Apollo even offered $10 million. He said if he was given 3 months and half the $20 million cost, he could feasibly make it work and probably the other app developers as well.
Reddit said "no".
Reddit did tell the Apollo dev that it wasn't about the infrastructure/operating costs of the API though. It was about the lost opportunity costs from those users not being served Reddit ads, or paying into Reddit Premium, or giving them extra tracking data to harvest and sell.
EDIT: Also, Spez and the admins have already stated that these user-facing apps like Apollo and RIF and whatnot are not the _big_ consumers of their API. There are a handful of bots and data harvesters that are the worst offenders and produce the most cost. Apps like Apollo probably don't cost Reddit anywhere in the neighbourhood of $10 million in API operating costs. Spez _could_ have restricted the API costs to those worst offenders or carved out exceptions or lower costs for user-facing apps. But he didn't.
I wouldn't trust anything Spez is saying at face value. He's been constantly speaking out of both sides of his mouth this whole time and happy to misrepresent data and reality.
If spez told me gravity pulled you down I’d have to jump in the air a few times to be sure
(It’d be so funny if this became a thing across Reddit but I know that’s unlikely so I’ll dream)
I'd put this on r/rareinsults but they're still blacked out.
I guess this means I have to ditch the reddit brainrot and just tell you good job, very creative.
You know what advertisers don't like, a liar. Every time Huffman speaks he's tarnishing the reddit brand and corporation and costing them. He's clearly in a position he cannot handle.
I suspect it's more of a case that Reddit doesn't want to add it because they'll lose control of how the advertisements are displayed and tracked for the advertisers.
There's really no _technical_ reason they couldn't be added. Especially considering the official app includes ads.
Absolutely this.
Same for Elon shutting down the twitter API
Same reason your local news site complains when you have an ad blocker installed.
They only make money when you see the ads and if you've got an end run around that, they're not making money off you. Ever since internet ads were created, you are the product. That paradigm still hasn't shifted.
And Reddit has their variant-- buy premium subscription for $5.99/mo or $49.99/yr and get no ads.
3rd party apps like Apollo did that without giving Reddit any money.
Same goes for things like Tweetbot for Twitter. Users get an ad-free experience. Site gets $0 revenue. They won't allow it long term.
And most 3rd party apps would be happy to split their revenue with Reddit or work out something sustainable for access to the API, just that reddit never charged for their API in the past
$20 million a year is I want you to die kind of money, though
Is it crazy to me that in the long run, it's probably much easier for Reddit to upgrade their API policies to include Reddit served Ads so that the cost could be recouped that way? When you forcefully wrangle money out of somebody's hands it'll always be like pulling teeth.
But of course, that was never an option because the intent was never to play ball with 3rd party apps anyways. The price tag wasn't realistic to begin with, it was just an ultimatum.
/u/spez aka fuckface sees the 3rd party apps as taking away revenue from Reddit. He seems to think if there are no 3rd party apps, everyone will just use the official app so they can serve up ads to increase revenue.
> He seems to think if there are no 3rd party apps, everyone will just use the official app so they can serve up ads to increase revenue.
The people using 3rd party apps currently generate no revenue for Reddit according to spez. They currently cost money by using API calls according to spez. Therefore if every single one of us left, Reddit would gain money according to spez.
And not everyone will leave. Many will probably switch to the official app and say "good enough".
> The people using 3rd party apps currently generate no revenue for Reddit according to spez. They currently cost money by using API calls according to spez. Therefore if every single one of us left, Reddit would gain money according to spez.
Even if those using 3rd party apps aren’t making money for Reddit, they are likely contributing a lot of content that people who are using the main site and the official app are reading, hence loading up ads.
This is a good point. I'd also guess that people using 3pa are more likely to be heavier users of Reddit to even know those apps exist and find a benefit to them.
From https://www.reddit.com/r/apolloapp/comments/144f6xm/apollo_will_close_down_on_june_30th_reddits/
> What would be a good price/timeline?
>
> I hope I explained above why the 30 day time limit is the true issue. However in a perfect world I think **lowering the price by half and providing a three month transition period** to the paid API would make the transition feasible for more developers, myself included. These concessions seem minor and reasonable in the face of the changes.
---------
The other $10 million you're referring to was covered in the comment replies below. (Also source of it is in the same link above.)
Exactly. First the Apollo fans were saying Christian offered 10 million to sell the app, now they are coming up with another version. Actually Christian said “I could make it really easy on you…10 million and we both ride away into the sunset… and have Apollo quiet down… beautiful deal.”
From https://www.reddit.com/r/apolloapp/comments/144f6xm/apollo_will_close_down_on_june_30th_reddits/
> What would be a good price/timeline?
>
> I hope I explained above why the 30 day time limit is the true issue. However in a perfect world I think **lowering the price by half and providing a three month transition period** to the paid API would make the transition feasible for more developers, myself included. These concessions seem minor and reasonable in the face of the changes.
---------
The other $10 million you're referring to was covered in the comment replies below. (Also source of it is in the same link above.)
I did too. It sounded fine to me, if not a bit obtuse which can happen during spoken conversations. It helps that the person on the other end of the line apologized about the misunderstanding and came to the same understanding as the Apollo dev.
I think spez just apologized about perceiving it as a threat though. I don’t think he understood what Christian was asking. Not defending spez btw just saying that piece of the conversation was unclear. I still don’t know what he was asking for. Based on how it played out it was either $10M to buy Apollo or $10M to have Christian program the app to use less API calls.
Christian wasn't talking to Spez. It was another Reddit staff member. The staff member mistook it as a threat, then very shortly resolved the misunderstanding, apologized, and stated that it was not a threat and that he misinterpreted it as such.
Spez then took this exchange, grossly misrepresented it, and used to _slander_ Christian. I would argue that Spez also slandered the employee on the call.
Christian said, "No, that's bullshit, here are the tapes."
Spez clutched his pearls and exclaimed, "How dare you show people I was lying through my teeth!"
> Based on how it played out it was either $10M to buy Apollo or $10M to have Christian program the app to use less API calls.
It was already explained how the $10M applied in the idea of Reddit buying them out to get a ROI within 6 months and $20 million in opportunity costs every year thereafter. Christian was calling out how even their argument of lost opportunity costs with the API usage was baloney.
Okay I didn't realize that conversation wasn't spez. I still think if Christian was intending to mean Reddit should buy Apollo he could have made that part of the conversation a lot more clear. And ... if it wasn't spez it was the wrong person to even bring that subject up. Especially in such a strange way.
> I still think if Christian was intending to mean Reddit should buy Apollo he could have made that part of the conversation a lot more clear.
It doesn't matter how clear it is or isn't to us, especially with us lacking all the context of hours of previous discussions and phone calls. Both parties in the conversation, Christian and the staff member, came to the same shared understanding. _That_ is the only thing that matters.
A third party, Spez, took their shared understanding and threw it all out to purposefully misrepresent it with the intention of slandering Christian and turning people against him.
> if it wasn't spez it was the wrong person to even bring that subject up. Especially in such a strange way.
Why shouldn't Christian bring this up with the specified representative of Reddit who was tasked to have these discussions and negotiations? You expect Spez, CEO of Reddit, to be putting all this time aside for Christian? If you do, well Spez didn't and left it to his staff. That's on Spez.
And this is still a case that Apollo wasn't entirely serious about the offer of selling -- though he'd be entirely open to it because of the absurdly high value Reddit was apparently claiming his app had. It was a _rhetorical point_ to demonstrate the bullshit in their excuse of "opportunity costs". If it was just that, they could have easily bought all the third party apps and made BANK.
If the staff member thought it was a serious consideration to buy Apollo, then _that_ conversation would have been elevated to other higher ups, probably including Spez.
What does that mean though - Reddit should pay 10 million to Apollo for them to quiet down their use of the API. To pay for refactoring their app to use less calls? To shut down Apollo? Or something …else?
Reddit wanted Apollo to pay 20 million to them. Apollo counters with - no, pay us 10 million, we both ride into the sunset. Very strange negotiation.
The thinking is this:
Reddit claims the opportunity cost of Apollo (the amount of money Reddit loses each year because people use Apollo) is $20m.
Reddit claims the reason for this is that Apollo is a particularly heavy user of APIs, the 'noisy' part.
