Someone here in HN suggested that what Reddit should have done is to make API acccess a benefit of a Reddit premium account. That way Reddit would directly collect money from app users and would not have to rely on app developers to do it, and app developers would not have to shoulder risk in the same way. It seems so clear to me that that would have been a better approach.
I've suggested it a few times. One issue for this is it makes the market of users for 3rd party applications a lot smaller and it makes it harder for them to acquire users.
Having a "free trial" of premium for 3rd party apps would mitigate this issue a little bit. You can use Apollo, for example, for 3 months free and then you have to pay for Premium. In fact, a good arrangement would be for both the app develop and Reddit to take their respective cuts.
But then that kind of payment infrastructure requires effort to setup and development and Reddit seems unable to execute on much.
> One issue for this is it makes the market of users for 3rd party applications a lot smaller and it makes it harder for them to acquire users.
Why is this an issue? 3rd party apps exist to solve a problem for users running into limitations of the web interface or Reddits own abomination of an app. So this will just drive existing users into premium accounts and provides a better UX for them with barely any extra cost for Reddit. If the need exists and the opportunity exists in the form of an API someone will build that app and could still collect money on that on top of Reddit premium fee. Just keep the two separated.
Perhaps they don't but it puzzles me why. With the suggested approach they would have mutual interest in making 3rd party apps flourish. Now they alienate the community and will certainly drive many people away.
Killing 3rd party apps lets them funnel traffic to the official app instead, or the official website. Not sure if you've compared 'old' reddit to new (on desktop), or the app to 3rd party ones, but there's a lot of gamification, ads, bad patterns they're pushing with what they have. I suspect it's largely to monetize on the user more significantly via tracking data and such.
I assume they'll kill off old reddit shortly here, once they implement the API changes.
Yes exactly. Even if it doesn’t work out in practice, a user forced into the official app is theoretically monetizable any number of ways, whereas a premium subscriber using a 3P app is only ever going to use the core product the way they always have. Their ability to shove whatever they want in front of the user while also mining their data is probably helpful for their IPO prospects.
I just don't believe that you couldn't charge enough for a single user to be worth more, subscribed and in a 3rd party app, than they would make on the website as an advertising target.
You are right, and we know this factually from YouTube premium providing more revenue than free users. I, the end user of Reddit, should be able to pay for the api access directly to Reddit the company without having to impose risk on Apollo to front massive api bill. There’s no need to funnel anywhere since there’s no ads to be sold.
Am I missing something here? It seems like a blatantly obvious compromise.
Can anybody explain why they didn't do exactly this? I spend tons of time on Reddit in Apollo. I would have gladly paid $10 a month for app access. Keep the rate limiting to prevent AI training scrapers or something. Problem solved? What am I missing? There has to be a reason they are acting like this and so actively ignoring the users of 3rd party apps, right?
Its not the posts they care about, its user eyeballs. They don't want subscriptions, they want ads. It's been a while since I was in the adtech business, but at that time static banners were getting $1-$5+ per 1000 impressions (CPM) for so-so user quality. Video ads are apparently running $10-$30+ CPM. Do they think they can push 1,000 ads a month to lots of users? You bet.
Subscriptions are high-friction, low uptake, and you're always battling churn. Ads are low-friction and everybody gets them. Plus they can goose the ad revenue whenever they want by just showing more of them.
They might grumble about AI training, but its not really affecting their bottom line. I doubt they'll care much until they start selling their own AI sizzle to investors.
Edit: Oh, and I doubt they care about the hardware needed to serve posts. Guarentee they're using 10-to-100x that for the ads. Ad bidding is complex and has tight timing requirements. Tracking ad/user view data is a big firehose. If they host any of the ads themselves that will absolutely dwarf the text or even video posts. And even then, if they have any kind of a compentent backend engineering team, all those costs will be a smallish fraction of total costs.
There would have been a huge uproar if they did that too. Most Apollo users don't pay. I'd be surprised if they would get even a 2% conversion rate. The other 98% of users would be angry about losing access. Reddit would still be accused of effectively killing off 3rd party apps.
The economics are basically the same. Apollo could charge their users $0.25 per thousand requests and continue to operate. They don't want to do so.
