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Comment by timmg | Hacker News Reader

Is it just me, or are users trying to solve the wrong problem here?

According to the CEO, Reddit is losing money. It won't survive long-term if that doesn't change. If people care about reddit and its community, it seems like that's what they should be thinking about.

If an alternate client uses the API, but doesn't return any advertising (or other) revenue, that is a good reason for reddit (as a company) to change that relationship.

To be clear, I'm not making a comment about how they are going about it. But destroying reddit's business is no help to anyone.

Lots of people on reddit (and on here) brag about using ad-blockers. They also complain about paying for services. I mean: something's go to give. VC's won't continue to fund these free services forever.

I'd rather live in a world where you view advertisements or pay a fee to use services. But I seem to be outside the norm on these things.

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CEO also 10x’d the headcount.

and spent significant funding on buying Alien Blue and then ruining it.

and spent significant resources on a new UI design that is near universally reviled.

Its not good enough to say you are not profitable, when you are a significant cause

Whoa there cowboy - next you're gonna say something crazy, like we should hold the CEO accountable for his own incompetence. Obviously it's the users who are wrong!

In Soviet Reddit, customer always wrong!

Also spent 10s of millions on a highly suspect acquisition that has something like a .01% customer retention/conversion rate.

https://en.wikipedia.org/wiki/Dubsmash

i read 50 million

> and spent significant resources on a new UI design that is near universally reviled.

Not that I don’t agree with your post, or how bad the redesign is, but is that really universal? With statistics I’ve heard about only 5-10% of people using old? And with the current protest, I’ve even seen comments supportive of the blackout by people using new and the official app.

For a non default, you-need-to-know setting, 5-10% feels really significant.

> only 5-10% of people using old

Probably a significant percentage of the people who were using old. Everyone else started with new.

I think a major factor in the scope of this blackout is that there's a lot of 3p mod tools that, per my second hand understanding, are somewhere between "significant QOL improvement" and "indispensable". So even mods who use official apps/new website/etc would be affected, and they also hold the keys to the kingdom in terms of making it happen

A lot of people simply didn't know old existed.

I actually had reddit gold primarily because of the old UI.

Old isn’t great either (if it were responsive it would be), and reddit constantly pushes users to new.

Aw man I forgot about alien blue!!

I haven't seen any notable number of people arguing that the API should remain free no matter what. I have seen a lot of people arguing that reddit is being disingenuous with the API pricing (and also making up stuff about the Apollo dev), in a way that makes it seem like what they really want is to kill all third-party clients rather than monetize them -- when a lot of users really don't like the first-party client for design / accessibility reasons.

It's worth bearing in mind that reddit's business is built on user-provided content and moderation. It doesn't have some sort of right to have the users provide these things if they're unhappy with the direction of the service.

> I haven't seen any notable number of people arguing that the API should remain free no matter what

I haven't seen any notable number of people giving a counter offer to the proposal of Reddit. People "agree that it should not be free", but are unable to give any number of what they think it should cost. All we know is that the proposal, which averages at around $2.50 / user / month is "outrageous", bearing in mind that this allows to browse Reddit fully ad-free, denying them of that revenue stream.

I really don't know how people expect Reddit to make money; they apparently don't think the service is worth $2.50 / month, but they seem to forget that Facebook sells their data for 20x that amount.

The major argument I've seen for that cost being "outrageous" is that if it needs to cost $2.50/month, there should have been a greater-than-30-days warning so that the existing clients could shift business models to support it (shut down free access, migrate existing subscribers to plans that cover the cost, etc). It's the failure to provide a grace period that gives the impression they're just trying to shut down the third-party clients.

For reference here, the Apollo dev posted numbers indicating that they'd expect a $20 million / year API access bill, and separately mentioned that if everyone with a current annual subscription gets their balance refunded now they're shutting down it'll cost them ~$250,000. (It's hard to guess how much of their traffic comes from free users, of course, so they'd presumably need to raise prices less than the 40x this implies...)

Christian Selig's post covers this in detail and includes references to other app developers with similar concerns.

https://www.reddit.com/r/apolloapp/comments/144f6xm/apollo_w...

I think some important takeaways are: the proposed pricing monetizes the users much higher than Reddit can general monetize them today. And the 30 day window apparently precludes any kind of orderly transition for the app developers who have been monetizing their apps on a yearly schedule.