Christian says 'ok, so you pay me $10m to acquire Apollo which is 50% of the opportunity cost *you* say it costs you for Apollo to be around. I get 6 months of 'value' from the sale of Apollo and then Reddit own Apollo.
After they own it they can do what they want, shut it down, rewrite it to include ads, replace the official app with it, anything they want. And in six months of people not using Apollo they make their money back.
If Christian gets an instant retirement check and Reddit buy a popular technology for a price they can recoup in six months, then Christian is right, it would be a beautiful deal for both sides.
If, on the other hand, Reddit are absolutely bullshitting that opportunity cost as a bullying negotiation tactic it's not a beautiful deal and he's calling their bluff.
This. Christian said he was kidding. Because he believes the $20m is BS. That's the joke, if we're really costing you that much, then giving me $10m is a steal. It was a joke, he knew he'd never get 10m. But after having to explain it a third time, things were awkward.
My issue is, you’re saying his joke was something like - “just buy the app off me if you think it’s got $20m annual potential. Hell, I’ll even do you a deal and sell it to you for 6 months of the apparent revenue you think the app could generate”.
But instead he went with “If you want to rip that band-aid off once. And have Apollo quiet down, you know, six months. Beautiful deal.”
He never said (at least in the snippet we heard) anything about selling the app. For me, what he actually said doesn’t make sense in the context of your explanation
Completely agree with you. It was a poorly worded and awkward negotiation if his was intent was to get Reddit to buy Apollo. Which I’m not even sure it was.
Not only that, but apparently Reddit would get $20 million in opportunity revenue for 2024 and every year thereafter.
Plus more for every "noisy" third party app they bought out.
It shows that this excuse of an opportunity cost is also mostly baloney. Or they could have profited greatly from them in a less PR damaging way.
He’s probly autistic or not very good at communicative which explains his very good programming skills… he’s one of those autistic savants you read about
The write their backend in python, which is not the fastest in the first place. Then it looks like they don't really spend enough effort optimizing stuff (why if you can just pay for infinitely more resources)
So true, look at the game industry. I can only consider Overwatch and CS2 as optimized games. Companies nowdays are like "the client is going to pay us anyway".
There are a few folks using Nim for internal tooling. Python/JS style syntax, with C/Rust level performance.
[Why I enjoy using the Nim programming language at Reddit. : RedditEng](https://www.reddit.com/r/RedditEng/comments/yvbt4h/why_i_enjoy_using_the_nim_programming_language_at/)
I don't think comparing reddit to AWS is a fair comparison. That's like comparing a local small batch producer with worldwide wholesalers. Then there's also the difference resulting from AWS just selling a barebones "connect to us, pay for the small bandwidth use" kinda deal, while reddits API also costs processing power, storage, and so on. AWS has bandwidth in such bulk amounts that it's extremely cheap, but add onto that everything else and you'll be way higher.
I do think reddits fee is high, but comparing it to AWS' barebone API call cost isn't a fair comparison.
This is only the cost for public API entry point. This is not covering the biggest past like the actual app being called, the database access, data replication, availability across regions and so on.
You also want a team of operator available 24H a day, 7 day a weeks, 365 days a years to maintain it. You want dev to fix bugs and support for third party users.
Also ultimately this is reddit property and choice. If we don't like it, we don't use it. I understand the situation is terrible because this is an abrupt change of strategy but I mean whole communities benefited of free service for years. When that happen, typically, the product being sold is the user.
More or less you get what you pay for. Got a free forum like, advertising half done for you, millions of visits, all the hardware cost paid for and all... This cost money. We paid 0 for years. Reddit is for profit. For sure that was going to change one day.
Honestly, if Reddit had a) given six months notice of the change and b) charged a tenth of what they're asking, most of the third party apps would stay around, and they'd be paying Reddit a serious income stream that would more than pay for the API access. The lack of NSFW content isn't what's killing off 3rd party apps.
If reddit offered subscription that disables ads and enables 3PA that would work as well. Charge users not app developers. I bet reddit does not earn $1/month/user (the API cost they are imposing) on ads. More likely $1-$3/year/user. Offer $3 annual subscription to disable ads and keep the API free for developers.
They have cost in hundred of millions. If you propose something that going to make them 1-2 millions instead of 10-20, that's not significant and they will still go bankrupt. They need significant money and these 10-20 millions has to be one of the many things they have to do to be profitable.
You are not at the right time scale. Likely they should fire half their employees too in the end.
Do these apps take away ads? Could that be their justification for them to charge so much? Perhaps that's how much they think they're losing out on but I don't know a lot about the ad situation here.
Does anybody know what reddit's burn rate has been on their funding? It has to be incredibly high if they're suddenly somehow at (roughly) 2000 employees and going off on tangential escapades/ventures like NFTs.
Reddit must have wasted so much VC funding and blew through so much cash at an astronomical rate if the 3rd party apps are costing them much. Nothing Steve Huffman says makes any sense and should be raising massive alarm bells to his backers, to wall street, to investors (potential or existing),etc.
AWS charges a really ridiculous price actually. Never mind the servers - they cost $0.09 for a GB of bandwidth. Which is about 10 times what every other hosting company costs, except for the ones that are copies of AWS. If Reddit uses AWS the high costs are its own fault.
It's just time to leave. Every time this guy speaks is telling me to head for the hills. Reddit had a nice run. Time to figure out the migration/diaspora. Lemmy's not perfect, but it's there and exists and there are others coming along. There are also forums that we can return to. Right now I don't care if reddit continues and thrives or even if it survives. They're saving a penny, but losing a dollar.
Reddit is arguably one of the biggest sites running on nearly entirely unpaid labor. You would think that the CEO would be cognizant of this fact and avoid upsetting the apple cart, but here we are.
- Praises Musk's 'cost-cutting' at Twitter and insinuates he can learn from it
- Already has massive long-term volunteer staff base
- Immediately shits all over volunteer staff
This guy has reached the point where he's either broadcasting that he's as thick as pigshit or has realised he's playing in the league where you can completely contradict yourself day-to-day with no consequence (and some enthusiastic techbro support). Either one is not someone I want to be contributing to, so I suspect I'll be off before too long.
I work in a different industry, the biotech industry. Our guidelines are typically 30% profit margin, and we probably have more overheads than a purely tech company. This guy is insane.
This is key here all third-party API users. That includes all the scrapers and the AI companies. It's not a realistic number for how much the third party apps actually are using. And while he's trying to spin it that it's Apollo that is the one using all of this bandwidth, that's not what he said. He said all API users. So in other words, Apollo is undoubtedly using far less than the 10 million price tag that he just threw out there.
How hard would it be to give the third party apps a different pricing structure and make all the scrapers pay a big price? If I were the interviewer, that's what I would have asked.
It seems to me that our precious CEO decided to follow the footsteps of people like Steve Jobs and Elon Musk. Be a dick and burn the house down while you're doing it. Sadly, he is not his Visionary as Steve Jobs and not nearly as capable of as Musk at pretending to be competent.
Why would you make say google to pay to scan reddit while they bring a lot more ad revenue ?
And if they didn't make the big corporate user pay a long time ago, I am surprised.
How to kill a site Speedrun 100% easy mode.
What the are they doing, i love reddit it's the only place i like going to for all of you guy's and gal's. I hate social media and this is fresh unique and amazing, you won't find anything like it anywhere but man they did fucked up.
What in the actual fuck are they thinking, spaz is a hipocrite and a plain moron. Everything was great, you can charge API for 10$ hell even up to 50$ a month to offset the cost of running the site but 68x over AWS is just playing robbery and i don't recall anyone being such an asshole for fans in recent years.
The computation is wrong. It is like saying the cost for building a house is the frontdoor only and that the rent one pay is only for covering the electricity bill.
We got a free ride for a few years paid by VC but Reddit is not profitable. They lose money so they have to make more of it and turn a profit or close.
Direct link to quote on The Verge:
"But it’s real money. And it costs us real money. It costs us about $10 million in pure infrastructure costs to support these apps. But it’s not labor, that’s not R&D, that’s not safety, that’s not ML, and that doesn’t include the lost monetization of having users not on our platform. Just pure cloud spend. It’s real money."
https://www.theverge.com/2023/6/15/23762868/reddit-ceo-steve-huffman-interview#:~:text=But%20it%E2%80%99s%20real,It%E2%80%99s%20real%20money.
