Now they’re facing competition in the fediverse, with apps that remove a lot of the barriers to entry (two iOS apps are currently in test flight and both look VERY promising)
Reddit's model was kind of novel in that they did it in directly by expecting the 3rd party apps to collect the payment from their users but they did essentially just ask people to pay for 3rd party app access.
I cant recall any instance where a social media company successfully extracted actual cash directly from their users that ended well.
if you look at what reddit was asking it kind of evened out to less then $5,- a month pr user which seems to have been so much more then what the 3rd party apps was able/willing to charge that they had to fold.
So the authors did the only thing they could, that is returning all of recently billed money and closing their apps down.
Because they're making the apps have to pay this fee with absolutely 0 notice.
They're putting the burden onto the apps. The solution here was to put the burden on Reddit (Where it would've made sense)
I don’t feel bad for them. Reddit is such a huge wasted opportunity to begin with. And they never seem to learn lessons other people make.
It's fine for steady state / going concern financing.
But no public or pre-IPO company wants to look like that.
Advertising and engineered products allow you to create new revenue streams from your existing userbase, and because your customer isn't your users (B2B) price increases can be invisible.
Any sort of significant change to Reddit by any CEO, whether it be Huffman or Santa Claus, was going to illicit a significant toxic response.
What has put me off Reddit more than anything is the level of uncalled vitriol and mean spirited comments by not only the users but the temper tantrums and petulant behaviour by a number of the mods. And when push came to shove most of these mods crumbled like my grandmother's hip after her fall down the stairs.
This would've also created an internal competition for Reddit to improve their app.
The profit sharing didn't need to be that large either. 5-10% would've been huge.