> the proposed pricing monetizes the users much higher than Reddit can general monetize them today

That's the whole point ! All users of Apollo bring in precisely $0 / month. And reddit will never ever be able to monetise them at all unless they start charging for the API. That's the core of the issue; with no many free riders, the average revenue / user is doomed to stay close to 0.

The question is not "how much revenue / user does reddit make on average" since all Apollo users are dragging the average close to 0 no matter what Reddit does. The question is "how much revenue / user does reddit make on average excluding bots and non ad-watching user". The number then skyrockets and $2.50 / month seems like the answer.

The developer of Apollo was clear that the problem wasn’t that Reddit wanted to charge for API usage, it was the price.

Reddit could have just made third party client use a feature of Reddit premium and avoid all of the current issues. Yes, some would still complain that Reddit costs anything to use but big clients have paying customers and are less price sensitive.

...and the timeline. Apollo could've maybe adjusted with a 12-18mo warning/phase-in. The 30-day no-compromise plan that happened instead makes it impossible to do anything but shut down.

It’s probably more than ten things and the price is number 1. $20mil/yr or something for Apollo?

Time: only a few weeks notice. They have to notify users of a change, make a plan, program it, apple approval for updates, and Apollo is just one guy with a part time designer.

Terrible communications. Say pricing would be fair and not like twitter. Say no api changes this year. Pretend to be fair. Deception .

They could have given Apollo and the many other apps that are shutting down a little more notice and time to adjust.

I think Reddit has its back against a wall and a VC gave an ultimatum/margin call that Reddit needs to make more money with a business plan in 30 days or no more funding re-up.

Seems you did not follow the conversation very closely. Few things

1. No trust spez. so anything he says can just be toss out. He has Zero creditably at this point

2. Almost universally everyone was fine with the plan to charge for API access, the problem came in when they wanted to charge fees well outside what anyone would believe is fair or even "with in market reality" then proceeded to lie and denigrate about developers

3. Reddit is the source of the unprofitably, it is largely their cost structure that is the problem, not revenue. They want to fix it with revenue side only modifications and not cost structure. They ballooned their costs under the former CEO's brain dead plan to move everyone to CA or NY. Even though I believe they are reversed their in office requirement, they still have most of the costs that came with that move. That is just one of many examples.

Considering the apparent cost to Reddit for a third-party client is roughly $2-5 per user, I've seen a lot of people voice support for locking third-party apps behind reddit premium. The problem is reddit doesn't want just that, they also want to force everyone to use the app so they can monitor and monetize them there.

I don't see why they can't serve ads and track usage via the API?

Make it an API policy violation to hide ads, which is reasonable.

The fairest I can be there is that it might make their ad sales more complicated. It'd be more difficult to count "impressions" for an advertiser if you had to work out whether an ad served through the API was actually going to be shown to a user. The advertisers might also dislike the lack of control over the context their ads would be shown in.

This isn't insurmountable, but it does present some challenges.

Reddit wants all that sweet sweet privacy invasion that's possible with apps. Take a look at the data usage claims on the App Store/Play Store for the official Reddit app. They sign up for basically every iota of data available. The official app also "suggests" (forces) subreddit content on you no matter your settings.

Reddit wants to be an AdTech data source and delivery platform. Simply tracking usage on the web (where tracking can be limited or blocked) or the API is not sufficient to do Facebook/Twitter levels of user tracking.

None of these clients filter ads. They just return the API results. Reddit could have in theory returned ads and blocked clients who didn't (or required them to pay some/more money). Instead, they decided to charge extortionate amounts, essentially causing 3rd party apps to be unable to afford them.

It's very obvious their aim isn't necessarily charging, they're more interested in getting rid of 3rd party clients so that people would be forced to use their horrendous app. As a company, they have a right to go towards that route, but they should just say that.

> None of these clients filter ads. They just return the API results. Reddit could have in theory returned ads and blocked clients who didn't (or required them to pay some/more money). Instead, they decided to charge extortionate amounts, essentially causing 3rd party apps to be unable to afford them.

Or, you know, just reasonable price for API access. Even $2/mo gonna compensate them for lost ads multiple times over

Shouldn't moderators and active users (through posting, commenting, voting/curating, etc.) then at the very least get a discount? After all, those people are and have been compensating the platform for any lost ad income far beyond even that $2/mo.

