Despite widespread opposition, Reddit CEO says company ‘doesn’t negotiate’ with third-party app fees

WASHINGTON (AP) — If you’ve been using Reddit to scroll through your favorite forums this week, you’ve likely come across “private” or “blocked” messages. This is because thousands of subreddits have chosen to go dark A continuing opposition to some of the controversial changes announced by the online discussion network.

The blackout, which began Monday, was sparked by outrage over upcoming changes to Reddit’s application programming interface (API) access — specifically, the company’s plan to start charging high-use third-party apps that have long used Reddit data. To create resources for users that are not available through the official site or application.

Organizers of the protest say Reddit’s new policy threatens to end key ways of customizing the site, which has historically relied heavily on the volunteer labor of subreddit moderators. Many users currently rely on third-party apps to access features that aren’t available on the official Reddit app.

But Reddit says supporting these high-use third-party developers is too expensive and the new policy is necessary to become a self-sustaining business. Despite the blackout this week, the company says it hasn’t changed course.

“Reddit is a city. “Resistance and dissent matter… The problem with this is that it’s not going to change anything because we’ve made a business decision that we didn’t negotiate with.”

But organizers say the blackout isn’t over yet. Nearly 9,000 subreddits went dark this week. Reddit currently has over 100,000 active subreddits. While some will return to their public settings after 48 hours, others say Reddit plans to remain private indefinitely until they meet their demands — which include cutting third-party developer fees, effective July 1, so popular apps don’t shut down. under.

As of Friday, more than 4,000 subreddits were still participating in the blackout — including communities with tens of thousands of subscribers like r/music and r/videos — a step Superintendent And a live Twitch stream of the boycott.

Most subreddit communities are still active, Reddit notes. While Huffman maintains that he respects users’ rights to protest, the subreddits currently participating in the blackout are “not going to stay offline indefinitely” — even if that means finding new moderators.

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The company’s response to the blackout has sparked further outrage among protest organizers, most recently after a move to replace moderators of protest subreddits.

“There’s a lot going on here… (Reddit) is burning goodwill with users. It’s a lot more expensive than trying to cooperate,” Omar, a moderator of the subreddit participating in this week’s blackout, told The Associated Press. Omar asked not to be named in this article due to security concerns while managing his subreddit.

Most people who visit Reddit don’t think about the API, but access to these third-party resources is crucial for moderators to do their jobs, experts note.

Sarah Gilbert, a postdoctoral fellow and research manager of the Citizens and Technology Lab at Cornell University, explains that API access helps moderators keep communities safe and “quickly respond to spam, bigotry and harassment.” Third-party apps are also important for screen readers, as people with visual impairments may not have access to the official Reddit app.

“Reddit is built on volunteer moderation labor, including building and maintaining many tools,” Gilbert said in a statement. “Without Reddit’s volunteer moderators, the site would likely see less useful content and more spam, misinformation and hate.”

Gilbert and Omar say the new policy could significantly jeopardize rater burnout and retention. Those effects may not be immediately felt, and may affect the content found on Reddit, which calls itself “the front page of the Internet.” With around 430 million active monthly users, Reddit is one of the best sites on the internet.

“The quality of content… will start to decline. And it’s not going to be something we see overnight,” Omar said. “It’s going to be something we see day in and day out … and we’re not going to notice it — until it’s too late.”

Reddit has pushed back on some of these concerns, saying that 93% of mod activity is currently taken via the desktop and native Reddit apps.

Huffman and Reddit management also note that the new fees will only apply to eligible third-party apps that require higher usage limits. According to metrics released Thursday by the company, 98% of apps will continue to have free access to the Data API as long as they are not monetized and remain below Reddit’s data-usage cap.

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The company has also promised that moderator tools and bots will continue to have free access to the data API and has struck deals with some commercial, accessibility-oriented apps to exempt them from the new fees. However, some appraisers say they rely on popular apps being shut down by new spending.

Apollo And Reddit is funnyFor example, they have already announced plans to close at the end of June.

While Reddit argues that the upcoming fees for high-use third-party apps are reasonable, at a rate of 24 cents per 1,000 API calls, others strongly disagree. Apollo developer Christian Selig estimated fees of about $20 million a year, for example.

Huffman pushed back on that estimate, but protest organizers and other developers say the fees are unsustainable — calling on Reddit to lower prices to keep third-party apps alive.

“We understand that Reddit needs to make some level of profit in order to exist… We’re not opposed to paying for the API. Prices have to change,” said Omar, who also pointed to frustration at learning about tariffs so quickly. Reddit first announced it would update its API access in April, but didn’t mention the price until May 31, a month before the July 1 launch date was given to developers and moderators.

It’s difficult to predict the total amount of money Reddit will save and earn after implementing fees for high-usage, third-party apps. But Huffman says the “pure infrastructure costs” of supporting these apps cost Reddit about $10 million each year.

“We can’t subsidize other people’s businesses,” Huffman said. “We didn’t ban third-party apps – we said ‘you have to cover your costs’ … we’re asking them to pay the same bills (these apps) as we do.”

The changes to Reddit’s API come as the San Francisco-based company looks to go public later this year. While Huffman couldn’t directly address the rumored initial public offering, he did underscore the need for Reddit to become spontaneous.

“I think every business ultimately has an obligation to make a profit — our employees’ shareholders, our investors’ shareholders, and one day as a public company, our user shareholders as well,” said Huffman, who co-founded the site in 2005. .

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Reddit first filed for an IPO in 2021, but put its plans on hold amid a slump in tech stocks. In view of the possibility of a renewed IPO in the second half of 2023, financial experts speculate that the company may try to show increased revenue and profitability to investors.

“My guess is that they feel strong pressure to show that they can generate revenue from other sources before the IPO,” Luke Stein, a professor of finance at Babson College, told The Associated Press — noting that monetizing the API could create another avenue. revenue streams rather than relying on advertising and new users as Reddit has done in the past.

Experts also pointed to Reddit’s importance as a way to pay AI companies that have historically used Reddit data to build large-scale and profitable AI models.

However, the IPO is uncertain and API changes may also have consequences.

“If they can really make changes, (they) can increase their revenue. On the other hand, if they alienate their best users, that can cause problems down the road, especially if those users decide to move to other platforms,” ​​said James Angel, an associate professor at Georgetown University’s McDonough School of Business. .

He added a big question, “Are there any other platforms that can really fit into the role that Reddit plays?” — points to similarities seen on Twitter following Elon Musk’s acquisition of the platform last year. Twitter ended free API access earlier this yearIncites anger.

Stein believes there will be more clarity in the next couple of weeks — based on seeing whether moderation and governance remain strong on popular subreddits after power users are disconnected from affected third-party tools.

“If engagement in some of the larger communities declines, or if the spam outbreak is less, and it looks like these communities may be moving to alternative platforms, investors will be very spooked,” Stein said. .

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