I think he's saying that Reddit will eventually reach a point where the interests of its community and the site itself WILL diverge to some extent.
It's something that has to happen and will happen to the best of em, and it just depends on how Reddit chooses to handle the situation.
A really great example of good monetization I think is Ultimate Guitar. The site used to be completely free and the community of musicians was and still is unparalleled on the internet. They've monetized pretty heavily over the years by offering paid tools and more features/premium-content for musicians (even making their own mobile apps for things like tuners, tabs, etc). I think it was a great way to monetize the community on top of ads. However, it benefits from having a very specific focus (music) and a very focused and passionate community which makes the process of monetization a little easier.
The problem Reddit will have I think is that the community is extremely open, unfocused, and unrestricted (as well as having multiple sub-communities). Its very user-driven so it becomes difficult to creatively monetize without infringing on their "freedoms" or "openness". For example, I think /r/iama would be a great outlet for brands to come and have a conversation with the community (for example, before a movie release). However, that subreddit is ALREADY used like that, and it's very open. Anyone (including any brand) can come in and do an AMA so any type of monetization would have to to be a complement to the community (can't monetize the community itself without killing it or pissing people off). So how can Reddit monetize without just resorting to ads and promoted content? It's a difficult question and I don't see a clear answer.
If they do decide to do stuff like "featured" posts, I think they will have to be very very careful to not clutter up the user-upvoted content and hopefully they'll work hard to make the "featured" stuff interesting to the community. They'll have to make some important decisions when monetizing and I wish them the best of luck.
I agree - if you take some time to really customize your subscriptions and interface options (read: ditch the new interface immediately for the classic one), reddit can be a very powerful 'dashboard for your interests' unlike most other sites.
I guess the questions is if they can keep it that way and also monetize.
I find it puzzling that most comments in here don’t even reference the original premise of Reddit.
> Reddit is largely a community of anonymous users that provide web content for each other.
The communities and the anonymous bit is totally the draw for most users. Most technical suggestions for monetization I read in here seem to completely ignore that (outside of marketing to a subreddit instead of directly to users, which some subreddits don’t even allow because that’s not the point of Reddit).
Suggestions I’ve read like not allowing multiple accounts, no anonymous users, etc. seem like suggestions that would kill the platform.
I think reddit has outgrown its ability to innovate in this way and suggest it will likely be a competitor not bound by the constraints of being an established player that will allow them to create a more compelling offering.
Reddit was a great place to engage with ideas, and then move on from them, but turning it into just another surveillance operation is where communities go to die.
I still think I know how Reddit could make money, but it's possible they are too staid to get it. They may have also lost the plot politically, where a particular flavour of virtue is becoming a substitute for the growth and success they actually need to effect the change they want to.
The music business is and always was a celebrity and micro-celebrity factory, and Reddit (and their main magazine empire investor) could be that for content. Imagine a record label like Time Warner happened to own every indie bar in every little city where bands played, got first option on every group that came through the doors, and could measure audience reaction in real time.
That's what Reddit is, but for content.
This pressuring users to give up PII sounds like there is a sea change happening at the corporate/financial level where they've been given a limited runway and need to show some short term traction, "or else." I've mostly kicked my reddit habit, and their strategy really resembles something they'd do if they're hitting a negative inflection point.
Reddit is getting so much usage because it hasn't been monetized yet. At the moment it's quite good free user forum/board/discussion/community-style site.
The new design will drive the users who liked that away. They will either eventually scatter away to hundreds of different places, or one or two new companies will take Reddit's current place.
Some products can’t be monetized. Sometimes monetization kills its host. Reddit will be a case study in how this dynamic can unfold. I’ll miss it, but a replacement will eventually come along.
Reddit is becoming bigger and bigger. Which is somehow bad as a quality point of view (look at HackerNews, and people there are already complaining that it got too big like reddit).
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Reddit did a very smart thing to counter that: subreddits. So now you can still dislike reddit as a whole but find what you want in a subreddit.
