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How Reddit's Money Move Might Accidentally Create Its Biggest Rival

Is Reddit’s Monopoly on the Brink? Discover how an upset community revolt might destroy reddit as we know it, as Redditors contemplate creating their own alternative platform.
Updated June 14, 2023
reddit app war
reddit app war

In the digital era where social media platforms dictate the narrative, Reddit, known as the ‘front page of the internet,’ finds itself amidst a brewing storm.

A large section of Redditors, incensed by the platform’s decision to raise API prices, thus eliminating third-party apps like Apollo, have plunged Reddit into a temporary blackout.

The 48-hour blackout, however, is a meek protest. Entrepreneur Shaan Puri has ignited the imagination of the online community by suggesting an audacious alternative: A new platform that challenges Reddit at its own game.

The Heart of the Matter

Redditors are disenchanted with Reddit’s decision to annihilate third-party apps which have been adored by moderators and power users alike for YEARS.

Apollo, developed by Christian Selig, is one such indie project that allowed for enhanced user experience. Reddit’s price hike in API means that developers like Selig would have to pay exorbitant amounts, making it unsustainable to keep the apps afloat.

Reddit justifies this move by citing API calls costing them "tens of millions" per year. As Reddit eyes an IPO, being profitable is on top of its agenda. Take that as you wish.

A Muted Protest?

While the Reddit community has shown its solidarity in protest with over 8,000 subreddits going dark, it seems that Reddit is not budging. The planned API pricing changes are set to be implemented on July 1, and according to a Reddit spokesperson, the company has no plans to revise these changes despite the ongoing protest.

The protest specifically targets the pricing changes for application programming interfaces (APIs) which are crucial for third-party apps such as Apollo and Narwhal.

These apps provide alternative interfaces for millions of users to browse Reddit. One of the changes includes charging third-party app developers $0.24 for every 1,000 API calls, a cost that is integral to the services provided by these apps.

Apollo creator Christian Selig mentioned that the change would impose an astronomical cost of $20 million a year on him and his team. That's insane.

Despite this, Reddit's administration seems unfazed. An internal company memo leaked by The Verge mentioned that the blackouts haven’t had a significant revenue impact, and the company believes that the protest will eventually pass.

As a further sign of discontent, third-party apps like Apollo, Reddit is Fun, and Sync all plan to shut down their services on June 30 due to the new policies.

While the initial protest was planned for 48 hours, there’s uncertainty as to when it might actually end. Some subreddits have gone dark until June 14, while others have vowed to continue the protest until Reddit considers revising the changes.

A post on r/Save3rdPartyApps mentioned that the two-day blackout is just the beginning, and if Reddit doesn’t budge by June 14, the community will employ further actions.

In defense of the changes, Reddit’s co-founder and CEO Steve Huffman stated in a post and an AMA (Ask Me Anything) session that the API changes and pricing updates are necessary for Reddit to operate as a self-sustaining business.

According to Huffman, Reddit can no longer afford to subsidize commercial entities requiring large-scale data use, which is costing them millions in hosting fees. He stated that the new pricing structure is based on usage levels comparable to company costs.

It's important to note that this protest is a culmination of dissatisfaction that began brewing since April, when the API changes were first introduced. The protest gained momentum this month with popular subreddits like r/Apple, r/gaming, r/Music, r/sports, and others going dark.

This means tens of millions of Reddit users are currently unable to interact with these pages.

In an environment where the company appears indifferent and is determined to move ahead with its plans, the community’s response might need more than just going dark. This raises the question of whether alternative forms of protest or even the creation of alternative platforms might be the next steps for this impassioned community. Only time will tell how this standoff evolves.

Voice or Exit?

Puri channels a concept put forward by Balaji Srinivasan in his talk, “Voice or Exit”. He argues that a protest (voice) is worthless if it isn’t backed by the potential to exit. He challenges the community to build an alternative to Reddit.

His idea? Create a clone of Reddit called Spezless.com, named after Reddit CEO Steve Huffman, whose username is u/Spez. It’s Reddit without the CEO, a middle finger to the establishment. The twist is to make it non-profit where 10% of revenue goes to the organization, while 90% is distributed amongst users and moderators.

The Power of the Community

This proposition recognizes that Reddit is built on the backs of tens of thousands of volunteer moderators. Whereas companies like Facebook spend close to $300 million a year on content moderation, Reddit spends next to nothing. Messing with this fiercely passionate community might be a perilous game.

The new platform should at least be a viable threat to exit. If an alternative gathers enough momentum, it could cause a sizable dent in Reddit’s user base.

So, What's Gonna Happen?

Whether Spezless.com takes off or remains a fanciful idea, this episode underscores the power of community and the need for platforms to understand and respect the stakeholders that propel them forward.

This revolt has laid the foundation for a dialogue. It’s now up to the Reddit community to decide whether they want to create an alternative ecosystem or work within the confines of an evolving behemoth.

Either way, the internet will be watching.

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Written by Justin Gluska
Justin is the founder of Gold Penguin, a business technology blog that helps people start, grow, and scale their business using AI. The world is changing and he believes it's best to make use of the new technology that is starting to change the world. If it can help you make more money or save you time, he'll write about it!
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