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Just realized the lie about reddit api pricing (kbin.social)
submitted 1 year ago by abff08f4813c@kbin.social to c/RedditMigration@kbin.social
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So it's well known now that the developer of Apollo estimated the new API pricing would cost $20 million a year. For a source, see the title of https://www.theverge.com/2023/5/31/23743993/reddit-apollo-client-api-cost

But from https://apnews.com/article/reddit-blackout-steve-huffman-ceo-api-0a4f7b344ecfbf50c924b030c344c55e the price from supporting third party apps is $!0 million a year. And presumably this is all third party apps combined!

Huffman says the “pure infrastructure costs” of supporting these apps costs Reddit about $10 million each year.

Something's very not balanced here. That one app would have paid for Reddit's third party infra costs twice over.

I can not remember which ones now (can anyone help me out here actually?), but I think a few apps said they'd try to make it work with the new pricing.

Which means Reddit likely stands to make a huge pot of money once the new API changes take effect, in the short term.

Even if Reddit loses the best subs, the best communities, the best users, and the moderation goes to where the sun don't shine, I could see that new revenue boosting investors confidence enough to lead to a successful (if slightly smaller) IPO.

If Reddit goes downhill and loses lots of value afterwards, well, spez has already made his quick buck, so I doubt he wouldn't feel very sentimental about it.

Folks, please explain to me why I'm wrong. Please.

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[-] lightingnerd@kbin.social 44 points 1 year ago* (last edited 1 year ago)

Here's the biggest factor in all of Spez's deceit, Apollo is an afterthought. 3PAs are smaller businesses, and I'm betting that he didn't want to outright make enemies of industrial giants like Microsoft and Google (that would be incredibly stupid), so my guess is that Spez is running with the whole claim that he doesn't want to subsidize the profits of 3PAs to avoid pissing off the people who could ruin him. However, in no unclear terms, he wants to convert his biggest API users, the ones who demand dedicated server pools, into income streams. He wants to sell our content, as his own:

Huffman said Reddit's back-end infrastructure includes separate server pools solely dedicated to handling the scraping that Google and Microsoft do from Reddit every day.

"Reddit represents one of the largest data sets of just human beings talking about interesting things," Huffman said. "We are not in the business of giving that away for free."

https://www.npr.org/2023/06/15/1182457366/reddit-ceo-steve-huffman-its-time-we-grow-up-and-behave-like-an-adult-company

[-] Joe091@kbin.social 3 points 1 year ago

He doesn’t intend to make money off of the third party apps. If he did, he could have set a reasonable price. He wants to shut them down so he doesn’t have to worry about them and to force people on to their app. Few, if any, 3rd party apps will ever pay the advertised price, so it will be peanuts if not literally zero as a revenue stream. The strategy is to get all users on Reddit-owned properties, be it the website or app or whatever else they may come out with.

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this post was submitted on 17 Jun 2023
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