> Is this going to turn out like Twitter with a huge purge of Reddit staff too
Let's be serious, Reddit making a profit will decrease the likelihood of massive layoffs. I suspect if Reddit backs down in this protest drama they will be forced to do layoffs to become profitable instead of becoming profitable from making more revenue instead of reducing costs.
> As an employee do you support the blackout secretly?
Well considering the internal memo got leaked, I think there must be someone who supports it.
To date I've seen no logic that shows how any of reddit/spezs actions will actually increase profit.
Making a wild claim about how much 3rd party apps "cost them", is not the same as actually seeing revenue once those 3rd party apps are closed.
As most people have been saying, the majority of 3rd party app users are the more advanced technical savvy ones.
There may be SOME percentage of the 3rd party app users who transition, but if the 3rd party traffic is as trivially small as Reddit has claimed, not sure how that will overnight magically transform them into being profitable.
I've never seen an Ad on reddit with use of old.reddit.com , RES, and adblockers. I was a primary user of Apollo, and I certainly won't be using the reddit mobile app. I deleted the app off my phone once the writing is on the wall (rip the bandaid off now and detox vs in 9 days), my phone reported my usage is down 19% this week, so that is a plus.
Absent any business plan on how those actions will actually drive profit, everything they've done has had sole effect of alienating their power user, mods, etc. and I don't see how that helps profit.
> There may be SOME percentage of the 3rd party app users who transition, but if the 3rd party traffic is as trivially small as Reddit has claimed, not sure how that will overnight magically transform them into being profitable.
he said 97% of users are on the reddit app. he also said there is a significant opportunity cost to having those 3% of users not on the app. so for both of those statements to be true that 3% of users must be very active and providing a lot of content and value.
And he’s alienated virtually all third-party apps, putting those 3% user at high risk of just leaving the platform, destroying that supposedly huge opportunity cost.
A competent CEO would have found a way to keep them in the family.
If the speaker was setting out to bullshit you, "significant opportunity cost" could mean a lot of things.
Perhaps they mean a non-financial opportunity cost, like they could modify their API if they didn't have third parties depending on it, and they're missing out on the benefits such modifications might hypothetically provide.
Or perhaps "significant cost" means, say, $100k per year. Significant at a human scale, insignificant at the scale of a multi-billion-dollar company.
> I've never seen an Ad on reddit with use of old.reddit.com , RES, and adblockers.
Which is why they're trying to force everyone onto their first party app. If you're not contributing to revenue they do not want you on the site.
They have much more data than we do which leads me to think they have reason to believe most third party app users will switch/the ones that won't arent worth having anyway.
I think this is just pure arrogance. Some of the best content creators on the planet aren't technical. In fact, very few of technical people are good content creators. We just like to think we're so good.
Reddit doesn’t like to remember it, but it’s fundamentally a site where users provide content, and only a small fraction of users provide the most popular content (and do moderation). Those fraction tend to be the more advanced users that use things like third party apps or RES. So hurting those users is decreasing the amount of free work that the users give to Reddit, which means that either the site decreases in quality (less revenue) or Reddit needs to pay employees to do the same work (higher costs).
The cost of the third party apps themselves was trivial, and if they just wanted to recoup those costs they could have proposed a much more reasonable cost per user for third party apps.
That’s what they wanted to charge - Reddit only makes $0.13/user/mo, so their cost must be less than that (or else Reddit has much bigger problems), so let’s say $0.05/user/mo. Apollo has 2 million users, so $1.2 million per year.
Moreover, at that cost, less than a dollar per user per year, Apollo could have instituted a $1/year subscription. But instead Reddit wanted over $100 per user per year, two orders of magnitude more than the cost.
This is rather limited thinking though. The value of the platform is ultimately in it's content, and if those 3% of users on 3rd party apps are highly influential in driving content, then by driving them away you will harm overall value.
It's one of those typically short sighted "oh lets remove this thing costing us" without understanding the long term impact to value.
It's kind of interesting though because a lot of people using 3rd party apps have proven they are willing to pay for a good experience (Apollo had a subscription I think, RIF has a paid tier, etc...). So instead of charging apps for API access, just require all access through a 3rd party app require authenticated users, and those authenticated users must pay a monthly fee to use third party apps.
You don't over burden one single entity with large recurring payments (the app developers themselves), your power users provide revenue, and you can slowly work on your value proposition of "hey we have updated our app to not be as crappy, you can browse reddit for free if you switch back".
> To date I've seen no logic that shows how any of reddit/spezs actions will actually increase profit.
I think you assume that the only people using it are shutting down while obivously there are lots of profitable companies using the API who will obivously be fine with paying $0.24 per 1,000 API requests.
Then there is obivously OpenAI and other AI based companies that are really the main reason for the change.
Realistically, having Apollo, etc not there drives people to use the main app. Saying that people won't switch over seems naive. There will be some that won't be realistically the vast majority probably will. And those users then go back into monetization drives. Which will increase revenues.
> Let's be serious, Reddit making a profit will decrease the likelihood of massive layoffs.
I feel like this implies a couple of things:
1) A business is ever satisfied with their current profit margin. I'm not sure that's the reality.
2) Company profits going one way or the other affect a company's decision to perform layoff rounds. While maybe partially true, I think all the major tech companies performing layoff rounds has proven this to be mostly untrue.
If you're going to IPO you need to show growth. It's the most important thing. Realistically, making a profit isn't such a big deal if you have a solid plan and are growing. If they can't show that they are able to reign in Reddit users, who are by far the biggest problem for monetization of the platform, then they need to show they're able to get growth other ways. That would be growth in profits.
> If you're going to IPO you need to show growth. It's the most important thing.
I think you're in a chicken and egg situation here. The reason you want to see growth is because as an investor you suppose growth is a good indicator for future profits. So the most important thing is actually still... profits.
Yet some how for-profit companies become more valuable when they just grow their user base.
You seem to be applying basic logic to company valuations while at the same time you probably also understand the finical market is completely fucked up. Amazon lost money for god only knows how long and was extremely valuable and sought after investment for nearly the entire time. Why? Because growth. They don't care what kind of growth they just want growth. While a sane person would say the growth should be in money so they could eventually be profitable, that's not how the markets work.
So they can either show growth in the fact they're growing their customer base to include API customers and revenue streams. Or they can show growth in profits.
Right, and what’s the end goal of growth? Why do companies and shareholders want to see growth? What does growth of API consumers potentially lead to? Let me make it simpler: why did Reddit start charging money for their API?
Let's be serious, Reddit making a profit will decrease the likelihood of massive layoffs. I suspect if Reddit backs down in this protest drama they will be forced to do layoffs to become profitable instead of becoming profitable from making more revenue instead of reducing costs.
> As an employee do you support the blackout secretly?
Well considering the internal memo got leaked, I think there must be someone who supports it.