For contributors that's already possible by getting award from other people.

For moderators while on principle I agree, "mod X comments and you get reddit for free" might give weird incentives...

> According to the CEO, Reddit is losing money. It won't survive long-term if that doesn't change. If people care about reddit and its community, it seems like that's what they should be thinking about.

You are correct. There are two ways to solve this. One is reducing expenses. How many paid employess would a site like reddit need? I would be surprised if that number was more than 50-100, and not surprsed if that number in reality is much higher.

Second is increasing revenue. Increasing the price for the API is probbly a wrong move as API increases distribution which is what you want. You do not want AI companies scraping and reusing content for model training for free, so you make separate terms for that.

Instead, you try with paid Reddit plans. Would be nice for users to own their piece of reddit and pay for their favorite scoial platform with some perks included (freemium). Also it does make sense for subreddits to pay a fee proportional to their membership after some threshold of say 1,000 users. After all, owning a huge subreddit give a lot of power in many ways. If I had a subreddit with 1,000,000 users I think I would pay $100-$1000/month to have that kind of distribution power.

Wikipedia says they have 2,000 employees as of June, citing some stats from an article about their layoffs.

(I do find it hard to pick how many employees a company "should" have, particularly since you need to account for things like HR / legal / advertising sales / etc...)

Literally nobody is saying that reddit can't charge for their API. What everyone is saying is that the proposed API usage fee structure is not designed to keep reddit's lights on. It's clearly designed to remove third party interoperability.

what other similar sites in the industry have much lower API costs?

That's a completely unrelated question.

Its totally related question, if new reddit pricing is aligned with industry, then it is fair and reasonable pricing, and apps which go down are those who built little businesses on something reddit provided for free while not contributing back, and who now can't monetize their traffic well enough.

Apollo dev can start charging his customers $5/m and cover API costs, but the problem is that his value proposition is too small for such price.

The question is whether the API pricing is designed to lock out thirty party apps. The pricing being orders of magnitude greater than the revenue from advertisers makes this clear.

You say we should ask whether pricing is aligned with the rest of the industry. Well, the new reddit pricing is not far off twitter. The latter are infamous for freezing out third party clients.

> The pricing being orders of magnitude greater than the revenue from advertisers

Can you share how you came to this statement?

> Well, the new reddit pricing is not far off twitter.

I asked not about just twitter, but about any similar site you know. For example, imgur which is often referred in this situation actually charges $3k/50m requests, not far from reddit prices: https://rapidapi.com/imgur/api/imgur-9/pricing

If you don't know such example, then reddit pricing is fair and reasonable, and that's apps problem that they can't monetize traffic.

> and apps which go down are those who built little businesses on something reddit provided for free while not contributing back

Holy shit. Reddit's only content is provided by the users. The users of their APIs generate/moderate a non-trivial amount of content that gives anyone a reason to visit Reddit. Suggesting the API users aren't "giving back" is just ludicrous.

> Suggesting the API users aren't "giving back" is just ludicrous.

and they don't, apollo free app doesn't allow you to post, you need to pay $5 to unlock post feature.

Also, obviously, I talked about revenue numbers, not content which already generated far than enough using default reddit app/web.

imgur charges ~150usd for what would cost ~15,000usd in the new structure

its $3k/50m requests not $150/50m reqs, not far from reddit prices: https://rapidapi.com/imgur/api/imgur-9/pricing

from the dev himself:

> I'm deeply disappointed in this price. Reddit iterated that the price would be A) reasonable and based in reality, and B) they would not operate like Twitter. Twitter's pricing was publicly ridiculed for its obscene price of $42,000 for 50 million tweets. Reddit's is still $12,000. For reference, I pay Imgur (a site similar to Reddit in user base and media) $166 for the same 50 million API calls.

I gave you link on official pricing, it is up to you who you want to trust.

https://web.archive.org/web/20210925071659/https://rapidapi....

was much cheaper just 2 years ago and he's been using it for at least 8 years... i imagine he was grandfathered in to an even earlier one/negotiated a deal.

that's what sane api companies do... grandfather and don't pull the rug out in 30 days

That page says if he doesn't fit into mega plan, it will cost him 50k per 50m reqs, or I am missing something?

