"We are losing lots of money, we need to start making money, reddit gold isn't bringing in enough revenue to pay the bills. 3rd party apps don't show ads, which costs us a lot of money every month. Keeping the 3rd party APIs up and running also costs us money. Because Reddit needs to stop losing money, we are closing down 3rd party apps."
I don't know what why it is so hard to say that...
Reddit had an easy way out for the issue of 3rd party apps not showing ads, they already have a paid subscription which removes the ads on the official clients, so they could have made the API exclusive to users with a subscription. People would have been upset, but not this upset.
Exactly. In fact, Spotify works exactly like this: you can use any third-party client you like, so long as you have a Spotify Premium paid subscription. If you have a free account, you need to use the official clients with ads.
Honestly, I think they would have had a sizeable amount of people paying for the subscription.
Now, even if they backtrack on this later on in a few months or years, they burned the good will, so I doubt developers are going invest the time to make a good Reddit client after this.
It also opened the door for a more premium non-Reddit app that charges monthly and directly competes with Reddit. From everything I've seen so far there might be enough of the existing Reddit community who are upset enough with the recent direction to make that leap viable and if the reported figures are accurate then the finances might also work if enough people jump ship to establish a new community.
Yes, but much like the "exodus" from Twitter, and others over the years - they all fail to reach critical mass. There's a very real early-mover effect, the likes of which have prevented Mastodon and even Truth from gaining huge ground.
Truth, being perhaps the most interesting, because the main personality behind it sort of compelled it to be semi-well-known simply because of media coverage. The other attempts do not share that effect, however.
They all fail to reach critical mass until someone does. That's always been the history of social networks. Once sites like Myspace and LiveJournal were everywhere. The next generation mostly went on Facebook and Facebook snapped up Instagram. Now a younger generation is on sites like TikTok. Digg and Slashdot are still going but they didn't stop Reddit becoming huge or more specialised sites with overlapping demographics (like HN for example) from building their own communities.
You're right that early movers have some advantage but it's a big world and the Next Big Thing doesn't have to win the whole market on day one - only enough of it to plant seeds that can grow over time.
> they already have a paid subscription which removes the ads on the official clients
Apollo is shutting down because the founder thinks they'll incur about $2.50 per month of costs per user, and apparently doesn't believe enough people will be willing to pay $5 monthly to keep Apollo running.
So, this Reddit Premium (billed at $5.99 monthly) either has few-to-no paid users, or Apollo's founder isn't even trying to sustain his business.
He has 50,000 customers who paid $10/year for the app. Now he's put into a position to support those customers at $2.50/month. (He estimates their server cost is $0.10 per month.) That's an instant $125,000 per month out of his own pocket that he can't recoup from existing customers for at least the next 6 months.
Over the course of 2023, he'll have to pay Reddit $1 million MORE than he has made from the app this year.
Reddit doesn't want to work with third-party apps. That's fine. That's their right. But it's certainly not the app developer's fault that he's forced to quit.
> Reddit doesn't want to work with third-party apps
This sentiment is obviously false. Reddit doesn't want to support third-party apps at Reddit's own expense. That is reasonable.
> He has 50,000 customers who paid $10/year for the app
And now we get to the issue. This was never a sustainable business model. It depended on Reddit API being free - even at the massive volume Apollo operates at. That is unreasonable.
> And now we get to the issue. This was never a sustainable business model. It depended on Reddit API being free - even at the massive volume Apollo operates at. That is unreasonable.
Christian has already shared his correspondence on Reddit with this. He pretty clearly sought and received regular assurances that when and if Reddit moved their API to a paid model that it would be at a reasonable cost and with a flexible timeline to accommodate third party apps.
After telling him no such big moves were happening in 2023 they changed their mind, set punitively high prices and gave barely a month's notice.
> a paid model that it would be at a reasonable cost
What does this even mean? "Reasonable" is subjective - and from Reddit's perspective, I'd bet they believe the fees are reasonable.
It's on the business operator to mitigate risk. Apollo didn't do that - and is now throwing in the towel instead of charging their customer's more.
> set punitively high prices and gave barely a month's notice.
Apollo has had since April to figure out a new billing model - but sat on their hands hoping whatever Reddit came up with could be afforded with their existing $10 per year per user model. Say it out loud - it's absurd.
