> We can debate if the API fees are reasonable or not - but at the end of the day, Apollo chose a model that doesn't work unless Reddit continued to favor them and apps like them.
Reddit could simply treat them reasonably and things would be fine. There's no need for favoritism, they just need to stop being actively harmful. And part of that is the fees (they're not reasonable).
I have real sympathy for the developer of Apollo; at the same time it was such a huge and obvious risk to stake your entire business on the whims of another that I find it difficult to be 100% sympathetic.
It's like, I know this funded company that's doing a lot of work using intel SGX, if intel kill it, about 80 people lose the jobs and several million in VC goes up in smoke. It's insane to me that people are building businesses that can be killed by 3rd parties that they have no hope of influencing, and have no contracts with.
Another chapter of the internet drama concludes, I suppose. I wish them all the best and I'll be curious to see if reddit survives.
it was such a huge and obvious risk to stake your entire business on the whims of another
How is this different than any other business running (part of) their operations at a large cloud provider? Or a business having to renew their contract with the power company?
First being Reddit wouldn't have suddenly needed to stop supporting 3rd party apps for free - apps that only cost Reddit money and generate no income. If the API made Reddit money, instead of costing them money, there would be no need for a sudden change. The "suddenness" of this change is due, in no small part, to the cost of supporting basically free-loading 3rd party apps that consume resources but offer nothing in exchange.
Secondly, Apollo would have formed a business model that supported paying for API access, be it monthly subscriptions, freemium, etc. The current model of pay-once-use-forever is simply unsustainable (on an obvious level) - and the $12.99 annual subscription equally so. The Apollo model, as it was, required free API access.
Even if Apollo had been paying for API access all along, and Reddit decided to suddenly hike the prices - Apollo would have been in a better position to raise their own prices accordingly, and would have had a userbase more accepting of paying.
Paying for API access also compels the business to be more efficient in their calls. As it was, there was little-to-no incentive to operate large content caching on your own servers/services, etc. I have seen, but do not know their credibility, that Apollo was not very efficient in it's API calls and essentially hammered the API far more than was necessary. If you're not paying for it, why would you bother designing a more efficient system?
The API fees were inevitable. More are coming - be sure of that, as corporations tighten their figurative belts and look for ways to stop bleeding money.
The new thread, with the backend dump indicates it polled reddit every 6 seconds per user for new messages.
Maybe it's necessary, but that seems awfully tight timing. I have not reviewed any of the rest. My understanding is they tried to emulate push notifications...
$12.99 per year was priced with majority of the compute burden foisted upon Reddit. Apollo had servers too, but apparently took a lot of steps to minimize what they did in order to keep subscription prices super low.
$12.99 doesn't pay for an the free users that might not be hammering the API quite on the same level as the paid users, but hammered it non the less.
Specifically, the $12.99/year model is floating a ton of free users, in addition to paying for server resource usage. None of that $12.99 currently was allocated to paying Reddit, and we know Apollo calculated an approximate cost of $2.50 per user per month with the new API fees.
This $2.50 fee seems to align costs with what we can reasonably expect Reddit to earn per user on their platform. Reddit prices Premium membership at $5.99 monthly, which among other benefits removes all ads. $5.99 likely indicates a $2-3 profit when all ads are removed but user engagement remains constant.
The typical mildly engaged Reddit users probably easily spends an hour a day looking at ads via the app - so while the math may be fuzzy, it seems like Reddit possibly based their API pricing off something like this.
At a minimum, that is $2.50 x 12 = $30 of cost annually per user. This means all users need to pay Apollo $30 a year to break even on just Reddit fees, or some subset of users needs to pay a lot more than $30 a year to float a bunch of free users. Apollo has other expenses too (labor, servers, etc.).
Even if the API fees were reduced 80% down to $0.50 per user per month, that's still $6 annually per user - and Apollo has a lot of free users.
All of this is to say, the $12.99/year membership for Apollo was never going to work with any API fees.
Apollo seemed willing to make $12.99/year mandatory, pay some to Reddit, and cut the free users. That would have worked if Reddit started charging fees that were in line with either imgur's prices or their existing revenue numbers or a small multiple of them. Which is a range between 50 cents a year and 6 dollars a year.
I expect that the reddit premium price is far above the ad revenue from a mildly engaged user.
These things are different though, we must admit. Imgur used to be much bigger, but today hardly pulls the same audience volume that Reddit or Twitter do, for instance. I don't think Imgur could get away with API pricing like Twitter is, and Reddit will soon be.
> I expect that the reddit premium price is far above the ad revenue from a mildly engaged user.
Given the number of ads you see while browsing via the official app, I would peg it around $2 per user per month (which mostly aligns with my previous statements and estimates, as well as with API pricing), for someone that uses Reddit for 1-2 hours daily. I suspect, without evidence and can be wrong, that 1-2 hours daily is typical for a mildly engaged Reddit user.
Apollo doesn't need to drop free users - they need to get revenue from them. If not directly, then via ads. Although that seems antithetical to what Apollo was trying to create... but reality has come knocking.
Reddit could simply treat them reasonably and things would be fine. There's no need for favoritism, they just need to stop being actively harmful. And part of that is the fees (they're not reasonable).
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