This is something I can’t seem to figure out. Let’s just assume that 3rd party apps are the reason reddit is losing money. So, it would make sense that reddit wants to start charging for their API access. But why is the burden on the apps and not the users?
Looking at it from the view of Reddit, their original excuse for charging for API access was due to the usage of it for machine learning with training their models. LLM’s (Large Language Models), such as LaMDA (Bard, Google), GPT-4 (OpenAI), need an enormous amount of data inputted into them and Reddit has a large amount of high quality conversations, making it an invaluable source for them.
However, because Reddit’s API was free, they didn’t get a cent of this. Unsurprisingly, they didn’t like this and wanted to profit off of this in some way. So they decided to charge for the API data access.
However, there is a clear issue with this as the Reddit API was used by third party apps, that don’t abuse the API and use it to operate their Reddit clients.
It’s quite clear now that the intention was not purely based on LLM’s as there was a large number of solutions that Reddit could’ve used to charge for API access for those wanting the data and those who are simply operating third party apps.
- They could’ve made a system where app developers can apply for a specialised API key to be used for third party apps.
- They could’ve made different pricing tiers for those who are operating third party applications with adjusted rate-limits for mass-scraping compared to generalised browsing.
- They could’ve allowed third party apps to have their users use their own API key that they get from Reddit themselves.
- They could’ve worked with developers to add advertisements for their apps unless a premium subscription was purchased from the developer.
- Many, many other ways they could’ve handled it other than this living PR nightmare.
Client developers were absolutely more than willing to discuss these options, yet they were thrown a ton of hurdles by reddit.
So why do they want you to use their app?
- They get engagement data, since your usage can be completely tracked by them when using the app, such as how long you’re looking at posts for, your engagement with specific topics, etc.
- They can show you advertisements, this is their primary source of revenue.
- They can promote their other revenue schemes, like purchasing coins and NFTs.
- They can wall parts of the app off, like preventing you from downloading videos and forcing you to share the link to reddit, thereby creating engagement.
- They can show investors the number of app downloads and their apps growth. This also makes it more likely that they get promoted in the various app stores. They probably get disdain every time they see Apollo being promoted many times by Apple, even in WWDC presentations, over their main app.
These are a few examples of reasons that Reddit want you to use their app and there are most certainly many more. However, their argument has a fatal flaw, in that the value of Reddit does not come from their platform, but it comes from the data within it.
Social media follows this rule usually, 90% are lurkers and 10% are contributors. However, it depends. You might have a 1% of contributors that are prolific contributors that produce most of the sites content, or you might have a very small portion of contributors, like 0.01%. Think of the number of YouTube users and how many actually post videos themselves, or even contribute to the comment section.
Reddit contributors will be more likely than the average lurker to use a third party client or adblock on their browser. The revenue from these users is net-loss on paper, however, in reality, they are contributing significantly to the content that the revenue-generators will be viewing. If this content didn’t exist, there would not be a lurker to view the content, they’d simply go elsewhere.
Reddit doesn’t see it this way, they see these users as revenue losers that need to be migrated to their official app so they can begin to generate revenue. However, as mentioned, the huge backlash indicates that this was a terrible idea. Especially considering that unlike a platform like Twitter, Reddit is divided into sub communities managed with volunteer labour. As with the contributors, these individuals are much more likely to be using adblock or a third-party client. The Reddit app is rubbish, Reddit themselves have admitted this. Power users are going to try and find an alternative method of browsing that they find is better, which they have done.
Reddit absolutely knows this. /u/spez made an indication in his main post for his AMA that old reddit is not going away. They likely have engagement data for this and know that many contributions are made through old reddit. However, old reddit still gives them revenue and it’s still their platform. They added advertisements a few years back. https://safereddit.com/r/changelog/comments/c5clgh/ads_are_now_in_feed_on_old_reddit/
TL;DR Reddit wants money, but those who don’t use their app don’t generate money, on paper. In reality, they do. But it’s hard to convince investors of that.
Alright. I’m convinced Lemmy is the future if this is the quality of replies here. Nicely done!
Right? I was using Reddit mostly as imgur interface lately, but I see the real discussions here. Feels like Reddit many years ago.
LLM’s (Large Language Models), such as LaMDA (Bard, Google), GPT-4 (OpenAI), need an enormous amount of data inputted into them and Reddit has a large amount of high quality conversations, making it an invaluable source for them.
Google already copies every public web page they can find, as part of search indexing. They don’t need to use API queries; they can just scrape the published HTML just like they do for every other page on the web.
What does this mean then? Reddit’s true intention is to shut down the 3rd party apps?
Personally, I think their intention is to get revenue so they can IPO and get stinking rich.
They would like a sudden increase in revenue, so investors think that they’re capable of continuing to increase revenue.
One step that many tech companies use to get revenue in a pinch is to stop giving things away for free if they can charge for them.
The question remains whether they can charge for them. If not, it’s possible there’s another exit strategy; the current team have got to be tired.
Just to invent a dumb one: kicking out the NSFW and selling the site to Disney; let the Trumpies exit, then promote the site as chiefly for chit-chat about Marvel movies, cute animals, cool science facts, and mainstream politics & news.
They want to kill 3rd party apps so that everyone needs to use their shitty app, they don’t actually want money from them. And I guess they want that because it has something to do with data, ads and a shitload of money.
I’m no expert, but probably has to do with collecting data and showing ads. And also having more control of how people interact with the platform (new desktop interface + official app).
Yup, ads on mobile apps. They can not make money from ads on Third-party apps. So, kill those apps off and force users onto the Official Reddit app. Perhaps the $20M they were going to charge RIF is how much they think they were missing out on.
Dealing with a dozen app developers is way, way easier than trying to deal with millions of users. You could have one person work a couple days per month servicing app developers and totally help them with whatever they need. You would need a huge support staff if all app users actually subscribed to help them figure out what’s going and signed up and talk about billing, and you’d lose 10% of what you charge to credit card fees.
Plus, very, very few people will ever pay for social media. Charging users wouldn’t really do anything. It’s conceivable an app developer doing well would pay some amount to keep getting paid from his app, although obviously reddit’s fees are ridiculous.
It would be some increased effort to manage users over app developers but not a significant amount in my opinion.
They already charge users for Premium so it would only be a new “plan”. Also, they don’t need to manage individual users as much as they manage app developers. If I’m an app developer and you’re expecting me to pay a few million dollars a year or more you better be sure that I’m going to contact you every time I have a slight problem!
With regards to the 10% fees, by charging the app developers those fees go up significantly due to the large fees that Apple and Google charge. So Reddit could charge the users less than the app developers ever could which would increase the chances of people paying.
I think that the argument that people won’t pay for social media isn’t really relevant. They’re forcing people to pay for it if they want to use third party apps whichever method of charging they use.
For me, the big issue (besides the cost) is that they’re charging based upon app usage instead of per active account. How is the app developer supposed to manage that? Would they charge the same amount to everyone where the people who use it less subsidise those that use it more? Would they use tiered charges that are more confusing for users?
I think that they should charge a fee per active user and allow X calls per hour or day per Reddit account per app. That way, app developers can manage their costs more effectively.
Edit: this is all assuming that they genuinely wanted to keep third party apps which I’m sure that they didn’t
Because it was never actually about the ‘cost’ of the API. The plethora of tracking data they get if they convince people to use the official app is worth far more than a small recurring fee to users.
As well as the tracking data there’s also the loss of advertising revenue that would be generated via the official app. I don’t remember ever seeing adverts in boost.