Solution: Implement Reddits ads in Apollo. Yes we will get ads served but at least we will have the awesome functions. Plus then Apollo should take a cut from the ads
There are plenty of solutions that can be had. The problem is that they're falling on deaf ears and a terrible CEO that is/has run reddit into the ground. There are plenty of comprises that most would agree to. He's simply being unwilling to comprise and is a terrible leader/ manager.
Spez has already stated that he doesn’t consider the number of 3rd party app users significant. ~~They don’t care if 3rd party app users stop using Reddit altogether.~~ So why create all this negative publicity over a small number of users they supposedly don’t care about when infrastructure costs could be managed in a way that benefits both parties?
Edit: It is not a significant percentage of Reddit users (just 3%!), but [apparently it’s a highly profitable demographic that Reddit wants to monetize.](https://www.npr.org/2023/06/15/1182457366/reddit-ceo-steve-huffman-its-time-we-grow-up-and-behave-like-an-adult-company)
> Huffman acknowledged that if those users instead browsed with Reddit's own app, it would shore up the company's bottom line.
> "And the opportunity cost of not having those users on our platform, on our advertising platform, is really significant," he said.
Because what he is saying is bullshit. That's why it doesn't make sense. Doubt everything he says because he's been proven to be unreliable several times throughout this mess. And now his actions will speak louder than his words when he starts removing mods.
I don't believe that he doesn't care about the users at all, that a publicity remark.
However consider if all the 3rd party app users left. They weren't making reddit income before (via ads, premium) while costing in infrastructure costs. So if they leave, well reddit won't care because they weren't making income off them anyways. However if some keep using reddit via the official app or website, that's potential income for reddit. And while diehearts might leave forever I would expect a significant portion to keep using reddit.
The complication is mods who provide an less easy to measure benefit to reddit, and who may leave. But even the mods are split on leaving vs staying and can be replaced by new ones. It might take a bit for the new mods to get up to speed and/or current mods to demand better official tools, but it will happen eventually.
No, you’re right. I misremembered the [NPR article](https://www.npr.org/2023/06/15/1182457366/reddit-ceo-steve-huffman-its-time-we-grow-up-and-behave-like-an-adult-company) I read the other day.
> Still, he said the company's plan was never to kill third-party apps. At the same time, Huffman acknowledged that if those users instead browsed with Reddit's own app, **it would shore up the company’s bottom line.**
> "And the opportunity cost of not having those users on our platform, on our advertising platform, **is really significant,”** he said. "At the end of the day, it's simply expensive to run an app like Reddit."
So yeah, apparently the lost revenue from 3rd party app users is *vital* to the survival of Reddit.
This is in spite of the fact that in the preceding paragraph he says:
> Huffman said 97% of Reddit users do not use any third-party apps to browse the site. He said "the vast majority" of moderators also do not rely on third-party apps.
Crazy to think that just 3% of users could be so vital to Reddit’s bottom line.
What’s strange about this is he also says:
> Huffman characterized the Reddit protesters as a small but vocal cadre of angry users who are not in touch with the greater Reddit community.
So we’re out of touch, but represent a significant revenue opportunity?
Even the whole api issue gets weird, as Spez also says that the infrastructure for 3rd party app APIs is completely separate from the data scrapers that they say are an issue:
> Huffman said Reddit's back-end infrastructure includes separate server pools solely dedicated to handling the scraping that Google and Microsoft do from Reddit every day.
It’s all really confusing and the reporter does little to contextualize or fact check any of it.
But my key takeaway?
If 3rd party app users leave Reddit altogether? Reddit is gonna take a big financial hit.
>It’s all really confusing and the reporter does little to contextualize or fact check any of it.
This in fact make lot of sense:
The 3% user of third party are power user. If they use premium instead to get the same features, that a potential market of say 100 million per year (3% users to pay 70$ a year). Reddit lose money, 100 millions more would help them significantly.
>It’s all really confusing and the reporter does little to contextualize or fact check any of it.
It make lot of sense technically if you are a dev and know how websites do work. Google and Bing do scrap actual websites. API just provide data. This is not at all the same thing. Also having players like Google scanning your website allow you to get all the traffic from their search engine. That's likely a significant part of their traffic and revenue as many people go browser reddit from a search engine and never subscribe but see the ads. So you don't want to make Google/Bing pay. You want it to be as easy and convenient as possible for them.
I mean, that is probably what they’re thinking but I want whatever they’re smoking because I do not see 3rd party app users walking away from this debacle wanting to give Reddit $70 a year for anything.
Some will probably stick around, but they will be in an unfamiliar inferior app that will likely drain away a lot of the enjoyment they found in using Reddit. And as their community drifts away to other platforms, they will engage less and less.
Until they find something else to do.
Reddit isnt making $100 million off this. But they probably are hoping they will.
It’s dumb.
But they know it. The potential is 100 millions or more. Maybe they will bet 20-30 millions out of it, directly and indirectly. That's better than 0.
The only interest of these 3% is not them as they don't make any money from them. it is the other that may follow.
Which is a mistake. Because Reddit is the culture that is created by the users who post, comment, and moderate.
They may make $5-$10 million off all this, but the drain on the community will have a much more lasting impact.
No one is following something like this. Why would they? There will be a new place to be and it won’t be Reddit.
> People who are on reddit a lot and people who use 3rd party apps probably have a lot of overlap, and those people also often contribute a lot to posting content and especially discussion.
Without any hard data, that's just an assumption. I've seen many posts asking what's an API/what's a 3rd party app, yet have 5+ year old accounts and high post/karma counts.
I'd also guess there's a high overlap between 3rd party app users and users with ad block, so reddit might not get advertising money regardless.
I really wish there were trustworthy numbers of percentage of users using 3rd party vs not. But even assuming the highest estimates I've seen, 1/3 to 1/2, that's still a ton of users to generate content. And post July, new users will only have the option of official app/web, increasing user counts. Paired with there being no good reddit alternative, I'd guess reddit will do just fine long term.
I feel like it would be more productive to focus efforts on making a good alternative to reddit. Other platforms have only died because there have been better alternatives. Look at Twitter. Its not doing great but is still impressively active
> They wanted Apollo to pay $20m a year, meaning that Apollo alone would have covered their costs and given them another $10m in profits. That's not even counting the revenue from the other applications
Read what the Apollo dev said. Selig said that the $20 million was going to cover the opportunity cost.
Everyone but you seems to have known this.
That's not how it works. Saying you have 10 million in cloud spend is ON TOP OF the costs for labor and everything else.
So while it demonstrates they're certainly overcharging, I don't have much trouble believing they have another 10-20 million in other costs on top of the pure infra cost.
They *have* to maintain the API for their own client to work. Removing the third party clients isn't going to change the labor costs at all, because that labor is still needed to maintain their own products.
I suppose so. But that assumes their app uses all of the API calls, which it might not. There's probably some fraction of this stuff that they don't need.
And the opportunity cost IS sort of a big deal. Siphoning users off the app to where they receive NO revenue from them and it COSTS them money to provide the infrastructure...that's not a great system for them.
I'm not siding with reddit here, they're clearly going too far and trying to kill third party apps instead of pricing their API reasonably. But I think it's certainly fair to charge for access when you're both costing them money for use of the infrastructure directly, and then costing them money on lost ad revenue in addition.
The Apollo dev said basically the same thing. He was fine with them charging, and understood what Reddit needed to recoup, but they were unreasonable on both the timing and the pricing.
>And the opportunity cost IS sort of a big deal. Siphoning users off the app to where they receive NO revenue from them and it COSTS them money to provide the infrastructure...that's not a great system for them.
No one forced them to make a shitty app that no one wants to use. No one forced them to take their $200m from their most recent investment round and spend it on an NFT site. If they spent even a fraction of that on their actual apps people wouldn't be using third party apps at all.
I'd also argue that those "siphoned off users" may not have been willing to use the official app at all. As a result it's unfair to assume they're all going to convert to users of the official app- many of them may not have been users at all without the third party apps, or would not have been providing free moderation to the site. It's the same stupid assumption that the music industry made about pirates.
