If the primary complaint from Reddit is that they are losing revenue (no ad impressions/lack of user data and metrics gathering) why don't they just keep the API free/affordable but require developers to show ads and send usage metrics back to reddit?
I feel like it's incredibly short sighted for these companies to limit their APIs.
I for the life of me can't figure out why they are charging so much money for the API. They could do other things such as:
- Mandate as part of the TOS[0] that API users must display the ads in the application unless they pay a higher fee. I get alot of people use 3rd party apps to escape ads, but this wouldn't be the end of the world, it also allows the developer some discretion on how the ads can be formatted visually which could actually be a big win for Reddit in some ways. Make all this contingent on app review and auditing of the app.
- Work with the community to establish a more reasonable API fee. I'm sure everyone can find an agreement here somehow. All but the smallest players likely would find this agreeable.
- Only allow premium (and therefore ad free users) to use 3rd party apps. If they aren't a premium Reddit user they need to use the official client. This seems like the most pragmatic option to me, since those users would by pass ad revenue anyway.
Or just charge a reasonable price for API access that offsets the lost ad revenue. I think Reddit's ad revenue is something like $0.12/mo for an average user. If their API pricing averaged out to $0.15/month/user they would still be coming out ahead.
This would still hurt free third party apps, but I'm sure power users wouldn't mind paying $1/month to keep their favorite third party app going.
Instead, Reddit went for insane API pricing that app developers can't realistically afford at the subscription rates people are willing to pay.
Think this all the way through - why did Reddit do these things? To attract more users and to generate revenue. As the OP said, what are you going to do to solve Reddit's income problem? This isn't a technical issue, the technical piece is straightforward and well-known.
They can't really push for advertising until they eliminate 3rd party API access to the content. That or they have to start charging a usage fee.
Which is interesting. One option they do have is to charge the user for using Reddit via an API, not the apps using the API. If you want to access Reddit via a 3rd party app then you'll have to pay for it - say something on the order of $1.99 per month or $19.99 for the year. I imagine they must have explored that option, so it makes me wonder why they abandoned it.
If Reddit just cared about having the ads, they could have a free version of the API that includes the inline ads. Or otherwise work with API users to blend in the ads for user-facing clients. They could even kick back a share of that revenue to client makers.
As far as I know they're not doing any of that. To me it looks like the goal is to wall off all the user-generated content in an attempt to extract maximum dollars from it while intentionally excluding third parties.
why haven't they served ads via the API then? no one is stopping them.
they haven't done so because they have chosen not to. they are still choosing not to.
this is a calculated move by reddit to extract the highest amount of money possible from 3rd party app developers, and the users of these apps are who is going to suffer. reddit waited until API use was counted on by some portion of its users before they pulled this lever. it's predatory.
That would require the API to also include ad information. I think putting a sensible price on API access would make this a bit simpler, though (and allow for a paid ad-free experience as well). The core issue isn't so much paid API access as the price being so crazy high it can't possibly reflect how much reddit would normally be making from the users of these apps, so instead looks like it is aimed at just shutting down 3rd party apps entirely.
Too hard to display their ads if people access their content via API. I am not going to be surprised at all if reddit soon announces features leaving the API or completely getting rid of it.
But if the product is mostly monetized by ads, how can we expect that they let people use the API for free to create an alternative front end that gets rid of the ads? Reddit isn't Wikipedia.
That's an interesting way to frame the reddit debacle. Reddit could have mandated ads to be displayed as a part of their TOS of API usage, but just decided not to - for the clear reason of centralizing users to their app. It wasn't /just/ about the loss of revenue - it was also about the metrics they can collect on their platform which they could not do on others'.
I think the argument you want to make is not about Reddit's costs (which are low), but rather that should be charging some fraction of their lost revenue per-user for API use, since API users don't see ads. (Or else require app developers to show Reddit's own ads.) The issue is presumably that Reddit isn't profitable, and free app users are a major source of lost revenue (in addition to being a fairly small cost due to API use).
I think companies don't understand that APIs are not only a way to make money, but a way as well to control bot and scrapper. If Reddit APIs are too pricey, some people will run crazy expensive GET on entire pages to retrieve the content dynamically, and this will cost them more money than by letting clients use well designed APIs.
If they cant compete because the competition is freeloading on their APIs and community building efforts then it’s clear that they need to compensate the lost revenue by charging for the API usage. It seems Reddit has about 1.5b active monthly users, guess Reddit costs are about $0.3 per year per user. Would be fair to charge that for API usage. If the apps don’t like it, they’re free to create and host the community themselves, shouldn’t be too hard, as Reddit offers little value…
OK, so if each user were to use their own API key, reddit would still have the same costs but nowhere near the revenue, which speaks to a pricing structure aimed at the status quo where the API key is per developer instead. What's the betting that if apps switch to allowing users to specify their own API key that reddit actually allows most users to do this? The '90%' number is meaningless: apps which use the reddit API (or any API with a free tier) have an extremely long tail of niche uses which effectively no-one cares about.
The comment about API optimization is inane, apps already try to do this and bump up against the problem that reddit's API is atrocious (try actually getting all the comments in a comment chain once they get collapsed! if you actually want to succeed, even on a chain with only ~100 comments, you're gonna need around 30 API calls. Most apps don't bother to try, and the 'more comments' button is invariably broken).
Why should reddit have to freely support a third-party client that doesn't provide revenue for them?
The only reason is that the status quo is they have in the past freely supported these use cases, but it doesn't seem that unreasonable for commercial use API access to cost money.
I think the current pricing of Reddit's API isn't meant to recoup costs of maintaining the API, it's meant to kill 3rd party apps so people switch to the official app, which shows ads. It's not so much the cost of maintaining the API than it is the cost of missed ad revenue.
With all the Reddit users effectively quitting because of the 3rd party app stupidity, why didn't Reddit make ad delivery part of the terms of API usage or some other solution?
It's not like their costs go up because you access via the API vs the website/the official app.
Reddit stated that non-commercial apps keep free API. Reddit leadership doesn’t like that itself isn’t profitable and that others get to profit without paying anything, unjust enrichment. Reddit won’t touch any dev that’s too small, only the ones with large traffic matter. So probably only a handful or two. They can easily determine if anyone’s lying. And if anyone is suspected of lying, they can ask for audited financial statements and tax returns to keep API access. Would be pretty dum by any of them to lie to pay a smaller bill to risk getting your entire business wiped out.
I feel like it's incredibly short sighted for these companies to limit their APIs.
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