Reddit CEO Remains Firm on 3rd-Party App Charges Despite Protests

by Chloe Baker
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Reddit CEO

In response to widespread protest, Reddit CEO Steve Huffman asserts that the company is resolute and unwilling to negotiate on the issue of charging certain third-party developers to access the site’s data. This stance has led to numerous subreddits going dark as part of an ongoing demonstration.

Huffman acknowledges the importance of protest and dissent but believes that this particular protest will not result in any changes because it conflicts with the business decision made by Reddit. Protest organizers argue that the new policy jeopardizes the ability to customize the platform using application programming interfaces (APIs). Third-party developers heavily rely on API data to create apps that provide unique features, especially in terms of content moderation and accessibility aids.

According to Reddit, supporting these third-party developers is financially burdensome, and the implementation of the new policy is necessary to ensure the company’s sustainability as a business. Despite nearly 9,000 subreddits going dark initially, some have returned to their public settings after 48 hours. However, many subreddits remain private and plan to stay that way until Reddit addresses their demands, which include reducing charges for third-party developers set to take effect on July 1.

As of now, more than 4,000 subreddits continue to participate in the blackout, including popular communities like r/music and r/videos, as reported by a tracker and live Twitch stream monitoring the boycott.

While Reddit emphasizes that the majority of subreddit communities remain active, Huffman states that the subreddits participating in the blackout will not remain offline indefinitely, even if it means finding new moderators to replace those who are protesting. This response has further outraged protest organizers, who accuse Reddit of attempting to remove moderators of subreddits involved in the demonstration. Moderators, known as “mods,” volunteer their time and often use tools outside of the official app to maintain forum quality, making them dissatisfied with the new fees.

Reddit denies claims of removing moderators for protesting and asserts that it is merely enforcing its code of conduct. Experts point out that access to third-party resources, facilitated by APIs, is crucial for moderators to effectively perform their duties. Without volunteer moderators, Reddit could face a decline in helpful content and an increase in spam, misinformation, and hate speech.

Reddit counters some concerns by stating that 93% of moderator actions currently occur through desktop and native Reddit apps. Additionally, the new fees will only apply to eligible third-party apps with high usage limits. Thursday’s metrics indicate that 98% of apps will continue to have free access to the Data API, provided they are not monetized and remain below Reddit’s data-usage threshold. Moderator tools and bots will also maintain free access to the Data API, and agreements have been made with some non-commercial, accessibility-focused apps to exempt them from the new fees.

Nonetheless, some moderators rely on popular apps that plan to shut down due to the increased costs. Apollo and Reddit Is Fun have already announced their impending closure at the end of June, with Apollo developer Christian Selig estimating yearly fees of approximately $20 million.

While Reddit boasts over 500 million active monthly users worldwide and is among the internet’s top sites, the exact financial impact and benefits of implementing the new fees are challenging to predict. Huffman claims that supporting these apps costs Reddit about $10 million annually in infrastructure costs alone. He asserts that Reddit cannot subsidize other businesses and emphasizes the need for the platform to become profitable, especially in light of potential plans for an initial public offering (IPO) later in the year.

Though Huffman cannot directly address the rumored IPO, he emphasizes Reddit’s obligation to eventually generate profits for employees, shareholders, investors, and potentially users if it becomes a public company. Reddit initially filed for an IPO in 2021 but postponed the plans due to a decline in tech stocks. Financial experts speculate that the company may be seeking alternative revenue streams to demonstrate increased profitability to potential investors, rather than relying solely on advertising and new user acquisition, as it has in the past.

The outcome of the IPO remains uncertain, and the API changes could have implications as well. If Reddit successfully implements these changes, it could increase revenue. However, it also risks alienating its most dedicated users, potentially leading them to migrate to other platforms.

Frequently Asked Questions (FAQs) about Reddit, protests, 3rd-party app charges, CEO, alienation

Q: Why is Reddit charging third-party app developers for data access?

A: Reddit states that supporting third-party developers has become financially burdensome, and charging fees for data access is necessary for the platform to become self-sustaining as a business.

Q: What are the implications of the protest against Reddit’s new policy?

A: The ongoing protest has led to numerous subreddits going dark, affecting user access to certain forums. The protest aims to challenge Reddit’s decision to charge third-party developers, which could impact platform customization and the availability of certain app features.

Q: How does Reddit justify its stance on the protest?

A: Reddit’s CEO, Steve Huffman, acknowledges the importance of protest but asserts that the company made a business decision and is unwilling to negotiate. The company maintains that the new fees are necessary to cover costs and ensure sustainability.

Q: Are moderators being removed for participating in the protest?

A: Reddit denies claims of removing moderators for protesting and states that it is enforcing its code of conduct. The company suggests that if moderators abandon a community, new moderators will be found to maintain engagement.

Q: How will the new fees affect third-party apps?

A: Third-party apps that require high usage limits will be subject to the new fees. However, according to Reddit, 98% of apps will continue to have free access to the Data API if they are not monetized and remain below Reddit’s data-usage threshold.

Q: What impact could this have on Reddit’s IPO plans?

A: Reddit has reportedly paused its IPO plans previously but is speculated to be preparing for a renewed IPO. Monetizing APIs could be seen as an additional revenue stream, potentially boosting Reddit’s revenue and demonstrating increased profitability to potential investors.

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