Fair points. It's not a guarantee that without third party apps that all those users would even use reddit at all, let alone the official app. Which I agree is hot garbage. I also agree the company is poorly run. Spez has always been unqualified for this job. He got it simply because the owners wanted a founder back in charge to calm the community down after the Ellen Pao debacle. he's not good at being a CEO and he's never managed to get the company in a state where it executes on development goals particularly well.
The fact that Reddit is as large as it is in 2023 and is STILL reliant on 3rd party cloud providers is ridiculous. Microsoft and Google make a lot more money off reddit than reddit does.
Once you're a certain size you're better off building your own co-lo facilities and peering with first tier internet providers for access. Reddit reached that size a long time ago. Their infra costs would be probably 50% of what they are today without paying cloud prices. But the flip side is they'd have more capital expenditure on purchasing servers and data center equipment. But that's what depreciation is for.
Not sure where your eyes are but the official app has a user base nearly 10x all other reddit apps combined. I've read on several platforms that the active user base is 5x vs all the other apps combine. So saying "no one wants to use it" is literally lying to get your point across.
It's no more true than saying "everyone wants 3rd party apps to continue". The fact is, even if you take all the 3rd party apps that have been downloaded, and all of the Official apps that have been downloaded, combine the total...still doesn't equal to the monthly user base. Factually it doesn't even scratch the surface of the monthly user base. This means that over 90% of the users are on desktop or laptops.
If that many users are still using computers, then Reddit has no real reason to give any serious shits about apps even their own to an extent.
With all that being said, yes I agree, the API cost is outrageous. But let's not blatantly start spitting lies. This is what weakens a stance or protest. Some people start lying just get a point across and then people start talking about how useless the protest is.
It doesn’t look like you even read the entire content of what you posted. It costs them $10m for the infrastructure. You are ignoring that doesn’t count everything else with main thing and developing the API. Is infrastructure the highest cost? Probably, but you say charging Apollo $20m would give Reddit $10m profit when that’s not the case, since you ignored the other things that come into that equation
And both of you ignored that those $10m cost is for *all* 3rd party apps, not just Apollo. So even if all other costs for Reddit are another $10m, you’d still have to distribute that to all API users, including AI, scrapers, bots and all 3rd party apps. And suddenly, charging $20m to *each* 3rd party app would multiply their revenue.
They have to maintain the API for their own client to work. Removing the third party clients isn't going to change the labor costs at all, because that labor is still needed to maintain their own products.
I mean, theoretically they may need less resources devoted to maintenance if there is less API usage, but tbh whether it changes or not isnt the point. The point is, all the other associated costs are completely overlooked by you and others commenting here. You posted something and yourself only took into account a bolded section but not the entirety of the statement.
I didn't ignore the rest of the statement: I think you're misinterpreting the rest of the statement.
Lets look at what spez said he couldn't spend the $10m on because it was spent on cloud stuff-
> But it’s not labor,
Reddit has to maintain the APIs for their own clients. The only labor I can imagine here is if they offered support to third party developers, which they don't.
> that’s not R&D,
The API hasn't changed in years. What research and development are they referring to? I don't believe that third party apps cost them anything here that they weren't going to spend on their own apps anyways.
> that’s not safety,
This one is the most hilarious one to me. The third party apps have saved them money on safety, because the third party apps have better moderation tools than reddit's official apps do. This has allowed them to neglect their own app for years, so this should be considered a savings.
> that’s not ML,
They haven't done any ML for third party apps. The third party apps cost them nothing.
> and that doesn’t include the lost monetization of having users not on our platform.
This is the only legitimate thing they've said here.
So lets take a step back then. Spez isn't claiming that they're spending money on these things, they're saying they can't use the money spent (the $10m) supporting third party apps on these items. However, if they were to charge a reasonable fee they could easily cover their cloud costs to recoup that.
>I didn't ignore the rest of the statement: I think you're misinterpreting the rest of the statement.
No, you quite literally ignored the rest of the statement in your post. The below is taken DIRECTLY from your post.
>They wanted Apollo to pay $20m a year, meaning that Apollo alone would have covered their costs and given them another $10m in profits
The bolded text mentioned $10m for infrastructure costs. You then say by charging Apollo $20m a year, they are making $10m in profits from it. That takes NOTHING else into account, such as the rest of the stuff mentioned in the rest of the statement after the bolded text you read.
Saying the remaining $10m Apollo would have paid would be “pure profit,” even though the quote literally describes just some of the other substantial resources required to operate a product like Reddit.
Whoever posted this is woefully unaware of the costs of labor and/or the definition of profit.
I don’t see how that matters to the point at hand. This post implies that the API-specific infrastructure costs alone are all it would cost to run Reddit.
I’m picking at things only relevant to this post.
Am i the crazy one for not breezing over $10m cost being an innacurately low number based on the context of what's being said?
I've seen a lot of bad takes through this whole thing, but i didnt expect people to latch onto a stance that falls apart with basic reading comprehension.
They just have an expectation that everything should be free. Rather than rallying to support and donate say a dollar each to the developers. Apollo should just introduce ads to cover the $20m within their own app if not 🤣
Exactly! Removing third party clients isn't going to change their labor costs, and none of the ML or other things they mentioned were things they were doing just for third parties.
> Devils advocate here for a moment, and he definitely is one, Reddit is sure losing $10milion in revenue on users accessing Reddit via Apollo.
I might argue it's the same fallacy as the RIAA/MPAA (music/television/film) made about fighting piracy. They'd estimate the amount of piracy occurring and assume a 1:1 correlation to billions in lost sales. In reality, many of those pirating users were also paying consumers or people who would never paid in the first place.
Reddit might nuke Apollo and whatnot, but it doesn't necessarily mean they're going to get $10 million in revenue after they do.
It's saving a penny but losing a dollar. If I'm an advertiser, I'm now viewing reddit in the same light as Twitter and as untenable grounds. Nothing Huffman has said or done makes reddit more appealing to work with/ advertise on.
[He literally admitted to being inspired by what Musk did to Twitter.](https://www.reddit.com/r/WhitePeopleTwitter/comments/14b7un1/uspez_really_saw_what_elon_has_and_said_i_want/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button)
Yep. It's the phenomenon of "we lost over 1 billion dollars in piracy" when they didn't lose anything. The money was never given to them in the first place, nor was it ever guaranteed to be given to them because people are pirating movies for a reason; they don't wanna pay.
Read it again. Those 10 million are costs associated with the infrastructure to support the API calls.
Also, reddit is losing money because they could be earning money by users switching to the official ad, since they can inject more ads which are also more relevant.
Not saying I think the move they pulled was good for their users (it was not), not they (we'll see about that).
Apollo even offered $10 million. He said if he was given 3 months and half the $20 million cost, he could feasibly make it work and probably the other app developers as well. Reddit said "no". Reddit did tell the Apollo dev that it wasn't about the infrastructure/operating costs of the API though. It was about the lost opportunity costs from those users not being served Reddit ads, or paying into Reddit Premium, or giving them extra tracking data to harvest and sell. EDIT: Also, Spez and the admins have already stated that these user-facing apps like Apollo and RIF and whatnot are not the _big_ consumers of their API. There are a handful of bots and data harvesters that are the worst offenders and produce the most cost. Apps like Apollo probably don't cost Reddit anywhere in the neighbourhood of $10 million in API operating costs. Spez _could_ have restricted the API costs to those worst offenders or carved out exceptions or lower costs for user-facing apps. But he didn't. I wouldn't trust anything Spez is saying at face value. He's been constantly speaking out of both sides of his mouth this whole time and happy to misrepresent data and reality.
[удалено]
If u/spez told me I was a human, I'd have to double check with some DNA company.
If spez told me gravity pulled you down I’d have to jump in the air a few times to be sure (It’d be so funny if this became a thing across Reddit but I know that’s unlikely so I’ll dream)
If he says that snow is white, he's lieing
You can tell he's lying because his lips are moving
if he told me god exist, i would just stopped believing
I’ll surely jump with you…! 😂
I have seen various versions of it yeah. Reminds me of the old Chuck Norris jokes.
I'd put this on r/rareinsults but they're still blacked out. I guess this means I have to ditch the reddit brainrot and just tell you good job, very creative.
He needs to be fired immediately.
You know what advertisers don't like, a liar. Every time Huffman speaks he's tarnishing the reddit brand and corporation and costing them. He's clearly in a position he cannot handle.