Now I think that if reddit has a way to monetize its website, somewhere, it is through subreddits. You could put a free2play kind of system. Customize your subreddit but pay to unlock features. Create subreddits where you have to pay to get in (it already kind of exists with the lounge).
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Advertisement. Reddit is really, extremely, reluctant to advertise on reddit. It's nice from a user point of view. But from an advertiser point of view, why? Reddit is the perfect place for ads. Users click and click and click and they read text before clicking. Google ads would make them profitable in a few days. It's important to think about it.
EDIT: I'll add that the subscription system makes and the subreddits make it an excellent way to know someone's tastes. It's even better than facebook imo.
It might work with Reddit. The cost of creating a new subreddit is zero, so people can move from poorly handled communities.
Reddit is struggling for money, but they have an amazing platform to test out ideas on. Out of their millions of users one person should be able to come up with a way to monetize the platform. Google did this with their ads: the most popular ads get rewarded.
If I was a moderator and I was given a list of options to generate revenue for Reddit (and myself or my community) I would have to consider it. Maybe I have a community that reviews widgets and I can link to stores that have the best deals for highly reviewed widgets. It is transparent to the community, gives everyone a good deal, and pays for Reddit.
I wonder if reddit has explored fostering or monetizing commerce that happens on reddit. Wherever people congregate there will often be commerce, formally or informally. But that presents its own set of problems as well.
I have a feeling that Reddit, with its focus on growth of the user base, is just going to play to the lowest common denominator. As soon as it is filled with what amounts to user curated network TV levels of content and the banal advertising mindset that goes with it, it will become Just Another News Aggregator and will not inspire the level of engagement it has enjoyed until now.
Reddit doesn't have a sticky network effect. The content decays. People can easily jump ship.
I don't understand why they are obsessed with raw 'ratings' numbers anyway. Part of what makes their user base valuable is that they are self-segmented -- it is the small, focused communities. Also that they are used to hopping off site then back again to re-engage. They are missing a huge opportunity, not to merely get more people in the door, but figure out how to serve the valuable communities that already exist there.
If they keep staring at that bone in the water and open their mouths to grab it, they will lose the tasty morsel they could currently be enjoying.
What they really need is some people that know how to target ads effectively to small valuable clients and some technologists with the chops to help them make a profit from that valuable connection making. Some deep experts from Google's Adwords team, for example. And they need to make the whole process above board and transparent so the userbase doesn't feel like they are being used secretly. Reddit and their commercial offerings should feel like a partner for users, a valuable available resource, not a slimy shill machine. I think that's possible to do but it is going to take a hell of a lot more finesse and openness than they've shown recently.
I'm finding it difficult to square your assertion that Reddit is "unique" in this respect with the assertion that it's the web that's "making marketing and distribution free".
The only way that web marketing is "free" is if product awareness spreads between customers, or is pushed through the founders' personal contacts. Wouldn't this imply that we could expect this phenomenon - the initial user base being in some way close to the founders - to grow as the industry approaches the asymptotes you assert it is heading for?
However, Reddit and similar platforms usually can't operate under this logic. Why? Because they need to make money to stay online/keep operating. And unfortunately, that means content that alienates advertisers (like a lot of the more controversial subreddits) ends up actively hurting their revenue stream.
They could try and get round this by monetising in other ways (micropayments, subscriptions, purely donations, etc) or by looking for ad networks with real low standards, but those methods likely wouldn't pay enough to keep them afloat.
It's why in the long run, I suspect the answer to the problem isn't a centralised platform that hosts a lot of different communities, but a system that connects individually hosted communities into a 'network' of sorts with similar features to Reddit.
That way, you can have both controversial and non controversial 'subreddits', with the latter paying their own hosting bills and the former either doing the same thing or getting subsidised hosting by the network owner.
It also shuts down any future attempts at censorship by not giving the company running the service any way to edit what happens on any one community.
I doubt that it will happen exactly like this. Reddit has become a behemoth that caters more to the average consumer of social media than to the original tech crowd that represented its first members.
