> The trouble is that, in my view, there is a conflict between the goal of pleasing the reddit board and the goal of creating a vibrant community.
If you can't run a business that brings in the money to keep the lights on, you can't maintain a vibrant community, either.
I think a lot of the issue is that lots of people are attached to conditions that are only made possible by the willingness of investors to tolerate Reddit's lack of profitability in the expectation that that will be turned around in the future, but that that willingness is not sustainable.
> Its a meaningful argument from the POV of Reddit management, and their effort to build a profitable business
Oh absolutely. I'm not disputing that. Of course they are doing all of this in pursuit of profit (or at least in pursuit of pleasing their board). The trouble is that, in my view, there is a conflict between the goal of pleasing the reddit board and the goal of creating a vibrant community.
> This is where most of the conflict lies. Reddit the community and Reddit the business don't have the same goals in mind.
And this is the part about Reddit that I just don't get. A few years ago their users were a rather homogeneous group of nerds that had a lot of trust in the reddit management. Why on earth didn't they capitalize on that?
By doing all the latest actions that aim at getting rid of people that are now unwanted they try to get once again a somewhat homogeneous (albeit different) group of people. So maybe soon they are structurally exactly where they were some years ago except for the huge lost of trust of their users.
How is this going to help increasing their profit?
> I feel for them. Figuring out how to make a giant free service profitable isn't easy. It's too bad the tactics they've used seem to be so off-putting.
I don't. Reddit could be profitable of they wanted to. They make a ton of money through Reddit Gold and ads. The reason they are not is because they have hired way too many devs and other staff, presumably because they plan to do an IPO so founders.and execs can become rich and investors make a profit.
> One big issue with Reddit is that it is mismanaged. With the revenue they are generating ($456 million USD), it should be more than enough to run a site like Reddit.
So who gets fired? How many people are you willing to make unemployed? What services get removed? What improvements stop? Realistically, the reason they don't make a profit is they're aiming for growth and they're getting the growth.
> There is no one problem with Reddit, and that is the problem.
Actually there is one singular problem ... money.
They could accept that "reddit the product" is a 2-5bn market cap business with solid 0.5bn revenue; staff up on that basis, scale their infrastructure on that basis, M&A on that basis, set investor expectations on that basis.
> The problem is that many people have come to think of reddit as a public utility. (...) Reddit is not a public utility. It's owners have decided that short-term profits are more important than serving as a long-term non-profit public utility. I can't fault any business person for making this decision, but it's the key reason why we need publicly controlled infrastructure to do what reddit does now.
Exactly this. And the same applies to Twitter and Facebook as well. And probably increasingly Discord.
In the end, both sides lose because of this misunderstanding (well, except the investors on the business side win). There is demand for both, and there is space for both, and I think the society at large is going to slowly realize that the two things - utility-like social media and regular private business - are different, and learn to differentiate between them - and maybe then, finally, the utility-like social media will be created.
> It convinces itself it has a right to profit here, but it really created almost none of the value.
I used to believe that too, but reality has convinced me of the opposite. There isn't, and there has never been, a large (hundreds of millions of active users) online community that wasn't run by a for-profit entity. So the really difficult part, the one where the value ultimately comes from, does seem to lie in hosting and running such a community, and in attracting users. If that wasn't so immensely difficult and expensive, everyone would be doing it.
The demise of Reddit has been a long time coming, and now that it is actually happening, there is once again no plan for "the community" to move forward. The open source alternatives are all effectively worthless, with Lemmy apparently telling people not to sign up (yep, seriously!) because they can't handle the influx. No doubt Facebook & Co, or perhaps new commercial competitors, are going to pick up the slack as usual, because the real value is in the infrastructure and network effects that make platforms like Reddit possible in the first place.
> According to the CEO, Reddit is losing money. It won't survive long-term if that doesn't change. If people care about reddit and its community, it seems like that's what they should be thinking about.
You are correct. There are two ways to solve this. One is reducing expenses. How many paid employess would a site like reddit need? I would be surprised if that number was more than 50-100, and not surprsed if that number in reality is much higher.
Second is increasing revenue. Increasing the price for the API is probbly a wrong move as API increases distribution which is what you want. You do not want AI companies scraping and reusing content for model training for free, so you make separate terms for that.
Instead, you try with paid Reddit plans. Would be nice for users to own their piece of reddit and pay for their favorite scoial platform with some perks included (freemium). Also it does make sense for subreddits to pay a fee proportional to their membership after some threshold of say 1,000 users. After all, owning a huge subreddit give a lot of power in many ways. If I had a subreddit with 1,000,000 users I think I would pay $100-$1000/month to have that kind of distribution power.