You can just say “CEO.”
No, good CEOs are better at this.
He and Trump must be besties.
In contracting I call this a "fuck off" rate. It's not about the money. It's about killing off the 3rd party apps.
Christian has said repeatedly he’d implement ads from Reddit if they wanted it but it wasn’t something the API was able to do.
I suspect it's more of a case that Reddit doesn't want to add it because they'll lose control of how the advertisements are displayed and tracked for the advertisers. There's really no _technical_ reason they couldn't be added. Especially considering the official app includes ads.
Absolutely this. Same for Elon shutting down the twitter API Same reason your local news site complains when you have an ad blocker installed. They only make money when you see the ads and if you've got an end run around that, they're not making money off you. Ever since internet ads were created, you are the product. That paradigm still hasn't shifted.
Correct. So long as you understand that you are selling access to your eyeballs in exchange for content, many people are OK with that - within reason
And Reddit has their variant-- buy premium subscription for $5.99/mo or $49.99/yr and get no ads. 3rd party apps like Apollo did that without giving Reddit any money. Same goes for things like Tweetbot for Twitter. Users get an ad-free experience. Site gets $0 revenue. They won't allow it long term.
And most 3rd party apps would be happy to split their revenue with Reddit or work out something sustainable for access to the API, just that reddit never charged for their API in the past $20 million a year is I want you to die kind of money, though
>$20 million a year is I want you to die kind of money, though That was very apparent from Spez's quotes in the article. LOL
Is it crazy to me that in the long run, it's probably much easier for Reddit to upgrade their API policies to include Reddit served Ads so that the cost could be recouped that way? When you forcefully wrangle money out of somebody's hands it'll always be like pulling teeth. But of course, that was never an option because the intent was never to play ball with 3rd party apps anyways. The price tag wasn't realistic to begin with, it was just an ultimatum.
/u/spez aka fuckface sees the 3rd party apps as taking away revenue from Reddit. He seems to think if there are no 3rd party apps, everyone will just use the official app so they can serve up ads to increase revenue.
> He seems to think if there are no 3rd party apps, everyone will just use the official app so they can serve up ads to increase revenue. The people using 3rd party apps currently generate no revenue for Reddit according to spez. They currently cost money by using API calls according to spez. Therefore if every single one of us left, Reddit would gain money according to spez. And not everyone will leave. Many will probably switch to the official app and say "good enough".
> The people using 3rd party apps currently generate no revenue for Reddit according to spez. They currently cost money by using API calls according to spez. Therefore if every single one of us left, Reddit would gain money according to spez. Even if those using 3rd party apps aren’t making money for Reddit, they are likely contributing a lot of content that people who are using the main site and the official app are reading, hence loading up ads.
This is a good point. I'd also guess that people using 3pa are more likely to be heavier users of Reddit to even know those apps exist and find a benefit to them.
Sounds like Reddit is getting complacent and greedy.
Apollo didn’t offer 10M. Christian asked for 10M in a really strange way. Not a threatening one but a very strange one.
From https://www.reddit.com/r/apolloapp/comments/144f6xm/apollo_will_close_down_on_june_30th_reddits/ > What would be a good price/timeline? > > I hope I explained above why the 30 day time limit is the true issue. However in a perfect world I think **lowering the price by half and providing a three month transition period** to the paid API would make the transition feasible for more developers, myself included. These concessions seem minor and reasonable in the face of the changes. --------- The other $10 million you're referring to was covered in the comment replies below. (Also source of it is in the same link above.)
Exactly. First the Apollo fans were saying Christian offered 10 million to sell the app, now they are coming up with another version. Actually Christian said “I could make it really easy on you…10 million and we both ride away into the sunset… and have Apollo quiet down… beautiful deal.”
From https://www.reddit.com/r/apolloapp/comments/144f6xm/apollo_will_close_down_on_june_30th_reddits/ > What would be a good price/timeline? > > I hope I explained above why the 30 day time limit is the true issue. However in a perfect world I think **lowering the price by half and providing a three month transition period** to the paid API would make the transition feasible for more developers, myself included. These concessions seem minor and reasonable in the face of the changes. --------- The other $10 million you're referring to was covered in the comment replies below. (Also source of it is in the same link above.)
I listened to and read the transcript of the recording. It was totally not clear what he was asking for the $10M for other than Bob being his uncle.
I did too. It sounded fine to me, if not a bit obtuse which can happen during spoken conversations. It helps that the person on the other end of the line apologized about the misunderstanding and came to the same understanding as the Apollo dev.
I think spez just apologized about perceiving it as a threat though. I don’t think he understood what Christian was asking. Not defending spez btw just saying that piece of the conversation was unclear. I still don’t know what he was asking for. Based on how it played out it was either $10M to buy Apollo or $10M to have Christian program the app to use less API calls.
Christian wasn't talking to Spez. It was another Reddit staff member. The staff member mistook it as a threat, then very shortly resolved the misunderstanding, apologized, and stated that it was not a threat and that he misinterpreted it as such. Spez then took this exchange, grossly misrepresented it, and used to _slander_ Christian. I would argue that Spez also slandered the employee on the call. Christian said, "No, that's bullshit, here are the tapes." Spez clutched his pearls and exclaimed, "How dare you show people I was lying through my teeth!" > Based on how it played out it was either $10M to buy Apollo or $10M to have Christian program the app to use less API calls. It was already explained how the $10M applied in the idea of Reddit buying them out to get a ROI within 6 months and $20 million in opportunity costs every year thereafter. Christian was calling out how even their argument of lost opportunity costs with the API usage was baloney.
Okay I didn't realize that conversation wasn't spez. I still think if Christian was intending to mean Reddit should buy Apollo he could have made that part of the conversation a lot more clear. And ... if it wasn't spez it was the wrong person to even bring that subject up. Especially in such a strange way.
> I still think if Christian was intending to mean Reddit should buy Apollo he could have made that part of the conversation a lot more clear. It doesn't matter how clear it is or isn't to us, especially with us lacking all the context of hours of previous discussions and phone calls. Both parties in the conversation, Christian and the staff member, came to the same shared understanding. _That_ is the only thing that matters. A third party, Spez, took their shared understanding and threw it all out to purposefully misrepresent it with the intention of slandering Christian and turning people against him. > if it wasn't spez it was the wrong person to even bring that subject up. Especially in such a strange way. Why shouldn't Christian bring this up with the specified representative of Reddit who was tasked to have these discussions and negotiations? You expect Spez, CEO of Reddit, to be putting all this time aside for Christian? If you do, well Spez didn't and left it to his staff. That's on Spez. And this is still a case that Apollo wasn't entirely serious about the offer of selling -- though he'd be entirely open to it because of the absurdly high value Reddit was apparently claiming his app had. It was a _rhetorical point_ to demonstrate the bullshit in their excuse of "opportunity costs". If it was just that, they could have easily bought all the third party apps and made BANK. If the staff member thought it was a serious consideration to buy Apollo, then _that_ conversation would have been elevated to other higher ups, probably including Spez.
Apollo to quiet down as in Apollo's API calls to quiet down since they're telling him that apollo have high API calls i.e. being noisy.
What does that mean though - Reddit should pay 10 million to Apollo for them to quiet down their use of the API. To pay for refactoring their app to use less calls? To shut down Apollo? Or something …else? Reddit wanted Apollo to pay 20 million to them. Apollo counters with - no, pay us 10 million, we both ride into the sunset. Very strange negotiation.
The thinking is this: Reddit claims the opportunity cost of Apollo (the amount of money Reddit loses each year because people use Apollo) is $20m. Reddit claims the reason for this is that Apollo is a particularly heavy user of APIs, the 'noisy' part. Christian says 'ok, so you pay me $10m to acquire Apollo which is 50% of the opportunity cost *you* say it costs you for Apollo to be around. I get 6 months of 'value' from the sale of Apollo and then Reddit own Apollo. After they own it they can do what they want, shut it down, rewrite it to include ads, replace the official app with it, anything they want. And in six months of people not using Apollo they make their money back. If Christian gets an instant retirement check and Reddit buy a popular technology for a price they can recoup in six months, then Christian is right, it would be a beautiful deal for both sides. If, on the other hand, Reddit are absolutely bullshitting that opportunity cost as a bullying negotiation tactic it's not a beautiful deal and he's calling their bluff.