> Apollo has had since April to figure out a new billing model - but sat on their hands hoping whatever Reddit came up with could be afforded with their existing $10 per year per user model. Say it out loud - it's absurd.
Just stop.
You’ve been told multiple times, by multiple people, that this was not the case.
You’ve been provided the timeline, which you refuse to acknowledge.
You very well know that he was not provided the pricing until 8 days ago.
At this point, you continuing to say this is just being disingenuous and talking in bad faith.
What, exactly, are you getting out of this? Is unreasonably placing the blame on a single developer your way of getting your rocks off?
Are we reading the same information? There is not one thing I've said that is not in the linked post, or any of the previous posts regarding this topic.
You may want to believe and be sympathetic toward Apollo - fine.
That doesn't change the circumstances nor realities. Apollo screwed up, and is now throwing in the towel. It's really hard to be sympathetic towards a business operator that's made a series of bad choices and now is playing the victim card and shutting down.
You have constantly pushed a reframed timeline that isn’t actually indicative of reality. You have been told multiple times why. You have ignored multiple different things that Reddit has done in an effort to shift the blame entirely onto the Apollo dev.
You’re the only one who is finding it hard, and your constant push to shift the blame off of a massive corporation and onto a developer is frankly weird.
Re-evaluate your life choices if you truly believe this, but it’s clear you are the extreme minority here.
Says the person who has been told multiple times to stop making things up and incorrectly reframing the facts by multiple different people. The projection is strong with this one.
> This may go down in history as a case-study in how not to operate an internet business.
It certainly will, but not Apollo’s handling as you so desperately want, for whatever reason.
Reddit fucked up, are probably going to lose a chunk of their most active users and volunteer moderators, and will probably materially damage their IPO as a result of this.
You seem to be one of very few people who refuse to even remotely consider this idea.
> He also had way more than 30 day's notice and chose not to do anything until the last moment.
> He has had several months to prepare for a new billing model - but chose to do nothing.
I like how you keep on refusing to read the article, but claiming things from it that are straight up untrue.
Reddit announced less than two months ago that there would be pricing changes. But not what those prices would be. Even the loosest possible interpretation of the words "notice" and "several" barely covers that.
Explicitly:
> On April 18th, Reddit announced changes that would be coming to the API, namely that the API is moving to a paid model for third-party apps. Shortly thereafter we received phone calls, however the price (the key element in an announcement to move to a paid API) was notably missing, with the intent to follow up with it in 2-4 weeks.
And at the time, there was absolutely no indication that the prices would be this high.
> The information they did provide however was: we will be moving to a paid API as it's not tenable for Reddit to pay for third-party apps indefinitely (understandable, agreed), so they're looking to do equitable pricing based in reality. They mentioned that they were not looking to be like Twitter, which has API pricing so high it was publicly ridiculed.
Literally the most cursory of reading of the first few paragraphs of the OP would have given you this information.
If you aren't going to bother to read it (that's your prerogative), then don't bother making easily provably false assertions as if they were facts, either.
> This is subjective. He's basically saying he's willing to pay an amount that fit into his old, not well thought out business model, and it's up to Reddit to pay for the rest.
That's not what he said. He said that it's not feasible to transfer from the current pricing with 30 days notice.
That choice is entirely on Reddit, the situation did not demand such a short notice period. They could have smoothed it out but chose not to.
I find it strange to push the blame onto someone who was assured by Reddit of their intention to charge a reasonable price, and to work with 3rd parties on a flexible timeline for the introduction of the charges.
The worst I can say about the Apollo developer is that he believed Reddit were acting in good faith. Reddit on the other hand look like incompetent arseholes.
But like.. He asked if they had any plans to change it. And they said no. I can't imagine the hoop you're expecting him to jump through - get a seat on their board covertly?
He addresses that in the post. He only has 30 days to accommodate the price increase. What is he supposed to do about his current clients that already paid for the year? Take a huge financial loss until his updated pricing catches up? He asked for more time, they said no.
I'd be similarly judgemental if Christian had been the only one to behave like this. But when you look at the field, everyone was taken by surprise by the prices. Pretty much all the major apps are closing. Were all developers hopelessly naive? All of them? I find that hard to believe.