>Reddit, like so many other places, believes it has a right to extract the value the community creates.
>But it doesn't.
I'm sorry, but it absolutely does. Yes, it has to do this subject to brand risk constraints. But the idea that investors should just expect to make losses on the site is insane. That trying to turn a profit on their own platform represents "freeloading". I guess normally I'd feel sorry for whatever platforms are afflicted with people who hold this sort of ideology, but Reddit has done a lot to cater to people who think like this.
>To see Reddit as having no value, a person's ideology would have to outweigh all those benefits.
Not quite, the downsides simply have to outweight the benefits. Value is relative, but even before this drama I've simply started valuing reddit less and less. It's harder for me to find actual conversation and I need to filter out more and more noise, toxicity, and outright spam to do it. It's become too much work, and that says a lot given that I browse Youtube and 4chan comments as well.
>If it's a bad business, then all of that value it provides for all of those people wouldn't be worth whatever Reddit asked in return.
Given recent valuations from places like Fidelity, that may in fact be the case. And that's who Reddit is trying to appeal to, not the actual users beneitting from the value of community.
>Much of the turmoil was about API fees. I'm happy to pay their fee to do more good for people.
And I'm sure others do too. However Reddit made it clear next month that they don't want 3rd party devs to divert costs to the users. Which sends a message that they do not want to work with 3rd party devs on their terms.
I don't want to swing this back to that drama, but that example is very endemic of how Reddit has operated for at least 7 years. There are compromises users would like to make but reddit doesn't allow nor make time to make becasuse the focus isn't on user satisfaction.
Maybe others will continue asking. But I'm simply done. The time I spent trying to improve reddit could have honestly been spent finding and fostering a new community who will listen.
> Reddit is having the same problem. The original founders were lucky in that it was bought out and they got their payout.
How is it having the same problem? I think it still has a decent shot at monetizing. And, I don't think it's going anywhere soon... it's like Facebook in its class, it's too entrenched, people are not going to move on to the next thing so easily. I don't even know any serious contender to Reddit.
> Or just find a way to cover operating costs and let Reddit be, you don't need to push it into a billion-user company, SV profiteering style.
Sure, if you can find investors willing to sink capital into a non-profit-making venture to replace those who currently are invested in Reddit, and who would probably prefer liquidating their holdings at a loss to have something to put into a profit-making venture than to let it sit in supporting a non-profit-making discussion forum.
If they're unable to build a profitable product off of the existing foundations then, yes, I absolutely want them to fail. This is how capitalism works.
> Reddit is not profitable. They need a path to profitability to continue operating in a high rate environment.
They've had over a decade to innovate their way to success just like every other tech company of that era.
From a business standpoint, they are an abject failure and don't deserve to exist if they can't hire people smart enough to monetize without alienating the entire user base.
>Reddit users wouldn't care if Reddit went out of business? I find that hard to believe.
Sure they would. But if Reddit went out of business, a new Reddit would immediately take it's place. The value to be extracted from such a large user-base is too great for this niche to go unfilled. How that value would be extracted in an ad-free system is yet to be seen. But I have faith in human ingenuity.
>Got any ideas? Nobody has come up with anything that works so far.
That is precisely my point. No one has come up with any ideas so far because there is not sufficient incentive. The model that now exists makes money, so why would anyone try too hard to rock the boat? Sure there a few small bit players trying to change things. But these limited ideological efforts are completely different from the full brunt of a capitalist market seeking profits under constraints that completely disallow advertising.
The Pao blackouts were orchestrated by the moderators, a group whose influence I did fail to consider. They're essentially Reddit's paying users, insofar as they pay with their time. Advertisers pay the server cost, though, so I imagine that in an all out battle between the two, Reddit would switch to being completely closed. I understand the community aspect has a wide appeal, but I wonder how much of the revenue-generating userbase exploits that aspect. Are most users subscribed to communities they choose, or are most users subscribed only to the default subreddits?
>Don't be so eager to defend a corporation's right to be profitable.
I neither condemn nor defend. I'm only interested in getting a realistic view of how Reddit plans to proceed as a company and website. Part of that is analyzing who is making decisions and who is influencing those who make decisions.
If you can't run a business that brings in the money to keep the lights on, you can't maintain a vibrant community, either.
I think a lot of the issue is that lots of people are attached to conditions that are only made possible by the willingness of investors to tolerate Reddit's lack of profitability in the expectation that that will be turned around in the future, but that that willingness is not sustainable.
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