This move by reddit is so crazy I can't help but wonder if they're lighting all this user goodwill on fire in the hopes of improving their negotiating stance with folks using reddit for other things (like OpenAI and others training models), and that they're thinking they'll be able to change API pricing for Apollo and others once they have those big contracts locked in. It seems incredibly risky upfront, and with hindsight right now, totally untenable if that's the game they're playing.
IMO, he’s doing a pretty good job negotiating this as well. I know there’s a lot of words right now about broken promises and everyone not wanting to do business with anyone else, but from the outside to this uninformed observer it looks to me like this is a high stakes showdown that’s inching toward a commercial resolution.
There’s some dollar amount (representing either an exchange of value or avoided losses) where a compromise is going to make sense for everyone, and I think we’re going to see that before 6/30. My naive guess is that reddit acquires Apollo and runs that as a standalone business, but otherwise maintains the eye-wateringly high pricing on API usage.
Reddit told the Apollo developer the API pricing was more opportunity cost than actual cost. And many people suggested Reddit could make 3rd party access a subscription feature.
Apollo’s developer has stated multiple times that he has no problem with Reddit charging for API access.
The problem is that they are charging so much for it that it will kill all of the third party apps, which is likely one of reddits main goals with the change.
I haven’t seen many folks who are opposed to the API for apps being a paid service. Even the Apollo dev said they’re fine with paying. The problem is that Reddit’s pricing seems to be basically set high enough to effectively make developing third party apps impossible, and then their communication about the change has been dishonest.
The pricing makes it seem like Reddit wants to ban 3rd party clients without doing so outright.
I don't see it that way. That was just a proposed business transaction: reddit pays a fee, and in exchange, the Apollo dev doesn't comment publicly on the API changes. What's the threat, real or implied? The alternative is he goes public, which is only a problem for reddit if they know what they're doing is wrong.
The change isn't about Apollo exclusively, Reddit is going to start charging for their API. Basically all remotely adequate (which Reddit's 1st party tools aren't) moderation tools make extensive use of said API, so Reddit has basically decided "Hey, people who do most of the work necessary to keep our platform afloat for free, mind if you start paying us for the privilege?"
Totally agree that Reddit are being glorious ass-munching hentais here. I fucking hate all that Reddit has become as a company and as a product.
But also, dude just raise your prices. I read the whole announcement and truly don't understand why Apollo can't be $20/year. I don't know anybody who attributes a meaningful difference to $10/year and $20/year. I'm not a user but if I was faced with that type of price change and some language around needing to adjust pricing because Reddit is now charging for API access, I'd not give it a second thought.
It really really seems weird to want to die on this hill when you don't need to. Maybe it is the harbinger of the end for Reddit and we're just overdue. But I see no reason the founder of a popular Reddit reader couldn't secure some temporary funding to weather the transition, or simply negotiate a longer lead time rather than spending all the time in talks and ugly back and forth.
It's not a deal though. Reddit says the users are worth $20 million in lost advertising. So either Apollo pays the money, the users move to another app that pays, or the users return to the official site and app. Either way, Reddit gets their $20 million.
Apollo has no leverage here unless there is strong evidence most of the Apollo users will leave Reddit if the app shuts down. I don't believe they will. The other potential leverage is the upcoming subreddit blackouts, or hinting at taking the Apollo users to start a competitor. The developer said they are not going to build a competitor (that was a mistake, they shouldn't have revealed that card), so I think the blackouts are the only chance of lowering API costs.
This Is the corporate equivalent of "I can't give you money, but I'll pay you with in exposure on my socials". Reddit prefers to be paid in dollars, not with content. They likely have more than enough content from non-Apollo users.
Reddit's free APIs left a lot of uncaptured value on the table. This has become obvious by the sheer number of AI models trained on Reddit data. Free Reddit data goes into the machine, and piles of VC money comes out. Reddit wants in on it, but is unable to stop free API access without the consumer apps being collateral.
