I can’t wrap my head around this, it seems so bizarre. The only reason I’m here now is because I joined Apollo right after Reddit changed its app to remove the sort by rising feature. It completely changed my experience on the app for the worse and I sought out an alternative, and I know I’m not the only one that had this complaint. I was a faithful Reddit user/poster on the official app for 6 years until just a few months ago. Why would they make their app less user friendly a few months before announcing the crazy API changes. They drove me away from their app and then drove me away from the site altogether.
Anyone have any thoughts on this? It just makes no sense to me
To start, I don’t agree with what Reddit are doing. However, to play devil’s advocate, the company is losing money. They’re not profitable. What if Reddit had to declare bankruptcy due to it? How do you propose they make money? Asking for donations? Even with offering Reddit Gold, or whatever pay-for entitlements, they aren’t profitable.
ChatGPT is seemingly making a lot of money off of comments on Reddit, and Reddit are giving them that data for free. It makes sense, to me anyway, to charge OpenAI, Microsoft, et al., for access to that data. It seems third party app users were caught in the crossfire. Perhaps that was a lack of foresight, but perhaps it was a calculated (albeit incorrect) risk.
I know literally nothing but what the everlovingfuck are their costs? Most content (all until their shitting hosting site) is just aggregated to the site. All this content is free, moderation is free and theyre making ad money. Sure ads for reddit are probably super shit but its something. My best guess is its going to greedy little pig boy?
They increased their staff from around 700 to over 2000 in the last year or so, and their constant drive to turn from a link aggregate to a social media & hosting platform for every reposted image and video imaginable really hasn’t helped either. Both of which probably have been done exactly to not be profitable, because then they have to pay taxes, instead the idea is to grow your value as far as it can go while bleeding investor money - last year Reddit was “valued” at 10 fucking billion - and then you sell it to some idiot and cash out. This whole API thing was also part of that plan, to gather everyone to their official site and apps to show advertisers how massive their reach is.
But because Spez is an idiot, he fucked it up.
Server and maintenance costs my guy. They’re like a top-10 site on the internet at worst. That’s a lot of infrastructure and people to keep on staff to keep it running, just from a dev perspective. Those costs are probably very high; and add on keeping the specialized staff, costs go up quick.
Obviously this is exacerbated by the rest of their business though; they have plenty of other staff members and probably some wild exec structure.
They have 2000 employees. According to levels.fyi they’re paying mid-level software engineers $300,000 a year. Even if you assume their average employee salary is only $100,000 a year, that’s $200 MILLION dollars a year on salaries.
I absolutely guarantee that is way, way, way higher than their server costs.
Reddit claims to be losing money, but they made half a billion dollars in 2021. (the last year that any data is available)
They’ve also done about $1.3 billion in fundraising over the years, ($400 mill in 2021) which is a lot of debt to take on…
So what I think is happening here is that they want to cook up the books for their IPO, that and spez seems to be in love with how Musk is handling Twitter, specifically Musk’s cost-cutting measures. (cost cutting means short term stock price bumps, because the books look a bit better, after all, just look at how much money is available after you fire half the company)
It’s a complete pump to get the IPO starting value as high as possible and will subsequently dump soon after going public as they cash out
Spez and Co are complete business and culture morons
The issue was never charging for the API, it always started off as the insane price, the lack of communication, and the timetable for these changes.
Then it became all about u/spez’s behavior. Most of the subreddits were going to do just a two day blackout but his actions really made people realize what a piece of shit he is.
The only way their move makes sense to me is to push people into using the official app so that they can collect usage metrics and sell that data or use it to better position/sell ads.
3rd party apps did not get caught in the crossfire… reddit very specifically targeted them and has crafted the chatgpt narrative as a scapegoat. Chatgpt got the info they needed already reddit won’t see a dime and knows this. What reddit wants is everyone on their app and thats their prerogative… I doubt they expected the backlash from longtime and even newer user, they probably anticipated some pushback from devs and maybe mods but this blew up in their face and rightly so… ugh I’m a bit sensitive over this sorry reddit was a home for me through 3rd party apps for a looooong time and I’m a tad upset over it.
Is there proof that they’re not profitable? I ask because the only place I’ve heard that is when spez has parroted it on interviews. But I question the reality of that because how else would they be in operation for 15 years if they weren’t able to make any profit or were operating at a loss? It just doesn’t make sense.
Granted - I’m not saying they shouldn’t charge for the API access, but I’m curious what their real numbers are.
IMO there is nearly no chance that they are profitable, given how hard they scaled up hiring after getting that fidelity funding in 2021. They were massively overvalued and I’m surprised Fidelity only cut their valuation by 40%.
I can’t imagine what they’ve done that would have actually brought in revenue. Ads and awards sure, but new reddit, the 1p app, etc are all garbage. Revenue per employee must be in the shitter.