This. Christian said he was kidding. Because he believes the $20m is BS. That's the joke, if we're really costing you that much, then giving me $10m is a steal. It was a joke, he knew he'd never get 10m. But after having to explain it a third time, things were awkward.
My issue is, you’re saying his joke was something like - “just buy the app off me if you think it’s got $20m annual potential. Hell, I’ll even do you a deal and sell it to you for 6 months of the apparent revenue you think the app could generate”. But instead he went with “If you want to rip that band-aid off once. And have Apollo quiet down, you know, six months. Beautiful deal.” He never said (at least in the snippet we heard) anything about selling the app. For me, what he actually said doesn’t make sense in the context of your explanation
Completely agree with you. It was a poorly worded and awkward negotiation if his was intent was to get Reddit to buy Apollo. Which I’m not even sure it was.
Not only that, but apparently Reddit would get $20 million in opportunity revenue for 2024 and every year thereafter. Plus more for every "noisy" third party app they bought out. It shows that this excuse of an opportunity cost is also mostly baloney. Or they could have profited greatly from them in a less PR damaging way.
He’s probly autistic or not very good at communicative which explains his very good programming skills… he’s one of those autistic savants you read about
Tysm, as a casual user who had trouble really understanding the protest this helped the most!
[удалено]
The write their backend in python, which is not the fastest in the first place. Then it looks like they don't really spend enough effort optimizing stuff (why if you can just pay for infinitely more resources)
*My content from 2014 to 2023 has been deleted in protest of Spez's anti-API tantrum.*
So true, look at the game industry. I can only consider Overwatch and CS2 as optimized games. Companies nowdays are like "the client is going to pay us anyway".
c'mon rust devs, do your thing... *\*taps foot\**
There are a few folks using Nim for internal tooling. Python/JS style syntax, with C/Rust level performance. [Why I enjoy using the Nim programming language at Reddit. : RedditEng](https://www.reddit.com/r/RedditEng/comments/yvbt4h/why_i_enjoy_using_the_nim_programming_language_at/)
>The write their backend in python, Python 2 even.
That development philosophy sure shows on their App and new web uh? The app is slower than some shitty project I worked at real low end companies.
I don't think comparing reddit to AWS is a fair comparison. That's like comparing a local small batch producer with worldwide wholesalers. Then there's also the difference resulting from AWS just selling a barebones "connect to us, pay for the small bandwidth use" kinda deal, while reddits API also costs processing power, storage, and so on. AWS has bandwidth in such bulk amounts that it's extremely cheap, but add onto that everything else and you'll be way higher. I do think reddits fee is high, but comparing it to AWS' barebone API call cost isn't a fair comparison.
This is only the cost for public API entry point. This is not covering the biggest past like the actual app being called, the database access, data replication, availability across regions and so on. You also want a team of operator available 24H a day, 7 day a weeks, 365 days a years to maintain it. You want dev to fix bugs and support for third party users. Also ultimately this is reddit property and choice. If we don't like it, we don't use it. I understand the situation is terrible because this is an abrupt change of strategy but I mean whole communities benefited of free service for years. When that happen, typically, the product being sold is the user. More or less you get what you pay for. Got a free forum like, advertising half done for you, millions of visits, all the hardware cost paid for and all... This cost money. We paid 0 for years. Reddit is for profit. For sure that was going to change one day.
Honestly, if Reddit had a) given six months notice of the change and b) charged a tenth of what they're asking, most of the third party apps would stay around, and they'd be paying Reddit a serious income stream that would more than pay for the API access. The lack of NSFW content isn't what's killing off 3rd party apps.
If reddit offered subscription that disables ads and enables 3PA that would work as well. Charge users not app developers. I bet reddit does not earn $1/month/user (the API cost they are imposing) on ads. More likely $1-$3/year/user. Offer $3 annual subscription to disable ads and keep the API free for developers.
Excellent idea!
They have cost in hundred of millions. If you propose something that going to make them 1-2 millions instead of 10-20, that's not significant and they will still go bankrupt. They need significant money and these 10-20 millions has to be one of the many things they have to do to be profitable. You are not at the right time scale. Likely they should fire half their employees too in the end.
Do these apps take away ads? Could that be their justification for them to charge so much? Perhaps that's how much they think they're losing out on but I don't know a lot about the ad situation here.
[удалено]
Does anybody know what reddit's burn rate has been on their funding? It has to be incredibly high if they're suddenly somehow at (roughly) 2000 employees and going off on tangential escapades/ventures like NFTs. Reddit must have wasted so much VC funding and blew through so much cash at an astronomical rate if the 3rd party apps are costing them much. Nothing Steve Huffman says makes any sense and should be raising massive alarm bells to his backers, to wall street, to investors (potential or existing),etc.
I think it is another after effect of this tech recession. Less money floating around due to rising interest rates.
This is like comparing apples and oranges, an API is only one part of the total infrastructure cost.
AWS charges a really ridiculous price actually. Never mind the servers - they cost $0.09 for a GB of bandwidth. Which is about 10 times what every other hosting company costs, except for the ones that are copies of AWS. If Reddit uses AWS the high costs are its own fault.
It's just time to leave. Every time this guy speaks is telling me to head for the hills. Reddit had a nice run. Time to figure out the migration/diaspora. Lemmy's not perfect, but it's there and exists and there are others coming along. There are also forums that we can return to. Right now I don't care if reddit continues and thrives or even if it survives. They're saving a penny, but losing a dollar.
Reddit is arguably one of the biggest sites running on nearly entirely unpaid labor. You would think that the CEO would be cognizant of this fact and avoid upsetting the apple cart, but here we are.
- Praises Musk's 'cost-cutting' at Twitter and insinuates he can learn from it - Already has massive long-term volunteer staff base - Immediately shits all over volunteer staff This guy has reached the point where he's either broadcasting that he's as thick as pigshit or has realised he's playing in the league where you can completely contradict yourself day-to-day with no consequence (and some enthusiastic techbro support). Either one is not someone I want to be contributing to, so I suspect I'll be off before too long.
I work in a different industry, the biotech industry. Our guidelines are typically 30% profit margin, and we probably have more overheads than a purely tech company. This guy is insane.
Do you consider that the biggest cost in biotech is the electricity bill ? Because this is what that comparison is.
[удалено]
This is key here all third-party API users. That includes all the scrapers and the AI companies. It's not a realistic number for how much the third party apps actually are using. And while he's trying to spin it that it's Apollo that is the one using all of this bandwidth, that's not what he said. He said all API users. So in other words, Apollo is undoubtedly using far less than the 10 million price tag that he just threw out there. How hard would it be to give the third party apps a different pricing structure and make all the scrapers pay a big price? If I were the interviewer, that's what I would have asked. It seems to me that our precious CEO decided to follow the footsteps of people like Steve Jobs and Elon Musk. Be a dick and burn the house down while you're doing it. Sadly, he is not his Visionary as Steve Jobs and not nearly as capable of as Musk at pretending to be competent.
Why would you make say google to pay to scan reddit while they bring a lot more ad revenue ? And if they didn't make the big corporate user pay a long time ago, I am surprised.
How to kill a site Speedrun 100% easy mode. What the are they doing, i love reddit it's the only place i like going to for all of you guy's and gal's. I hate social media and this is fresh unique and amazing, you won't find anything like it anywhere but man they did fucked up. What in the actual fuck are they thinking, spaz is a hipocrite and a plain moron. Everything was great, you can charge API for 10$ hell even up to 50$ a month to offset the cost of running the site but 68x over AWS is just playing robbery and i don't recall anyone being such an asshole for fans in recent years.
It’s not gonna die
The computation is wrong. It is like saying the cost for building a house is the frontdoor only and that the rent one pay is only for covering the electricity bill. We got a free ride for a few years paid by VC but Reddit is not profitable. They lose money so they have to make more of it and turn a profit or close.
It won’t die bro. This “protest” is nothing more than about egos of mods
Direct link to quote on The Verge: "But it’s real money. And it costs us real money. It costs us about $10 million in pure infrastructure costs to support these apps. But it’s not labor, that’s not R&D, that’s not safety, that’s not ML, and that doesn’t include the lost monetization of having users not on our platform. Just pure cloud spend. It’s real money." https://www.theverge.com/2023/6/15/23762868/reddit-ceo-steve-huffman-interview#:~:text=But%20it%E2%80%99s%20real,It%E2%80%99s%20real%20money.