The OP didn't even bother to read the conversation. This was announced in April, but Reddit did not provide prices. It only assured this won't be as expensive as Twitter API access, and the drama started once it actually did.
He made those decisions based on information he'd received from Reddit. His mistake was believing they were acting in good faith (rather than being lying scumbags).
> Apollo is shutting down because the founder thinks they'll incur about $2.50 per month of costs per user, and apparently doesn't believe enough people will be willing to pay $5 monthly to keep Apollo running.
> So, this Reddit Premium (billed at $5.99 monthly) either has few-to-no paid users, or Apollo's founder isn't even trying to sustain his business.
If you read the post, it's not just about the willingness of users to pay. It's also about the existing obligations (prepaid subscriptions), the timeline of the changes, and the amount of work that would be required on his end to adapt to the new changes within the next three weeks.
None of that would be an issue with the proposed solution of Reddit charging the users directly.
He has to flush the existing subscriptions no matter what. It's done. He has said he can afford it.
He could fire up a new system with appropriate pricing as soon as he can manage. All customers, if they want to come back, are then forced into the new system at new pricing levels. Maybe this takes a month or two or three. He's not losing money in the mean time and can re-open at something resembling a profitable stance when he can do so.
Yes, it sucks. But there's a path here if he wants to go for it. I don't blame him for throwing in the towel. He's tired of getting yanked around. I would be very hesitant to keep throwing good time(money) after bad.
As someone who spends way too much time on reddit and would be their prime target audience: i have no idea why I'd sign up for reddit premium. Not a single feature i care about.
Reddit premium subscriber here — I use it because it hides ads, I get a lot of value from Reddit (and want to make that sustainable, if possible), and Premium gives me stickers I can award to comments occasionally in addition to upvotes.
I may consider 6$ per month if the money goes to app maintainer, content creators, moderators and good commentators. But 3$ to Reddit for providing an api, a few bytes db space is simply too much.
I know people keep floating this idea of paying for reddit, and that's somewhat hilarious to me.
There is no chance I'm paying for a "service" where power-mods will ban you for disagreeing with their radical politics, where most of the subreddits are actively taken over by similar power mods who push their radical ideologies, and where any attempts to evade this stuff and simply use the website can get you permanently banned from the service.
Imagine spotify, but if you listen to the wrong songs, you get banned from other random artists, and if you try to work around this you just get banned outright from spotify.
Sibling comment already addresses it. But to add, I’d happily pay and I want to pay $5 or more to Reddit. But not everyone is like that. Reddit cornered third party apps into a single subscription model with very little time to adapt. I think Apollo could have accommodated these changes over 6 months. Reddit could have also added an ad based tier. Instead they forced a huge price hike with less than a month to react to it.
Aren't they effectively just offloading this whole question onto the apps? For the sake of argument, let's say what they are charging for the API is about 80% per-user of what they make for users who use the official app (and therefore see ads). I have no idea what the actual numbers are, this is just theoretical.
In that case, app developers have several options:
* start showing users ads, and use that to pay both themselves and Reddit
* start charging a monthly fee for the app, and use that to pay both themselves and Reddit
* some combination of these two (e.g. pay a subscription for ad-free use)
Sure, Reddit could make this easier for app developers, but isn't it all basically the same thing at the end of the day? Reddit wants (or needs? I have no idea what their financials look like) to make a certain amount of money per-user or per page view. Apps take home ~100% of their profits currently, and make Reddit ~nothing. So Reddit is pricing in a profit rate into API access.
I mean, just to look at Apollo, they have 166K ratings on the Apple App Store, and surely far more users than that. Reddit wants $20M a year from them. That's high, maybe too high, but how does it compare to the value of (say) a million users a year on the official Reddit app? If Apollo switched to a subscription model on which they charged $1 a month to users, would they be able to pay Reddit's API fees? (Assuming those API fees would drop by at least 50% after non-paying users quit using Apollo.)
Nearly every element of your comment is blatantly wrong, some directly addressed by the post this comment thread is discussing.
- Reddit is charging the equivalent of 20x its published revenue per user for the API.
- The new API agreements ban the display of any advertising by API users. (Apollo did not show ads, but other third-party clients did, and Reddit claims the low quality of ads was harming Reddit by association.)