It is a burden for the app developers to implement payment processing. And one month was not enough notice. But fundamentally, this is killing apps because most users won't be willing to pay.
(Also, 1000 API requests isn't that little. For example, getting the top 25 posts of a subreddit is just 1 API request. Posting a comment is 1 request.)
Unpaid users are important to these apps because it's what drives adoption. You can release a new paid app to browse Reddit and get maybe 1000 users, or release a free app and get 1 million users, of which 1% convert to paying customers (i.e. 10,000 customers. These numbers are just made up for illustrative purposes).
> It is a burden for the app developers to implement payment processing
But they wouldn't have had to. Most of them (all?) don't have registration features, you're meant to have a Reddit account already. A system where only Premium accounts get API access would have just required a way for Reddit to say "sorry, this user needs to upgrade to use 3rd-party clients" when challenged. That's a very simple change, nowhere near the complexity of implementing a payment-processing flow.
A good strategy would have been something like Reddit saying "API users from now on will have to pay, and the price is 2-3x of a Premium subscription, because <bullshit about them taxing the backend more>", wait for the blowback, then say "alright, we listened to you and decided it will simply require any Premium subscription".
Sorry I wasn't clear, but I meant the current system is putting a big burden on app developers. This proposal does make that easier.
But it doesn't change the fundamental problem that most Apollo users won't pay. Having a free app is what drives their growth. There would still be massive anger against Reddit, and redditors would discourage each other from rewarding Reddit for this move. They'd say don't buy premium subscriptions, we need to send Reddit a message. Reddit ends up in the same mess it's in now.
This system doesn't address the angry comments I've seen in this thread or on Reddit. There are several types of comments. Some people here say Reddit doesn't have a right to exploit value that was created by the community. Some people are angry because there was a dispute between the Apollo dev and the Reddit CEO and they feel the CEO's characterization of the Apollo dev is slanderous. (It seems the Apollo dev implied that if Reddit didn't buy them out, they'd publicly make a stink and Reddit called this blackmail. I'm not sure of the details.) Some people think Reddit is a lying, greedy corporation and doesn't need to charge for their API.
Other disadvantages are that system wouldn't discourage apps from making hundreds of API requests per user per minute and there's no guarantee the cost of a premium subscription covers the cost of all the apps a user has. Heavy users get subsidized by light users with premium subscriptions.
It appears that the eng at reddit is so incompetent that they have newer, better, more efficient internal APIs available only to their house apps.
So basically, the public APIs in question have both serious compute and eng costs that -- per a mod comment I can't find again -- are costing more than $10m annually. They can't amortize those costs across their first party apps as well, because those apps are on different APIs. They're looking -- again per a mod comment -- to make money on both the compute and eng costs for these APIs.
Add to this some incredible stupidity, as they continue to underinvest in mod tools and appear not to realize -- though I really can't understand how they could not, since it's been a point of incredible contention with their mod community for many years -- how many mods, particularly those of the biggest forums, are using tools reliant on the current apis to effectively moderate.
tl;dr: it's a big mess. They want to kill 3rd party front ends, and are unwilling to just say so; they continue to not build the tools mods need; they've lost trust with the mod community because of 10 years of lying about investing in mod tools; and they don't want to get everyone onto their internal APIs for reasons they haven't shared.
Oh, and meanwhile, they're launching a new dev platform because... they think someone smart would want to build a business with them after this? I don't know.
Third party apps represents user control of the experience, which is unacceptable for the profit maximizing executives leading up to an IPO. The end goal of every big tech platform is to control the experience fully for ad delivery or other nefarious ends. To us, it is enshittification. To them, it is profit capture. It will happen again and again before we as a society establish safeguards against such abuse. It happened with Facebook, it's happening with Twitter and Reddit, and it will happen with Discord and other such platforms.
I don’t see how that would work. A fraction of Reddit users use Apollo. A fraction of Apollo users pay Apollo. A fraction of those users would be open to also pay Reddit on top of that.
Why would the Apollo developer keep working on their app if this subset of users bring in $500/month at best?
I do agree however that it would have probably caused less trouble, because suddenly the users have to pay Reddit rather than the developers.
