Reddit, one of the most popular websites in the world, is facing a massive backlash from its users and moderators over its plan to charge for access to its data. Thousands of subreddits, the forums dedicated to specific topics on the platform, have gone dark for 48 hours or more in protest. Here is everything you need to know to make sense of the current situation.
What is Reddit and how does it work?
Reddit is a social media platform that allows users to post and comment on various topics, ranging from news and politics to memes and hobbies. Users can upvote or downvote posts and comments, creating a ranking system that determines what is popular and visible on the site. Users can also join subreddits, which are communities focused on a particular topic or interest. There are over 140,000 subreddits on Reddit, covering almost anything imaginable.
Reddit is also known for its culture of anonymity and freedom of expression, as users can create multiple accounts without revealing their identity or personal information. Reddit also relies heavily on volunteer moderators, who manage and enforce the rules of their subreddits.
Why do so many third-party apps exist?
Reddit has a public API (application programming interface), which is a software framework that allows other applications to access and use its data. Many third-party app developers have used Reddit's API to create alternative interfaces or features for Reddit users. For example, some apps offer a different design, layout or theme for browsing Reddit, while others offer enhanced functionality, such as offline access, notifications or filters.
Some of the most popular third-party apps for Reddit include Apollo, Boost, Relay and Sync. These apps have millions of users who prefer them over the official Reddit app or website.
What are the recent changes with regards to the API pricing?
In April 2021, Reddit announced that it would start charging third-party app developers for using its API from July 1, 2021. According to Reddit's new API terms, developers who require higher usage limits will have to pay $0.24 for every 1,000 API calls or less than $1 per user every month. API calls are requests made by an app to access Reddit's data.
Reddit said that the reason for this change was to prevent large companies from exploiting its data for free, especially for generative AI (artificial intelligence) purposes. Generative AI is a type of AI that can create new content based on existing data, such as text, images or audio. Reddit's data is valuable for training generative AI models, such as ChatGPT and Bard, which can mimic human conversations based on Reddit's comments.
Why is this bad news for third-party apps?
The new API pricing could make it impossible for many third-party apps to continue operating or offering their services to Reddit users. Some app developers have said that the fees are too high and unreasonable, given that they do not make any profit from their apps and only rely on donations or ads to cover their costs.
For example, Christian Selig, the creator of Apollo, said that his app would have to pay more than $20 million a year under the new API terms. He said that this would force him to shut down his app by 30th June 2023.
Many Reddit users and moderators have also expressed their support and appreciation for third-party apps, saying that they offer a better user experience and functionality than the official Reddit app or website.
What does any of this have to do with generative AI?
Generative AI is a type of AI that can create new content based on existing data, such as text, images or audio. Reddit's data is valuable for training generative AI models, such as ChatGPT and Bard, which can mimic human conversations based on Reddit's comments.
Reddit's CEO Steve Huffman said in an interview with The New York Times in April 2023 that he does not want to "give all of that value to some of the largest companies in the world for free". He said that he wants to protect Reddit's data from being used by generative AI without returning any value to Reddit's users.
However, some critics have argued that Reddit's decision to charge for its API is not motivated by protecting its data from generative AI, but rather by increasing its revenue and valuation. They have also questioned whether Reddit has the right to claim ownership over its data, given that it is generated by its users and moderators.
Where do Reddit's investors stand regarding this?
Reddit is a privately owned company that has raised over $1.3 billion in funding from various investors over the years. Some of its investors include Andreessen Horowitz, Sequoia Capital, Tencent and Vy Capital.
According to some reports, Reddit's valuation doubled to $6 billion after its latest funding round in February 2021, which raised $367.9 million. This was partly driven by the surge in Reddit's popularity and influence after the GameStop stock trading frenzy, which was orchestrated by a subreddit called r/WallStreetBets.
It is not clear how Reddit's investors feel about its decision to charge for its API and the resulting backlash from its users and moderators. However, some analysts have speculated that Reddit's investors may be pressuring the company to increase its revenue and profitability, as well as to prepare for a possible initial public offering (IPO) in the future.
If this protest continues, what does this mean for Reddit's business?
The protest by thousands of subreddits could have a significant impact on Reddit's business and reputation. Some of the subreddits that are participating in the blackout are among the most popular and active ones on the platform, with millions of subscribers and visitors. By going dark, they are depriving Reddit of a large amount of traffic, engagement and content, which could affect its advertising revenue and user growth.
The protest could also damage Reddit's relationship with its users and moderators, who are essential for its success and survival. Many users and moderators have expressed their dissatisfaction and frustration with Reddit's decision to charge for its API, as well as its lack of communication and consultation with them. Some have also threatened to leave Reddit or switch to other platforms, such as Voat or Ruqqus.
The current subreddit black out could also put pressure on Reddit to reconsider or revise its API terms, or to offer some concessions or alternatives to third-party app developers. However, it is not clear whether Reddit will be willing or able to do so, given its stated reasons and goals for charging for its API.
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