What i'm saying is that just 2 years ago someone who signed up at the mega plan was spending 6,000 less for the same service. apollo has been using that api for a lot longer than 2 years... unfortunately the wayback doesn't go further back than 2 years. it's entirely possible that he's getting 50m req at 160 bucks because he's grandfathered in a deal is a deal generally and if they do increase their pricing you have a long time to either find an alternative or agree to it.

aside from that i don't think the $0.001/request thing is for anyone operating at a scale much larger than 150m per month. just the initial $4000 makes it $1333/50m requests... to go from that to 50k/50m is asinine as it would be 37x more expensive; you are doing a custom deal at that point.

His initial api access at the highest tier may well have been $500/150m requests based on how much the api has shot up in price for new users in just two years.

so, current facts are:

- imgur officially charges way more than reddit for API on the scale

- your point is based solely on speculations and words of apollo dev, which I absolutely don't trust

> so, current facts are: > - imgur officially charges way more than reddit for API on the scale > your point is based solely on speculations

no, we have a reasonable extrapolation based on a worldview based in how the world operates. "if you need more than this call for pricing" is a trope and i've never seen a thing go up in price per unit when you guarantee a certain amount of revenue per year. flex capacity and pricing is more expensive than guaranteed traffic.

> and words of apollo dev which I absolutely don't trust

he's been nothing but forthcoming and transparent from what i've seen whereas spuz has a history of doing shady shit.

> if you need more than this call for pricing" is a trope and i've never seen a thing go up in price per unit when you guarantee a certain amount of revenue per year

it is all over the board: you give free doze at the beginning, and squeeze business when they rooted into your product

> he's been nothing but forthcoming and transparent from what i've seen whereas spuz has a history of doing shady shit.

in my view guy is total scam:

- recorded business call without other party consent

- on that call openly proposed to get $10m to go to sunset

- when got rejected started wave in the internet with heavy manipulated numbers:

  * imgur API pricing

  * comparing Ads revenue from reddit MAU (majority do few visits per month) to his hyper active users with 250 reqs/d

I agree with your overall point, but if your business is spending a bunch of money on stupid junk your customers don't want, such as a jaw-droppingly terrible web UI and stupid Tik-tok clone features, it's not unreasonable for your customers to tell you they don't want to pay the price you're asking and take their business elsewhere.

So throw a $2 price tag on API-enabled account (enough API limits to comfortably run media account). That's probably already 10x more profit that average user provides in ads. Boom, now your API earns money for you without alienating users, and it feels fair.

And maybe not dump massive amount of effort on shittifying your UI in meantime...

No one is protesting ads, and most redditors support the idea of a reasonable monetization approach for third party apps. But u/spez is pretty open about the fact that he views third party apps as competitors and/or leeches, and he's killing them off with a fee that no one can pay. The end goal is clearly to make the platform less open so that Reddit itself can control (monetize) all aspects.

No one is destroying Reddit's business because they face with API pricing.

They are destroying Reddit's business because of how they are trying to solve their problem with API pricing.

Their solution sucks.

That's an entirely separate discussion from what is being talked about right now. They are being dishonest about the service they provide; users are responsible for the communities working at all. Their representation of the situation as for-profit company vs. freeloading users is a slap in the face to the many years of engagement that gave them this platform.

They are well within their rights as a company to attempt to monetize further. The problem is that they seem willfully ignorant of where their value actually comes from.

Reddit users are the ones contributing all the content to Reddit, just as here. Reddit provides the infrastructure, but nobody goes to a website to admire its infrastructure unless they're an infrastructure developer.

The issue here is that almost everyone who expresses an opinion hates Reddit's user interface. Many install 3rd party apps that leverage the API to provide a better one. Reddit's owners are trying to kill this off rather than acknowledge that their product offering is bad.

Essentially, platform owners are landlords who do provide ssome value (infrastructure) but nowhere near enough to justify the visions of profit that enticed them into the business, and they don't have any imagination besides 'put ads on it'. They would be better off charging a small subscription fee, but you can't grow a giant community with a paywall so they used capital and free access to gain max market share. Nobody wants to start paying a subscription for what was previously free, everyone hates advertising because it's dishonest and manipulative, so the owners have painted themselves into a corner.

