I'm surprised to keep hearing that charging for API is lazy and bad for a business. They can do whatever they want with their API and price their services as they see fit. Reddit isn't going anywhere because it's a good product for the end user. It's expensive to run and unfeathered access to their content was part of their acquisition strategy. Now they want to go public and want to be a real business.
I'm with Reddit on this decision. OpenAI is a multi-billion dollar company because of them. Does charging for API calls hurt small app developers? Absolutely. Nothing is free forever.
Sam Altman is on the board of Reddit, with all the peddling he is doing with US congress to limit other companies from building a "competitor", I think he is the one putting pressure on Reddit to stop API access, to hinder others.
I wouldn't even be surprised if that was true.
An ironic sentiment considering Reddit is entirely reliant upon free labor of both moderators and users who upload content to provide any experience whatsoever.
Reddit is, at the moment, purposely expensive to run. They could have chosen to be a much smaller operation and act as stewards, but they want to turn a Craigslist into a Facebook.
OpenAI will get the data one way or another. Frankly they’ve probably got about as much data from Reddit as they need. The user base isn’t against Reddit moving to monetize and they aren’t sympathetic with OpenAI getting a free ride, these are weak strawmen. There were ways to accomplish both of these goals that wouldn’t involve this change, but their real goal here is to kill off 3PA and it’s very transparent.
I didn’t know moderators were being generous with their time only because Reddit was not profitable /s
Reddit will do what it wants with with their costs. It’s not a publicly funded entity. Building on top of someone else’s content is always risky. Just look at what Twitter did a few years ago.
If you want publicly available services, you need to socialize them. As long as it’s a for-profit company, they will do as they please.
Obviously they can do whatever they want, no one is saying they are doing something illegal, the pertinent question isn't can they be doing this but should they be doing this. I disagree that this is a sound business decision, and that is taking into account their goals of going public and becoming profitable. Internet popularity is fickle and that is the only moat they have.
Based on your last line, I am not surprised that you are surprised.
Users are the reason why Reddit has any value. They are the ones generating and reading the content.
Let's see how this strategy plays out.
day -1, total API requests X Bn per day, rev $0
day 0, third party apps shut down previously accounting for Y Bn requests per day, total API requests (X-Y) Bn per day, rev $0
day 1, everyone migrates to reddits garbage app. total API requests X Bn per day, rev $0
So you see, the goal is not to make money, and if you think that's the goal then I have a bridge to sell you. It's to eliminate a user's right to use a 3rd party client for the content generated by fellow users. Unless you seriously believe reddit is going to charge itself for API requests and somehow that will be a good business strategy.
Twitter did this move, and now they don't pay their rent nor their GCP bill.
So yes they can do whatever they want with their API, the same way I can do whatever I want with my body - including shooting myself in the foot.
For the contrarians that think this API change is a good idea, here's some alternative monetization strategies by chat gpt since you mentioned OpenAI:
Premium Subscriptions: Offer a "Reddit Gold Plus" or "Reddit Platinum" subscription for a monthly or yearly fee. This premium account could feature additional benefits like ad-free browsing, access to exclusive subreddits, enhanced customization options, early access to new features, etc.
Merchandise: Sell official Reddit merchandise online. This could include items like t-shirts, hats, mugs, stickers, and other items with popular subreddit logos or memes from the site.
Paid AMAs: Introduce a system where users can pay to get guaranteed questions in high-profile AMAs (Ask Me Anything sessions). This would need to be carefully moderated to avoid turning into a "pay-to-win" situation, but could provide extra value for users and extra income for Reddit.
Partnered Content: Partner with other brands for sponsored content, but ensure it's clearly marked and relevant to the Reddit community. For example, host sponsored contests or provide exclusive discounts to Reddit users from partnering brands.
Virtual Goods: Introduce a system of virtual goods that can be bought and gifted to others. This would be an extension of the existing awards system, with perhaps more tangible benefits tied to the goods.
Educational Content: Host paid educational courses or webinars on various topics. These could be in collaboration with experts from different fields who are also Reddit users.
Pro User Tools: Develop advanced analytics or other pro tools for power users, moderators, or businesses. For instance, improved post analytics, automated moderation tools, or subreddit-specific customizations.
Job Board: Create a job board where companies can pay to post job listings to the Reddit community. This can be especially targeted towards subreddits related to specific industries or fields.
Paid Polls or Surveys: Allow businesses to conduct paid surveys or polls, giving them access to the large and diverse user base of Reddit for market research.
Crowdfunding Platform: Launch an integrated crowdfunding platform where Reddit users can support other users' projects or ideas. Reddit could take a small percentage of the funding as a fee. This would also help foster a sense of community and support within the site.
And here are the risks with going for this pigheaded API monetization strategies (again by chatgpt):
Loss of User Base: Many users prefer third-party clients due to enhanced features, better user interface, or the ability to customize their browsing experience. Losing these could lead to a decline in user base and a drop in user activity.
Community Backlash: Reddit is built around its communities, many of which are very passionate about the platform. A significant change like this could lead to substantial backlash and negative sentiment from users, harming Reddit's reputation.
Innovation Stifling: Third-party clients often innovate and experiment with new features, some of which are later adopted by Reddit itself. Losing this could slow down the pace of innovation on the platform.
Monopolization of Reddit Experience: With third-party clients gone, Reddit would essentially have a monopoly on how users interact with its content. This could lead to less pressure to improve and innovate, potentially stagnating the platform's growth and user experience over time.
Potential Legal/Regulatory Consequences: Depending on the jurisdiction, such a move could potentially attract scrutiny from competition authorities or regulators, particularly if it is seen as anti-competitive behavior.
Decreased Developer Trust: Many developers, not just those directly working on third-party Reddit clients, might lose trust in Reddit. This could lead to decreased participation in any future developer-oriented initiatives by Reddit.
User Migration: Some users might migrate to alternative platforms that offer more freedom and customization, which could result in a significant loss for Reddit, both in terms of users and potential advertising revenue.
I don't think reddit cares as much about third-party clients as much as being mined for data. There is a case to be made that third-party clients take away from their ad revenue in the same way that third-party Twitter clients took away from Twitter's ad revenue (Twitter's financial woes are not due to limiting third-party clients by the way). It also adds a level of complexity since all changes to the platform require API changes as well (and backward compatibility support).
In fact, most, if not all, of your ideas require that a user use a first-party client.
Thinking that monetizing API is a good idea is not contrarian, by the way. It's what the company is looking to do. Rolling back this decision is the contrarian approach. Semantics but worth pointing out.
I'm with Reddit on this decision. OpenAI is a multi-billion dollar company because of them. Does charging for API calls hurt small app developers? Absolutely. Nothing is free forever.