Reddit Migration

He really is a disgusting fuck

"We are not in the business of giving that away for free."

This has the vibe of a dog with a bone noticing its reflection in a lake.

“We are not in the business of giving that away for free.” - right, you're only in business of getting it for free and then charging everyone you can for it...

He doesn’t intend to make money off of the third party apps. If he did, he could have set a reasonable price. He wants to shut them down so he doesn’t have to worry about them and to force people on to their app. Few, if any, 3rd party apps will ever pay the advertised price, so it will be peanuts if not literally zero as a revenue stream. The strategy is to get all users on Reddit-owned properties, be it the website or app or whatever else they may come out with.

Nobody is happy with being happy, they’ve gotta have more more more

We call that being a shareholder.

This is actually a big thing I learned when going to school for accounting. Any business that isn't growing is considered stagnant and will fail without new customers. So the two options are:

a) change your business somehow to bring in new customers. This can be difficult unless you're a first mover. If the market is saturated with competitors, you'll have to steal clients.

b) move into a new vertical and offer a completely different service. That's what reddit is doing. Since they're a fist mover in the API market with existing brand recognition, they're trying to control the baseline cost for the product.

The concept of eternal growth is actually a contributor to why we have recessions. Businesses grow to the point that they either have to charge crazy prices or commit fraud to keep up with market expectations - too much pressure to preform in the stock market. Then the bubble pops and companies cut their biggest cost (labor) to try and stay afloat.

Spez specifically said the pricing was based on the opportunity cost of users being on 3P apps, not the infrastructure costs. The Apollo dev fully understood this, which is why his calculation for determining why it was gouging was based on industry estimates of Reddit's total revenue vs usership.

They were going to charge 3P devs many times what a user of just the reddit.com site is worth to them. Either it was a "fuck you" price to drive away the devs or it is a sign of deep and dire internal financial woes which they were hoping the more competent 3P devs would somehow bail them out on. Likely a mix of the two, though the former is definitely the dominant note I hear.

fair but the issue has never been about charging for API usage, it's how much they're charging for it. Not sure if you're implying that a single app using the API should pay enough to double reddit's total API operating costs for all apps, but if so, that's pretty unreasonable.

I think this whole thread/post is over-thinking it. If all reddit wanted was to break-even or make some profit off of the api, they wouldn't have priced it this way. They would have had changed the api to a key system and then created a two tier pricing system: third party apps like RIF and Apollo, and a large commercial license for LLM training and such.

This is fuck you pricing. As in, if you don't want to take a job, you tell them the price is 8x your normal hourly rate. You either get that bag or more likely, they don't offer the job. Although I say this with less certainty than I would have a month ago seeing exactly how stupid reddit is about all of this, I can't believe that anyone at reddit is so out of touch they actually thought any of the third party app devs could afford this pricing, and if they did and it wasn't just to kill apps, they would changed the pricing structure and not triple/quadrupled down.

This is just Huffman going after the IPO so he can get his golden parachute and peace out. I would absolutely put money on him being out less than a year after IPO, with the small asterisk that as bad as he's fumbling right now the board might kick him before that.

$500 million is their current revenue so that would be impressive if they could double it just by charging Google and Microsoft.

So doubt they could make that much. Also they already have decades of data they got for free. How much will a bit of new data really change their models?

It all comeback to the fact that Reddit is shamefully unprofitable and everyone needs an exit strategy. A top 10 website that can't even make a billion dollars in revenue? Lol good luck selling that.

But even that is bullshit. Apollo has, at a high estimate, 1.5M monthly active users. Let's say the opportunity cost for Apollo alone is $10M: $20M minus the actual cost of all third party apps (the highest possible estimate). So spez is claiming the opportunity cost of 1.5M users is $10M at least. Reddit has 430M monthly active users, so Reddit is claiming without third party apps they could be making 430M/1.5M*$10M = $2.87B in revenue.

Their revenue is reported at $522.4M last I checked (which was literally just now).

Now Reddit's revenue isn't a direct calculation based on MAU, it's based on advertiser spend. So one of the following must be true:

1. Third party app users literally shit gold and every advertiser in the world is falling over themselves to target them or
2. spez is so full of shit he can't even keep his numbers straight

Relay is that best reddit app that I used. I'll be sad to see it go, because I'm not subscribing to a service to browse reddit.

DBrady's latest message is more pessimistic on the price point

Hard to tell right now how many users will actually pay at all - I purchased the Pro license for Relay back in 2012 (when it was still called Reddit News and cost $1.99) and used it as my sole mobile way to access reddit, but have not opened the app this week at all (replaced the icon on my phone with jerboa for the toilet scrolling needs)

After the past week's events, there is 0 chance I will ever pay money to reddit in any form, the platform is basically dead to me at this point.

And that $60m is likely chump change compared to their potential to make off data mining.