The paid tier is reasonable, $12k for 50 million requests (1/4th of twitter api) means Opollo will be paying $1.68 million a month. Thats entirely reasonable for such a popular Reddit app.
This gets us back to the original point, users got used to subsidised pricing (free) so Reddit was inevitably gonna get blowback no matter how they spliced this. To put it in perspective, $1.68m is 168k users paying $10/m a month. They have 1.5m active monthly users. Thats means they only need 10% of their active users to be paying customers.
P.S. Its not just a need to generate revenue, if they don't become profitable soon its game over for the current investors and management team. The IPO markets have dried up and nobody is touching anything series A and above.
SV's darling Stripe had to cut their valuation by 50% to get some money, Reddit wont be able to get anything near that. The best they'll get is some private equity type deal (FATAL).