Not sure I agree. Apollo is apparently monetizing these users above and beyond what Reddit is/was able to accomplish. I’m confident that this represents value to Reddit > 0. So Reddit may have leverage, but not all the leverage.
The post mentions that Reddit calculates a $20M/yr opportunity cost to allowing Apollo to continue running as-is. Apollo is trying to say that $10M one-time is a bargain if Reddit truly believes the users are worth $20M/yr.
I don't think Apollo is using this argument as some sort of leverage. Reading through the post, they seem well aware that they are defenseless. They only have the court of public opinion.
This is an interesting point. I use free Apollo, and realized when I tried to post, that its a paid feature.
So you have to figure that all the revenue is largely from contributing users and the dynamics on social media go something like 5-10% of people post all the content. Also, i heard it has great tooling for mods as well.
We'll see how big of a blow this is but yeah, you're right, a lot of Apollo users are probably high value reddit users.
I think the $0.12 figure that was calculated on the post may have been too low.
Iirc, the entirety of Reddit’s user base was used for the calculation. My guess is that Apollo’s subset of users are much more active (and probably more lucrative in terms of ads and user data) than probably 99% of all Reddit users.
The users don’t belong to Apollo. Reddit provides a service to Reddit users, Apollo freeloads on that service, cuts off Reddit’s revenue stream, and replaces it with its own. Why would anybody think that Reddit has some obligation to allow this, or that Apollo has some right to do it?
Not at all. But it seems like the Apollo dev’s argument was “if it actually costs reddit $20m they why not buy Apollo for only $10m”, which doesn’t make sense.
This doesn’t make what reddit is doing any more reasonable though, imo.
Ah, that makes much more sense. But, it could be the case that reddit thinks someone will end up paying their outrageous fees, just not him. It doesn’t necessarily follow that they think Apollo is actually worth that much. Then again, if that’s the case it would be reasonable to work out some sort of discount that reflects the true value of the Apollo user base.
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.
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.
Apollo is a for-profit app. They are using reddits technology, servers, and users for free to make money off their own advertisements.
Reddit isn't "losing" any money by losing apollo users, since it wasn't making any money in the first place.
This seems like a billing dispute between two companies, not a user issue. Reddit also announced that modtools will be allowed to use the API free of charge.
At the end of the day, most people log in to reddit once or twice a month. Those are the users that are being targetted by advertisers anyways. The power users and terminally online moderating staff are more of a headache for reddit than a benefit.
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 think a big chunk of this is prioritization of resources in a way Apollo doesn't have to worry about. I highly doubt reddit has like utterly mediocre/shit devs. I think it's more likely that works are being prioritized in a way that shafts mods (who don't pay money) towards the goals of the reddit company to ipo (more ads and engagement with their first-party platforms). We had stupid shit like reddit coin and reddit gold and random other small features that are primarily to make money on the first party platform. Apollo's spec is much smaller in comparison, in which the users of Apollo are effectively paying for a smoother integration with whatever Reddit already built.
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.
Also Apollo doesn't cost them shit. Unless they're arguing that they lost $20m/yr in ad revenue you can't do the math like that. Reddit users cost Reddit $20m/yr.
That money is pennies to reddit. Apollo was around long before the official app and established a majority mobile userbase which you could argue helped build reddit into what it is today. I guarantee you it 100% made reddit more money than it made the developer of the app. Reddit is the bad guy for slandering him and gaslighting their users at every turn, yes.
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.
Reddit gave something to users and now they want to take it away. What did they expect?
There was likely a path to making Apollo a paid product, letting it's popularity wain, and then killing it. Instead Reddit went for the power move and gave the mob a flashpoint to rally around.
That sounds completely reasonable - if you assume the users currently on Apollo 1) Can't be made to pay, directly with a price for the app or micropayments or indirectly via ads 2) Would move to the official app if Apollo shut down and 3) Don't bring in posts and comments with which other users engage, raising money that way.
Sounds to me that shutting it down is the one sure way to lose money, but I also don't trust that the reddit team had made that calculation properly. This all seems like a short term profit or like a power play to me.
reply