Reddit CEO assures employees that API pricing protests haven’t hurt revenue

Furor “will pass,” Huffman says in internal memo reportedly viewed by The Verge.

Scharon Harding – Jun 13, 2023 5:01 pm | 361

This, too, shall pass

Then, the note seemingly seeks to calm employee anxieties or fears around the protests by depicting the blackout as a temporary occurrence that hasn’t yet impacted Reddit’s finances:

We have not seen any significant revenue impact so far and we will continue to monitor.

There’s a lot of noise with this one. Among the noisiest we’ve seen. Please know that our teams are on it, and like all blowups on Reddit, this one will pass as well.

Some subreddits have said they will go dark indefinitely. As of this writing, 8,444 subreddits are protesting, according to the Reddark counter, which says 8,838 subreddits pledged to join.

Similar to how Twitter was accosted when it jacked up its API pricing in February, Reddit has been accused of corporate greed as it seeks to suddenly charge what some argue are exorbitant amounts for something that used to be free.

For its part, Reddit hasn’t been shy about its desire to make money, especially considering many popular third-party Reddit apps don’t run Reddit’s ads, its biggest source of revenue.

“Reddit needs to be fairly paid to continue supporting high-usage third-party apps. Our pricing is based on usage levels that we measure to be comparable to our own costs,” Reddit spokesperson Tim Rathschmidt said in a statement to Bloomberg on June 6.

News of Reddit’s initial public offering has drawn further attention during this spectacle, as The Information in February reported that Reddit aims to go public in 2023. Additionally, there’s a sense that Reddit is seeking greater control over its platform.

Huffman’s memo reportedly said that the long-term solution to challenges brought on by the protests is to improve Reddit and noted “a few upcoming critical mod tool launches we need to nail.”

Reddit recently started allowing NSFW image uploads on its desktop app but will remove NSFW content from third-party apps with its API changes, attributing the move to regulatory concerns. Reddit has also refrained from offering any compromise that would see lower API fees for developers that run Reddit’s ads.

Further, Reddit showed interest in growing the use of its apps when it experimented with blocking logged-in mobile browser access earlier this year.

Community consequences

Reddit might not have seen any financial consequences yet. But its announced API fees, the revelation that those fees would cost it $20 million a year for one third-party app, and the backlash from other developers, users, and moderators have shaken the Reddit community. It’s hard to quantify that impact, but a sense of community is why some people visit Reddit in the first place.

Huffman’s note, according to The Verge, said:

I am sorry to say this, but please be mindful of wearing Reddit gear in public. Some folks are really upset, and we don’t want you to be the object of their frustrations.

In an active Q&A on Friday, someone asked Huffman if he was concerned “that Reddit has become increasingly profit-driven and less focused on community engagement,” and his response didn’t foster a sense of community either.

“We’ll continue to be profit-driven until profits arrive. Unlike some of the 3P apps, we are not profitable,” Huffman said.

In Monday’s note, Huffman reportedly mentioned the planned closures of Apollo, Reddit Is Fun, “and a couple others,” and said, “We are still in conversation with some of the others.”

As some might have expected, the protests haven’t yet brought any sign of Reddit relenting on its API pricing. The company has given accessibility-focused apps exemptions, though.

“In this whole saga, I don’t think I’ve seen Reddit offer to give an inch on any of the things,” Apollo developer Christian Selig told The Vergecast podcast this week.

Advance Publications, which owns Ars Technica parent Condé Nast, is the largest shareholder in Reddit.