Let’s be frank: Reddit absolutely has the right to charge for their API. But the consequences of them charging for the API is that moderators are choosing to no longer use the platform. And they will have to ask themselves whether they will make more money from charging for the API than they will lose from people not using the product.
Here’s a good metaphor:
Imagine a convention center [Reddit] with an infinite number of conference rooms for conventions. There are big rooms for big conventions (r/aww) small rooms for small conventions (r/poker) and very small rooms for very small conventions (r/LeonardNimoyIsSecretlyBansky).
The convention center had this business plan: They would let anyone set up a convention at their convention center, for free. Because it’s free, lots of people would hold conventions there, and they could sell advertising on the walls and in the rooms. Heck, it was even a great idea, as companies could target specific conventions that they wanted to advertise to.
Now, the thing about this plan was that it was such a good idea that it quickly ran into some problems. Convention organizers [mods] had problems with people coming into their conventions to try to sabotage it, make trouble, provoke people. Additionally, the convention center itself was okay, but didn’t have a lot of access for the disabled.
The convention center, however, gave the organizers a set of tools [the API] which they could use to provide security, management, etc. They weren’t perfect, and left a lot to be desired, but by using those tools, the organizers could keep their conventions more or less chugging along without it turning into a full-time job. (Though maybe it was still a part-time job!) They could build out ramps for wheelchairs, braille stations for the blind, and improve the user experience: maps so that people wouldn’t get lost, summaries for late developers, reminders for important events, etc.
Now, not everyone used those tools for selfless reasons. A few big companies [Microsoft/OpenGPT & other AI companies] used those tools that made the convention center easy to access, and they went around and learned a lot about the conventioneers and they used that information to make money.
Cut to today, and the convention center isn’t making as much money as they hoped they would. They want to find another source of revenue since advertising isn’t enough.
So they said: Hey, we give away the tools that big companies use to make money. We should charge those big companies to use those tools, or we can take them away.
And what they did was charge everybody who had been relying on those tools. Not just the big companies (who I don’t think anyone would mind if they paid a fee) but also the convention organizers and the people who made handicapped ramps. And they charged them all the same rate.
Well, since the convention organizers can no longer organize their conventions without those tools, and they can’t afford the price that the convention center was charging for the tools, then they did what was reasonable: they shut down their conventions [the blackout].
Which presents a problem for Reddit, because if there are less convention organizers, there are less conventions, which means less convention goers, which means that they sell less advertising on the walls.
Up until this point, this is simply a miscalculation on the part of the convention center. The convention center has options - they could say: “You need to run a convention to get the tools for free, and only then you can use it on YOUR convention.” Or: “Everyone can use the tools for free - enough to organize a convention or two, but if you use it a whole lot, like you’re a big company gathering conventoneer data, you have to pay for it.”
There were ways to make this work out okay.
But instead, what the convention center decided to do was stick with the original idea to charge for the tools at the original price. When they did that, they decreased the value of the convention center, because now, not everyone could operate a convention there.
This is just business. When price goes up, demand goes down. And maybe some bean counter at the convention center figures they can make more profit by charging more for the API than the revenue they lose from advertising.
But it’s extremely callous, and downright idiotic in any industry to demand that people buy and continue to use your product at the price you set, when they don’t want to.
“These people who are mad, they’re mad because they used to get something for free, and now it’s going to be not free” – Steve Huffman, [https://www.theverge.com/2023/6/15/23762868/reddit-ceo-steve-huffman-interview](Source: The Verge)
Let’s be frank: Reddit absolutely has the right to charge for their API. But the consequences of them charging for the API is that moderators are choosing to no longer use the platform. And they will have to ask themselves whether they will make more money from charging for the API than they will lose from people not using the product.
Here’s a good metaphor:
Imagine a convention center [Reddit] with an infinite number of conference rooms for conventions. There are big rooms for big conventions (r/aww) small rooms for small conventions (r/poker) and very small rooms for very small conventions (r/LeonardNimoyIsSecretlyBansky).
The convention center had this business plan: They would let anyone set up a convention at their convention center, for free. Because it’s free, lots of people would hold conventions there, and they could sell advertising on the walls and in the rooms. Heck, it was even a great idea, as companies could target specific conventions that they wanted to advertise to.
Now, the thing about this plan was that it was such a good idea that it quickly ran into some problems. Convention organizers [mods] had problems with people coming into their conventions to try to sabotage it, make trouble, provoke people. Additionally, the convention center itself was okay, but didn’t have a lot of access for the disabled.
The convention center, however, gave the organizers a set of tools [the API] which they could use to provide security, management, etc. They weren’t perfect, and left a lot to be desired, but by using those tools, the organizers could keep their conventions more or less chugging along without it turning into a full-time job. (Though maybe it was still a part-time job!) They could build out ramps for wheelchairs, braille stations for the blind, and improve the user experience: maps so that people wouldn’t get lost, summaries for late developers, reminders for important events, etc.
Now, not everyone used those tools for selfless reasons. A few big companies [Microsoft/OpenGPT & other AI companies] used those tools that made the convention center easy to access, and they went around and learned a lot about the conventioneers and they used that information to make money.
Cut to today, and the convention center isn’t making as much money as they hoped they would. They want to find another source of revenue since advertising isn’t enough.
So they said: Hey, we give away the tools that big companies use to make money. We should charge those big companies to use those tools, or we can take them away.
And what they did was charge everybody who had been relying on those tools. Not just the big companies (who I don’t think anyone would mind if they paid a fee) but also the convention organizers and the people who made handicapped ramps. And they charged them all the same rate.
Well, since the convention organizers can no longer organize their conventions without those tools, and they can’t afford the price that the convention center was charging for the tools, then they did what was reasonable: they shut down their conventions [the blackout].
Which presents a problem for Reddit, because if there are less convention organizers, there are less conventions, which means less convention goers, which means that they sell less advertising on the walls.
Up until this point, this is simply a miscalculation on the part of the convention center. The convention center has options - they could say: “You need to run a convention to get the tools for free, and only then you can use it on YOUR convention.” Or: “Everyone can use the tools for free - enough to organize a convention or two, but if you use it a whole lot, like you’re a big company gathering conventoneer data, you have to pay for it.”
There were ways to make this work out okay.
But instead, what the convention center decided to do was stick with the original idea to charge for the tools at the original price. When they did that, they decreased the value of the convention center, because now, not everyone could operate a convention there.
This is just business. When price goes up, demand goes down. And maybe some bean counter at the convention center figures they can make more profit by charging more for the API than the revenue they lose from advertising.
But it’s extremely callous, and downright idiotic in any industry to demand that people buy and continue to use your product at the price you set, when they don’t want to.
Full stop.