I believe this is more than speculation. Pretty sure that someone from Reddit basically said as much in one of the transcripts or conversations shared by Apollo’s dev. Reddit feels they are getting burned by letting their data be used to train LLMs for free.
That said, they were also letting people exceed their API rate limits by massive amounts, so hard for me to put the blame anywhere but with Reddit.
In the recent AMA, they claimed that the average cost per user would be around $1/month. Apollo dev believes it will be much more than.
I feel Reddit could have easily come up with a model where the API usage gets tied to premium account and that decouples apps from API charges.
Reddit has now created a new problem for itself which is that a huge user base that previously didn't bother to look at third-party apps has suddenly become aware of third-party apps. So now, they will start bypassing Reddit's official apps that generate revenue for Reddit in favor of third-party apps that seemingly have a better UX and are ad-free.
You're right on the money. It's all that, and more. Basically, Reddit going to a paid API isn't the big deal. It's the fact that, say, Apollo can pay Imgur under $200/month for all the API calls they need, but Reddit is demanding $20M/year, or ~$1.7M/month [0]. That's what tradespeople call their "fuck off" rate, i.e. the rate they'd quote someone when they don't actually want to do a job, but also don't want to come out and say they don't want to do it.
The TL;DR on this whole situation is that Reddit quoted Apollo and other 3rd party apps their "fuck off" rate, and now Reddit is all like surprised Pikachu face that people who depend on those apps are, well... fucking off.
The trick is the end user of the third party app doesn’t have to pay. The app developer is the one being charged by Reddit.
If you have 10,000 users that Reddit in 30 days is going to charge you $250,000 per month to continue allowing your third party app to operate and you only had 5-10% of your users paying for a premium version you could see how that becomes somewhat unreasonable.
A bit more of a heads up is all the Apollo developer wanted. He understood that the API no longer being free is reasonable. The timing is what he objects. No assistance in allowing premium Reddit accounts that use Third Party Apps to cover API costs, etc.
Nobody thinks that, not even the Apollo author, which is why the problem is not that Reddit is charging for access to the APIs, but that they are charging far more than the amount they’re losing.
I don't understand the Apollo side of this --- that's literally what he's being offered, by his own math. $3/month/user. Fairs fair. He has enough users to make millions a year: their servers aren't his for free forever.
People are tying themselves into knots turning Reddit into either near-bankrupt or evil. Or hyper-focusing on particular elements that are just disputable human interactions, like most (i.e. suggesting he could optimize API calls isn't some slap in the face & shitting on his app. really immature!)
I have absolutely 0 dog in this fight, no huge reddit fan, I just don't like how many people I see bamboozled by him. Extremely manipulative behavior.
Most people are perfectly happy paying for cost of materials + reasonable profit. It was expected. Reddit announced a month ago that were going to charge for API access -- no issues then. The Apollo developer himself already pays for API access for other services (like Imgur).
However when they announced both the pricing and the timeline, it's pretty clear that they are unreasonable. Apollo finding it unsustainable is just one developer and one app. Other developers tried to reach out to Reddit to actually sign up and get more information and they were ignored.
In principle, you are correct, this not a big deal. But in practice, it's been a total disaster. And didn't have to be that way -- they could have worked with their "partners" to ensure a win-win situation for everyone. Instead, they turned it into a lose-lose for everyone. They want control more than they want money.
Reddit would rather get rid of me than find a way for me to pay and I'd be happy to pay for it.
The issue isn't actually reddit charging for API access, its how much they're charging. $0.24c per 1000 api requests which for high volume apps isn't feasible.
That doesn't make sense. Reddit is (charitably) arguing that Apollo is costing them $20m/year. "Splitting the difference" and just losing $10m on a one-time basis doesn't make sense when Reddit can of course just cut off API access.
If Apollo were delivering $20m/year of incremental value to Reddit, then this would've been a sensical bargaining strategy. But the Apollo dev wasn't prepared to make this argument.
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