"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...
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.
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.
> 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.
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.
No thanks.
Good call out. It's like the business equivalent of:
You changed the rules of the game because you didn't like how I played. So I'm not even going to bother playing with the new rules. I retire.
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.)
- 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_.
The issue is that the actual numbers are closer to 2,000%, not 80%. [0]
[0]: https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_ca...
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.
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.
A text website is easy to run.
So ultimately they want 3rd party to use subscription model to ultimately get worse experience.
