It's really confusing. He wants Reddit to pay $10 million so he isn't "loud" with API usage? He wants them to buy and takeover the app? He's wants a payment to shutdown? Is he even serious about any of this? I get the impression he lacks the confidence to ask for a $10 million acquisition, so instead he approaches the subject casually as a joke, and the entire conversation spirals into confusion due to the lack of clarity.
Either way, that's not a great deal for Reddit. They might as well charge the $20 million, and if he can't find a way to pay it then Apollo shuts down and the majority of users return to the official Reddit site/app for free. There's no benefit to paying $10 million.
The call was a failure between the two parties and likely destroyed any future negotiations. I think the best suggestion was from another user here. Only allow Reddit official subscribers to use third party apps. Reddit can charge users whatever they want, and app developers can monetize their apps however they choose.
Your first sentence misrepresents what the Apollo dev said. Actually, it's the exact same misrepresentation that the Reddit CEO knowingly made in public.
First off, it's abundantly clear that the Apollo dev wasn't actually demanding money. It was a pointed statement that revealed the CEO wasn't being honest about the costs.
The CEO, in contradiction with publicly available data, claimed that Apollo was costing Reddit $20 million per year in lost opportunity. So the dev jokingly offered to sell Apollo for half that price. Then Reddit would be able to recoup the cost in half a year and gain an additional $20 million yearly. What a great deal, right? Except they both knew that the $20 million price tag was complete bogus.
I disagree, I think the Apollo dev would have happily taken the $10 million.
> Then Reddit would be able to recoup the cost in half a year and gain an additional $20 million yearly. What a great deal, right? Except they both knew that the $20 million price tag was complete bogus.
The $20 million price is irrelevant here. Reddit doesn't need to pay to acquire these users. They are Reddit users (they're registered there, and Reddit knows everything about them). They can close down Apollo and they'll get almost all the users back for free.
If Apollo had a standalone community, then it's easy to calculate the value of a user, and a fair price for acquisition. But, that's not the case here.
Don't take this the wrong way, I'm not siding with Reddit and I think both sides are losing here due to their poor management.
That doesn't mean he was demanding money.
> If Apollo had a standalone community, then it's easy to calculate the value of a user, and a fair price for acquisition
I do agree it's difficult to calculate the value of a user in this case.
Yes, Apollo users are Reddit users, but they are specifically Reddit users who don't use Reddit's official clients. The question is how many of those users will move to Reddit's official app after June 30, and how many will look for alternative platforms that aren't so manipulative and abusive. I for one have deleted my Reddit account and won't be going back.
Further I wouldn’t be trusting a hot take from ~100 points GuestXXXXXX at this point of the PR dumpster fire cycle.
https://old.reddit.com/r/ModCoord/comments/143rk5p/reddit_he...
> Apollo threatened us, said they’ll “make it easy” if Reddit gave them $10 million.
I think you underestimate the fallout here.
Those were the people using Apollo in the first place.
Apollo has no leverage here unless there is strong evidence most of the Apollo users will leave Reddit if the app shuts down. I don't believe they will. The other potential leverage is the upcoming subreddit blackouts, or hinting at taking the Apollo users to start a competitor. The developer said they are not going to build a competitor (that was a mistake, they shouldn't have revealed that card), so I think the blackouts are the only chance of lowering API costs.
Not sure how people are misunderstanding him, he literally said he was joking… He knows it’s not a great deal for Reddit. His whole point is that the app isn’t actually worth $20 million a year, which is what they want him to pay. It’s not even worth $10 million. Not to him or Reddit or anyone else.
Right now there seems to be two options on the table.
1. The Apollo dev pays $20 million per year for API access.
2. Apollo shuts down and the users return to the official Reddit website/app for advertising.
If Reddit is refusing to lower their API pricing, doesn't this mean the users are worth $20 million? If the users were worth $1 million, then why wouldn't Reddit charge $2 million for the API and double their income on those users?
That being said, something else must be at play here. The users are not worth $20 million and Reddit refuses to take anything less than $20 million. If I had to guess, they want to boost metrics before going public and are willing to take a hit to their reputation to do so.
It’s the same reason I don’t use instagram—seeing an ad every two images bugs the crap out of me. The difference with Reddit is there was a nice third party option.
1) ok so, according to you I’m costing you $20M/year in API load
2) How about you pay me $10M which is 6 months of your cost, and I turn off the $20M/year burden immediately.
3) you make your money back in 6 months and within a year are up $10M
The problem is Apollo does not cost Reddit $20M/year lol
Him not rabble rousing their user base against them would have been the benefit.