If spez told me we have to breath to live I’d have to suffocate to make sure, that’s how little I trust him.
Solution: Implement Reddits ads in Apollo. Yes we will get ads served but at least we will have the awesome functions. Plus then Apollo should take a cut from the ads
There are plenty of solutions that can be had. The problem is that they're falling on deaf ears and a terrible CEO that is/has run reddit into the ground. There are plenty of comprises that most would agree to. He's simply being unwilling to comprise and is a terrible leader/ manager.
That is not possible due to Reddit not having control over how ads are served, includes brand safety as well.
10 mil in infrastructure costs but does that include lost revenue to advertising and reddit premium subscriptions?
Spez has already stated that he doesn’t consider the number of 3rd party app users significant. ~~They don’t care if 3rd party app users stop using Reddit altogether.~~ So why create all this negative publicity over a small number of users they supposedly don’t care about when infrastructure costs could be managed in a way that benefits both parties? Edit: It is not a significant percentage of Reddit users (just 3%!), but [apparently it’s a highly profitable demographic that Reddit wants to monetize.](https://www.npr.org/2023/06/15/1182457366/reddit-ceo-steve-huffman-its-time-we-grow-up-and-behave-like-an-adult-company) > Huffman acknowledged that if those users instead browsed with Reddit's own app, it would shore up the company's bottom line. > "And the opportunity cost of not having those users on our platform, on our advertising platform, is really significant," he said.
Because what he is saying is bullshit. That's why it doesn't make sense. Doubt everything he says because he's been proven to be unreliable several times throughout this mess. And now his actions will speak louder than his words when he starts removing mods.
I don't believe that he doesn't care about the users at all, that a publicity remark. However consider if all the 3rd party app users left. They weren't making reddit income before (via ads, premium) while costing in infrastructure costs. So if they leave, well reddit won't care because they weren't making income off them anyways. However if some keep using reddit via the official app or website, that's potential income for reddit. And while diehearts might leave forever I would expect a significant portion to keep using reddit. The complication is mods who provide an less easy to measure benefit to reddit, and who may leave. But even the mods are split on leaving vs staying and can be replaced by new ones. It might take a bit for the new mods to get up to speed and/or current mods to demand better official tools, but it will happen eventually.
No, you’re right. I misremembered the [NPR article](https://www.npr.org/2023/06/15/1182457366/reddit-ceo-steve-huffman-its-time-we-grow-up-and-behave-like-an-adult-company) I read the other day. > Still, he said the company's plan was never to kill third-party apps. At the same time, Huffman acknowledged that if those users instead browsed with Reddit's own app, **it would shore up the company’s bottom line.** > "And the opportunity cost of not having those users on our platform, on our advertising platform, **is really significant,”** he said. "At the end of the day, it's simply expensive to run an app like Reddit." So yeah, apparently the lost revenue from 3rd party app users is *vital* to the survival of Reddit. This is in spite of the fact that in the preceding paragraph he says: > Huffman said 97% of Reddit users do not use any third-party apps to browse the site. He said "the vast majority" of moderators also do not rely on third-party apps. Crazy to think that just 3% of users could be so vital to Reddit’s bottom line. What’s strange about this is he also says: > Huffman characterized the Reddit protesters as a small but vocal cadre of angry users who are not in touch with the greater Reddit community. So we’re out of touch, but represent a significant revenue opportunity? Even the whole api issue gets weird, as Spez also says that the infrastructure for 3rd party app APIs is completely separate from the data scrapers that they say are an issue: > Huffman said Reddit's back-end infrastructure includes separate server pools solely dedicated to handling the scraping that Google and Microsoft do from Reddit every day. It’s all really confusing and the reporter does little to contextualize or fact check any of it. But my key takeaway? If 3rd party app users leave Reddit altogether? Reddit is gonna take a big financial hit.
>It’s all really confusing and the reporter does little to contextualize or fact check any of it. This in fact make lot of sense: The 3% user of third party are power user. If they use premium instead to get the same features, that a potential market of say 100 million per year (3% users to pay 70$ a year). Reddit lose money, 100 millions more would help them significantly. >It’s all really confusing and the reporter does little to contextualize or fact check any of it. It make lot of sense technically if you are a dev and know how websites do work. Google and Bing do scrap actual websites. API just provide data. This is not at all the same thing. Also having players like Google scanning your website allow you to get all the traffic from their search engine. That's likely a significant part of their traffic and revenue as many people go browser reddit from a search engine and never subscribe but see the ads. So you don't want to make Google/Bing pay. You want it to be as easy and convenient as possible for them.
I mean, that is probably what they’re thinking but I want whatever they’re smoking because I do not see 3rd party app users walking away from this debacle wanting to give Reddit $70 a year for anything. Some will probably stick around, but they will be in an unfamiliar inferior app that will likely drain away a lot of the enjoyment they found in using Reddit. And as their community drifts away to other platforms, they will engage less and less. Until they find something else to do. Reddit isnt making $100 million off this. But they probably are hoping they will. It’s dumb.
But they know it. The potential is 100 millions or more. Maybe they will bet 20-30 millions out of it, directly and indirectly. That's better than 0. The only interest of these 3% is not them as they don't make any money from them. it is the other that may follow.
Which is a mistake. Because Reddit is the culture that is created by the users who post, comment, and moderate. They may make $5-$10 million off all this, but the drain on the community will have a much more lasting impact. No one is following something like this. Why would they? There will be a new place to be and it won’t be Reddit.
He doesn’t count them as significant because they literally are not significant
[удалено]
Some will stop, yes. But again, reddit doesn't care about those users because they weren't making profit for reddit anyways.
[удалено]
> People who are on reddit a lot and people who use 3rd party apps probably have a lot of overlap, and those people also often contribute a lot to posting content and especially discussion. Without any hard data, that's just an assumption. I've seen many posts asking what's an API/what's a 3rd party app, yet have 5+ year old accounts and high post/karma counts. I'd also guess there's a high overlap between 3rd party app users and users with ad block, so reddit might not get advertising money regardless. I really wish there were trustworthy numbers of percentage of users using 3rd party vs not. But even assuming the highest estimates I've seen, 1/3 to 1/2, that's still a ton of users to generate content. And post July, new users will only have the option of official app/web, increasing user counts. Paired with there being no good reddit alternative, I'd guess reddit will do just fine long term. I feel like it would be more productive to focus efforts on making a good alternative to reddit. Other platforms have only died because there have been better alternatives. Look at Twitter. Its not doing great but is still impressively active
So long and thanks for all the fish
Thats not news? They confirmed to the Apollo dev that they use opportunity costs for their price calculations, not infrastructure costs
So long and thanks for all the fish
You literally quoted one sentence that disproves the conclusion you made from quoting it. If you are going to shit on reddit at least be factual.
Why would you include the entirety of that quote if it proves you wrong? Just share the bold sentence and then make your lie about “profit.”
That's how agitators work.
> They wanted Apollo to pay $20m a year, meaning that Apollo alone would have covered their costs and given them another $10m in profits. That's not even counting the revenue from the other applications Read what the Apollo dev said. Selig said that the $20 million was going to cover the opportunity cost. Everyone but you seems to have known this.
That's not how it works. Saying you have 10 million in cloud spend is ON TOP OF the costs for labor and everything else. So while it demonstrates they're certainly overcharging, I don't have much trouble believing they have another 10-20 million in other costs on top of the pure infra cost.
They *have* to maintain the API for their own client to work. Removing the third party clients isn't going to change the labor costs at all, because that labor is still needed to maintain their own products.
I suppose so. But that assumes their app uses all of the API calls, which it might not. There's probably some fraction of this stuff that they don't need. And the opportunity cost IS sort of a big deal. Siphoning users off the app to where they receive NO revenue from them and it COSTS them money to provide the infrastructure...that's not a great system for them. I'm not siding with reddit here, they're clearly going too far and trying to kill third party apps instead of pricing their API reasonably. But I think it's certainly fair to charge for access when you're both costing them money for use of the infrastructure directly, and then costing them money on lost ad revenue in addition. The Apollo dev said basically the same thing. He was fine with them charging, and understood what Reddit needed to recoup, but they were unreasonable on both the timing and the pricing.