- Charging $5/month would be break-even given the API pricing, and only for new customers. Apollo would still have to serve earlier subscribers at a huge loss. API fees would certainly not “drop by 50%” — the vast majority of people subscribing to Apollo are power users, so the average API usage per customer would _increase_.
I say pretty clearly that I'm talking about purely theoretical numbers. The underlying fact is that the status quo is probably unsustainable for Reddit. It's hard to be "blatantly wrong" about a series of hypotheticals, IMO.
There's a lot of strange stuff happening in your comment. On the one hand, let's take for granted that Reddit is charging 20x its revenue per average user for the API. But that's just the average user; as you yourself point out "the vast majority of people subscribing to Apollo are power users". Surely they are worth much more to Reddit than the average, extremely casual user?
The underlying problem explained in the post is that the author pre-sold access to Reddit through an app to users, while this access was actually conditioned on the continuing availability of access to the Reddit API. No doubt this does put the author in an uncomfortable position! Given that the current plan is to shut down the app anyway, surely cancelling active subscriptions should also be on the table? Subscribers are going to lose access to Reddit through Apollo either way! So realistically, what we're talking about here is whether $5/month is a reasonable price point for power users. My answer is... maybe?
I think my instinct is to say that this is all ultimately the place where negotiations are supposed to happen. Reddit needs to go from making zero dollars off the API to making something. Is what they want to charge too high? Probably so. But a lot of people are acting as if any charge at all is untenable.
> But a lot of people are acting as if any charge at all is untenable.
Is that the case? Every reaction I have seen has been to the magnitude of the price, which is much, much, much more than what Reddit makes off of users
Isn't that why Apollo said they'd sell the company for $10M to Reddit if they wanted to take it over? If it costs Reddit $20M/year, surely they could make more than $10M/year if they took it over themselves.
There's a step before this. They're losing a lot of money because the choices they made to take investment to earn more money. They could've gone the route of wikipedia. They could've stayed extremely lean. They took $1.3 BILLION in funding, minimum. They have 500-1000 employees.
Its greed that they got here. They made choices, and then as a consequence of those choices they made choices that are significantly reducing the value they provide to their users. Its enshittification, its killing the golden goose, its destroying a public good for the benefit of investors who don't care about anything other than making a return.
The worst part is the investors don't care about anything other than making the numbers look good in the short term so they can dump their investment onto other investors. Its like all of corporate america decided to watch The Wire and go "Oh see how they're pumping up the numbers to make them look good for the mayor, but not actually solving crime? THAT should be our business plan!". Providing value is a side effect of making money, on the false equivalence that making money means you're providing value, so therefore making more money means you're providing more value.
Yeah. The wikipedia approach to an online platform seems ideal.
Wikipedia is pretty fantastic. Signal is pretty great. I'm pretty happy with NPR. Archive.org makes me happy.
Appeal to people with money (the professional class) and then beg.
I feel like the next great social media platform will result from a rich person disillusioned by reddit (a Bryan Acton type) creating a platform resistant to "next quarters profit"-ism.
Because I'm not so sure that it's true. Reddit isn't massively profitable but it also doesn't have to lose a ton of money. IIRC they were able to run a much tighter ship and operate off of just Reddit Gold and ads for at least a decade before they started this recent hypergrowth phase
13 years ago, when I worked part time for them, it was about 5 people, with support being provided by Condé Nast peeps. This was right during the middle of the Digg v4 exodus to reddit. I remember when reddit got its billionth pageview month
I wonder if Reddit ever considered and calculated options like showing ads, selling reddit gold and merchandise through partner apps. Maybe it could be coined into win-win-win but ended as it is.
The fees aren't small, they also forbid 3rd party apps to show their own ads and will be blocking NSFW subreddits from API (none of those things apply to their mobile app).
So ultimately they want 3rd party to use subscription model to ultimately get worse experience.
because they're going public, saying "we're broke, please invest" isn't going to work for them — at this point everything they do is to more or less prop up the value until everyone can cash out
"We are losing lots of money, we need to start making money, reddit gold isn't bringing in enough revenue to pay the bills. 3rd party apps don't show ads, which costs us a lot of money every month. Keeping the 3rd party APIs up and running also costs us money. Because Reddit needs to stop losing money, we are closing down 3rd party apps."
I don't know what why it is so hard to say that...