This is a general problem with the platform model; people are only attracted to it because of other people who already go there, and the only way to make money out of people is to either sell stuff to them (which they don't really want) or sell information about them to other people who want to sell stuff to them (arguably worse). Conde Nast should just declare defeat and offer to sell the platform to its users.

Do you have a source for them losing money? I don't trust them; advertising aside, I think they've been covering most expenses just from users paying for Reddit awards.

Sure, maybe it makes sense from a business perspective to make their API paid-access only.

Maybe it even makes sense to make the prices so outrageously high it results in the subreddit mods striking. Perhaps this gives them the ability to remove the moderation teams and sell the spots to the highest corporate bidders.

That doesn't mean that we as users have to like it, or them, after these changes.

I'm just hoping something better comes along out of all this.

In spez's AMA, he mentioned reddit was not profitable. I don't see an advantage for the CEO to say that publicly and it not be true.

There are many ways of determining profitability (see https://en.wikipedia.org/wiki/Hollywood_accounting)

The CEO absolutely has an incentive to make it seem like this is the case, so they can use it to justify more user-hostile changes in the name of profits

I certainly don’t see an advantage in believing anything that any CEO says publicly.

>Lots of people on reddit (and on here) brag about using ad-blockers. They also complain about paying for services. I mean: something's go to give. VC's won't continue to fund these free services forever.

These people will claim that their contributions are so valuable that they drive the engagement of other plebs who do generate revenue for the site.

No, really. They do. It's the tech nerd equivalent of the "we'll pay you in clout" Instagram grifter.

I’m happy to pay for Reddit if they can figure out how to truly add value to paying users. Some random virtual tokens don’t count. I was a paying user for many years, but ended up cancelling as the difference was so thin and my usage went down significantly as Reddit deteriorated.

Honestly don't really care. Use something for as long as it's free and when they start monetising it move on to next free thing.

And I'm not the only one- WhatsApp asking for money was scrapped within weeks after they noticed rising Telegram installations.

> Honestly don't really care. Use something for as long as it's free and when they start monetizing it move on to next free thing.

As a person who grew up on the internet, went from AIM to usenet/forums and stopped this entirely in my late teens/early 20s, when do you give this up?

Despite being a millennial, at the very core ages mind you, I missed social media entirely because of how predictable this all was (the only thing they could monetize was your data, if you grew up in the early internet/chaning why would anyone willingly give this up?) so my question is: why bother?

Platform hopping is a thing for people with more time on their hands than anything else, migrating platforms seems to me like something that is something that would fall out of favour after your late 20s, when you're more likely to bother pretending to be something you're not on the internet which just leaves having endless rants with bots for engagement in your 30+ for fake internet points, which is incredibly sad... so what's the point?

Personally speaking, I just keep a close circle of friends who I speak with via Signal or Telegram if we cannot meet in person (most live on other continents) or can't do PgP encrypted email.

I have held highly social positions most of my career in and outside of tech, and I just cannot grasp why anyone would want to do use their free time on these platforms to interact with people; let alone be willingly be used as a pawn for big data based organizations, including nation states and their respective intelligence agencies.

Social media is the equivalent of playing games on your phone or binging Netflix. Most people aren't actually doing anything meaningful in this world and their time is not at a premium.

The problem isn't that they're trying to make money. The problem is the management. They would have lost the users anyway, because their official app is terrible. This blackout is about signalling that something is very wrong.

Were they always losing money? I can't imagine Reddit costing that much when all it did was serve text and was largely community moderated but now they self host videos and other things.

Reddit used to show how much users donated vs the server cost (and running costs). It was always maxed out. Reddit grew and simply got greedy. Typical enterprise company woes where a much smaller company could cover most if not all what your typical user actually wants without losing money.

Reddit didn't need to be a video and image host as you allude to. They didn't need to bloat their stack with 'hot' technology. They didn't need to even make an app, the third parties were basically doing that for free.

They want to be an ad and data platform because they know that this will in the long run net them more money. To get there though they will have to alienate their entire user base.

Just from introspection I wonder if the problem with getting people to pay is more about friction than preserving resources or being a freeloader. I don't want to think about my overall budget for services at each turn when I'm presented with a paywall or a donation page. Not to mention getting out my payment method. I don't want to pay into an exclusive communication protocol, I want to know any of my friends could join. Etc. And overall it's just not something we're used to doing.

I gotta wonder if I'm not alone, whether the solution might be in presentation and organization.

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