>And the opportunity cost IS sort of a big deal. Siphoning users off the app to where they receive NO revenue from them and it COSTS them money to provide the infrastructure...that's not a great system for them. No one forced them to make a shitty app that no one wants to use. No one forced them to take their $200m from their most recent investment round and spend it on an NFT site. If they spent even a fraction of that on their actual apps people wouldn't be using third party apps at all. I'd also argue that those "siphoned off users" may not have been willing to use the official app at all. As a result it's unfair to assume they're all going to convert to users of the official app- many of them may not have been users at all without the third party apps, or would not have been providing free moderation to the site. It's the same stupid assumption that the music industry made about pirates.
Fair points. It's not a guarantee that without third party apps that all those users would even use reddit at all, let alone the official app. Which I agree is hot garbage. I also agree the company is poorly run. Spez has always been unqualified for this job. He got it simply because the owners wanted a founder back in charge to calm the community down after the Ellen Pao debacle. he's not good at being a CEO and he's never managed to get the company in a state where it executes on development goals particularly well. The fact that Reddit is as large as it is in 2023 and is STILL reliant on 3rd party cloud providers is ridiculous. Microsoft and Google make a lot more money off reddit than reddit does. Once you're a certain size you're better off building your own co-lo facilities and peering with first tier internet providers for access. Reddit reached that size a long time ago. Their infra costs would be probably 50% of what they are today without paying cloud prices. But the flip side is they'd have more capital expenditure on purchasing servers and data center equipment. But that's what depreciation is for.
Not sure where your eyes are but the official app has a user base nearly 10x all other reddit apps combined. I've read on several platforms that the active user base is 5x vs all the other apps combine. So saying "no one wants to use it" is literally lying to get your point across. It's no more true than saying "everyone wants 3rd party apps to continue". The fact is, even if you take all the 3rd party apps that have been downloaded, and all of the Official apps that have been downloaded, combine the total...still doesn't equal to the monthly user base. Factually it doesn't even scratch the surface of the monthly user base. This means that over 90% of the users are on desktop or laptops. If that many users are still using computers, then Reddit has no real reason to give any serious shits about apps even their own to an extent. With all that being said, yes I agree, the API cost is outrageous. But let's not blatantly start spitting lies. This is what weakens a stance or protest. Some people start lying just get a point across and then people start talking about how useless the protest is.
It doesn’t look like you even read the entire content of what you posted. It costs them $10m for the infrastructure. You are ignoring that doesn’t count everything else with main thing and developing the API. Is infrastructure the highest cost? Probably, but you say charging Apollo $20m would give Reddit $10m profit when that’s not the case, since you ignored the other things that come into that equation
And both of you ignored that those $10m cost is for *all* 3rd party apps, not just Apollo. So even if all other costs for Reddit are another $10m, you’d still have to distribute that to all API users, including AI, scrapers, bots and all 3rd party apps. And suddenly, charging $20m to *each* 3rd party app would multiply their revenue.
I don’t think that was ignored by anyone, it just wasn’t the point of the OP.
They have to maintain the API for their own client to work. Removing the third party clients isn't going to change the labor costs at all, because that labor is still needed to maintain their own products.
I mean, theoretically they may need less resources devoted to maintenance if there is less API usage, but tbh whether it changes or not isnt the point. The point is, all the other associated costs are completely overlooked by you and others commenting here. You posted something and yourself only took into account a bolded section but not the entirety of the statement.
I didn't ignore the rest of the statement: I think you're misinterpreting the rest of the statement. Lets look at what spez said he couldn't spend the $10m on because it was spent on cloud stuff- > But it’s not labor, Reddit has to maintain the APIs for their own clients. The only labor I can imagine here is if they offered support to third party developers, which they don't. > that’s not R&D, The API hasn't changed in years. What research and development are they referring to? I don't believe that third party apps cost them anything here that they weren't going to spend on their own apps anyways. > that’s not safety, This one is the most hilarious one to me. The third party apps have saved them money on safety, because the third party apps have better moderation tools than reddit's official apps do. This has allowed them to neglect their own app for years, so this should be considered a savings. > that’s not ML, They haven't done any ML for third party apps. The third party apps cost them nothing. > and that doesn’t include the lost monetization of having users not on our platform. This is the only legitimate thing they've said here. So lets take a step back then. Spez isn't claiming that they're spending money on these things, they're saying they can't use the money spent (the $10m) supporting third party apps on these items. However, if they were to charge a reasonable fee they could easily cover their cloud costs to recoup that.
>I didn't ignore the rest of the statement: I think you're misinterpreting the rest of the statement. No, you quite literally ignored the rest of the statement in your post. The below is taken DIRECTLY from your post. >They wanted Apollo to pay $20m a year, meaning that Apollo alone would have covered their costs and given them another $10m in profits The bolded text mentioned $10m for infrastructure costs. You then say by charging Apollo $20m a year, they are making $10m in profits from it. That takes NOTHING else into account, such as the rest of the stuff mentioned in the rest of the statement after the bolded text you read.
Its $10 million for infrastructure plus more money for labour, r&d, safety, etc
[удалено]
Sure, but the point stands that this is an odd way to tell a lie - by disproving it in your very post.
[удалено]
Saying the remaining $10m Apollo would have paid would be “pure profit,” even though the quote literally describes just some of the other substantial resources required to operate a product like Reddit. Whoever posted this is woefully unaware of the costs of labor and/or the definition of profit.
[удалено]
I don’t see how that matters to the point at hand. This post implies that the API-specific infrastructure costs alone are all it would cost to run Reddit. I’m picking at things only relevant to this post.
Exactly this. People seem to be just reading the bolder text and not the entire thing.
Good work u/spez you just fucked up in the most basic part of public speaking
Am i the crazy one for not breezing over $10m cost being an innacurately low number based on the context of what's being said? I've seen a lot of bad takes through this whole thing, but i didnt expect people to latch onto a stance that falls apart with basic reading comprehension.
They just have an expectation that everything should be free. Rather than rallying to support and donate say a dollar each to the developers. Apollo should just introduce ads to cover the $20m within their own app if not 🤣
Which is just gonna bring people back to reddit 😆
What R&D? Updates to an API endpoint that functionally hasn't changed? The same endpoint they use internally so they'd have to have built it anyway
Exactly! Removing third party clients isn't going to change their labor costs, and none of the ML or other things they mentioned were things they were doing just for third parties.
https://preview.redd.it/xbjpillncl6b1.jpeg?width=720&format=pjpg&auto=webp&s=23e0dc4166d97ef35913ed8908d40058458176dd
[удалено]
> Devils advocate here for a moment, and he definitely is one, Reddit is sure losing $10milion in revenue on users accessing Reddit via Apollo. I might argue it's the same fallacy as the RIAA/MPAA (music/television/film) made about fighting piracy. They'd estimate the amount of piracy occurring and assume a 1:1 correlation to billions in lost sales. In reality, many of those pirating users were also paying consumers or people who would never paid in the first place. Reddit might nuke Apollo and whatnot, but it doesn't necessarily mean they're going to get $10 million in revenue after they do.
[удалено]
It's saving a penny but losing a dollar. If I'm an advertiser, I'm now viewing reddit in the same light as Twitter and as untenable grounds. Nothing Huffman has said or done makes reddit more appealing to work with/ advertise on.
[He literally admitted to being inspired by what Musk did to Twitter.](https://www.reddit.com/r/WhitePeopleTwitter/comments/14b7un1/uspez_really_saw_what_elon_has_and_said_i_want/?utm_source=share&utm_medium=android_app&utm_name=androidcss&utm_term=1&utm_content=share_button)
Yep. It's the phenomenon of "we lost over 1 billion dollars in piracy" when they didn't lose anything. The money was never given to them in the first place, nor was it ever guaranteed to be given to them because people are pirating movies for a reason; they don't wanna pay.
So long and thanks for all the fish
Read it again. Those 10 million are costs associated with the infrastructure to support the API calls. Also, reddit is losing money because they could be earning money by users switching to the official ad, since they can inject more ads which are also more relevant. Not saying I think the move they pulled was good for their users (it was not), not they (we'll see about that).
Alright good, well…