this post was submitted on 18 Jun 2023
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Yes, Reddit is a big dataset and yes, Reddit deserves to make some money off that if other organisations are going to scrape that data, for AI or anything else.
That's what they should be blocking and monetizing. Not those few users using 3rd party apps. Those folks (posters, mods) are amongst the ones creating that data set for Reddit, free of charge.
They are right about needing to make money to continue as a successful business. But they are doing it the wrong way and alienating their key assets.
Which is why I'm here :)
If they want organizations not to scrape their content, tough toenails; stopping them is impossible.
It's especially impossible to stop Google and Microsoft from doing it, because they already have a search index full of said content.
Spez is alienating his loyal user base for nothing.
Yeah they could have left current large 3rd party apps alone and said any new API connections from AI companies and etc will be charged 20 million dollars a year..
That wouldn't work either. They'd just scrape the HTML, feed that to the AI, and not pay Reddit one rusty cent. Even I could implement that, let alone a billion-dollar AI company with an army of top-notch programmers.
Why does reddit deserve to make profit from content made by others? They are service provider - they are not entitled to the work of people who used their service.
Ok. I'm about to abandon an account that's 17.5 years old. I despise what reddit is proposing.
But, honestly, how do you propose they turn (some) profit so it could last forever? Losing money isn't a long-term recipe for success. I've got no problem with reddit seeking to profit. I've got a problem with their short notice and their refusal to let third party clients be part of the ecosystem they wish to create.
First I don't see why reddit has to be a for profit organisation in the first place, since that's kind of the rout of the problem. Users becoming a product that reddit is trying to sell to advertisers. At the same time if reddit would be respectful to users, creators and mods it would be a different story. But they are clearly not, they don't respect the people who are making reddit work - but feel entitled to the fruits of their labor. That just irks me on a deeply personal level.
My main problem is not even with the API decision but with the way the CEO communicated with the community.
COMPLETELY agree that reddit shouldn't have developed in a commercial direction, but rather as a non-profit. That would avoided so many problems. That said, even as a non-profit losing money is not tenable.
I also agree that how the CEO communicated is a big part of the problem.
Do we know they are losing money? Do we even know they are not making money? It is more likely that they are not making enough money to satisfy the stock holders and give big payouts to the principles.
Generally an organuzation does not need to make money to stay in business. They do however need a positive cash flow and assets need to exceed liabilities generally or at least by enough creditors will not force bankrupcy. So profit is entirely optional. However for a typical stockholder company the profit expectations are unlimited.
Well they've said they're "not profitable".
Sure, but companies play very free and loose with the definition of "profitable". Amazon and youtube have both also been said to be unprofitable, but both blatantly make a lot more than they spend. They just do shit like reinvest all profits into expanding the business or paying the board.
And capitalism, as it is now, is set up to demand increasingly more profits each year unto infinity - a flat, steady income for the company and its employees and board members is still seen as a failure. A company can be profitable (as in, made way more money than it spent), and they'll still say it's floundering if it didn't make more profits than the previous year.
Companies are also currently raising prices and claiming they have to because of supply chain problems and inflation, while also making record profits.
And after all that has happened, you'd take what they say at face value? I certainly would not. I take "not profitable" to mean not as profitable as they would like to be to support whatever valuation they are targeting. As far as I know I've not heard that their cash flow is negative. It is negative cash flow that puts companies out of business and is the serious thing.
If I understand correctly they currently don't have investers currently since they made this move as part of their attempts to take the company public, so there's even less of an excuse.
They are a private company, not a public one. That does not mean they do not have investors. They have investors but they are privately held and probably private equity investors. I do not know exactly who or what investor groups own Reddit, but since it is a company it has investors.
Like I said, I would not have problem wit a mythical commercial reddit making money but respecting the user base. Even less with no profit reddit - making money to be able to function.
Same. Late to the conversation here, but in the same camp. About to delete a 13.5 year old account.
I'd be fine with Reddit making money, if they did it in an honest and predictable way. The way they're going about it though is short sighted, deceitful, and completely unnecessary.
They could make money hand over fist if they just tweaked their approach a tad, kept the community happy, etc.
Bundle API usage in with Reddit Premium. Have it use upper limits of say 100k requests/month to the API. Anything over that and it's on a per 10k/requests billing cycle sort of thing.
Push the cost to the consumer, so if AI wants to scrape all the data, they can pay for it just like everyone else.
I just burned my nearly 12 year old account. It's just not worth it anymore. Reddit has made promises it can't keep and does not intend on keeping.
It was never truly about them not making money though was it?
The whole thing would not have escalated, if they'd actually reacted to the problems raised, e.g. the astronomical API fees and the situation of mod tools and accessability tools.
Only when shit was already hitting the fan they responded to 3rd party devs, who tried to reach out to them for a month already.
Even if they'd postpone the changes and start listening to the raised problems now, they scorched a lot of earth and very well knew that would happen.
Isn't it always about making more money? They don't want 3rd party apps because they want more control because that allows them to optimize for more ad money. Now they can make even more money off their app by compromising the user experience, and users don't have any other option to leave for a better client.
Well stated.