The only way a new platform can compete with them is by having the individual communities of reddit move to it with individual governance and then, allowing these communities to interact with each other in some way. The alternatives that look promising today are based on ActivityPub, but they fall into the same trap that reddit has: they want to appeal and attract as many users as possible without regard for suitability or community building. I'm hoping that the ting I'm working on will be better, but I'm not there just yet.
Reddit is a great site in what it does. And due to its nature, it has tremendous amount of niches, some of which are worth a lot of money if handled properly.
For instance, /r/watches is an active area for discussion of watches. The people who post there often share their new Rolex or their treasured Patek Phillipe. /r/watches is just one of many, many such niches on the site which have a lot of potential value.
My thinking has been that reddit could focus on developing the value in its many product oriented subforums.
Also, interestingly enough, reddit has already sort of created its own new cybercurrency - dogecoin. Though it may not be doing well, I think most of the value in dogecoin was how easy it was to use on reddit.
reddit does need to find a way to monetize. I think it could do so quite successfully due to the nature of it having many high value niches.
I say all this as a big fan of the site and have even been considering making a subreddit finder (so that someone who is a fan of the TV show Suits, for instance, can know that there is /r/suits to discuss the show, which they would have simply no way of knowing if they just landed on reddit's homepage with pictures of Very Round Eggs, to use a current example).
It may be impossible to have a situation where a for-profit company makes a service where the users are not the paying customers and users are treated well indefinitely. Reddit has experimented with a paid premium service, but they couldn't paywall any core functionality because having as many users as they can get is critical to their success.
It's probably a mistake to rely on things like that for socialization, communication, or creating communities. I would like to see federated technologies take off; there are at least two Reddit-alikes using ActivityPub, Kbin and Lemmy, which seem to federate with each other smoothly. They're currently much farther from critical mass than Mastodon (though they sort of federate with that too).
Reddit is a top ten site in the US, but is valued at a fraction of its competitors. The main worry I have for reddit moving forward is how do you monetize a userbase that is HIGHLY resistant to change. They're pushing heavily into their new mobile app, which is a solid start as an ad platform, but the old crowd on reddit all came from Digg after Digg tried to change their model to support more revenue. Their users will jump ship if they push too hard / too quick. I love reddit and use it heavily, but I don't see how they become profitable without alienating their userbase.
I was just discussing the phenomenon the other day. A question arose about what value Reddit (the company/site) provides vs. it's community.
I think we've all be on the internet long enough to see vibrant communities (usenet, forums, MUDs, myspace, etc.) bloom and wilt away. If Reddit cannot provide a high level of value to the people that generate content within the community they will migrate away to an environment that does.
It's something that has to happen and will happen to the best of em, and it just depends on how Reddit chooses to handle the situation.
A really great example of good monetization I think is Ultimate Guitar. The site used to be completely free and the community of musicians was and still is unparalleled on the internet. They've monetized pretty heavily over the years by offering paid tools and more features/premium-content for musicians (even making their own mobile apps for things like tuners, tabs, etc). I think it was a great way to monetize the community on top of ads. However, it benefits from having a very specific focus (music) and a very focused and passionate community which makes the process of monetization a little easier.
The problem Reddit will have I think is that the community is extremely open, unfocused, and unrestricted (as well as having multiple sub-communities). Its very user-driven so it becomes difficult to creatively monetize without infringing on their "freedoms" or "openness". For example, I think /r/iama would be a great outlet for brands to come and have a conversation with the community (for example, before a movie release). However, that subreddit is ALREADY used like that, and it's very open. Anyone (including any brand) can come in and do an AMA so any type of monetization would have to to be a complement to the community (can't monetize the community itself without killing it or pissing people off). So how can Reddit monetize without just resorting to ads and promoted content? It's a difficult question and I don't see a clear answer.
If they do decide to do stuff like "featured" posts, I think they will have to be very very careful to not clutter up the user-upvoted content and hopefully they'll work hard to make the "featured" stuff interesting to the community. They'll have to make some important decisions when monetizing and I wish them the best of luck.
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