Thousands of subreddits have gone dark in protest against recent changes to how much Reddit charges third-party providers.
Key Details
- In response to Reddit’s decision to charge for access to its application program interfaces (API), around 7,000 subreddits have closed for at least two days.
- APIs allow computer programs to use one other’s capabilities, or give two programs the means to communicate with one another.
- Reddit’s new policy of charging for its API has been controversial, but the company CEO Steve Huffman says the move is necessary for Reddit to survive due to competition with generative artificial-intelligence (AI) applications.
- As a result of these policy changes, several third-party apps have shut down, but Huffman does not appear to be bending to redditors’ demands any time soon, Forbes reports.
- The controversy could affect Reddit’s long-awaited IPO, which is expected to be later this year.
Why it’s news
Reddit charging for API is a significant change from its previous policies. In 2016, the company launched free API, but now, it wants to start charging third-party developers up to 24 cents for every 1,000 API calls beginning July 1. The change was announced in April, and third-party developers have argued against it ever since.
Reddit claims that 90% of third-party apps will not be affected, but larger third-party apps will have to pay a hefty fee—sometimes millions of dollars. The app Apollo, a popular app for Reddit moderators, says it will lose $20 million a year based on the new price point, Forbes reports.
In response to these higher prices, third-party apps, including Apollo, RIF, REddPlanet, and Sync, have announced that they will shut down on June 30 as they cannot continue to operate with the new prices.
Reddit moderators have responded to the news by temporarily shutting down their subreddits. Over 7,000 subreddits have “gone dark” for 48 hours in protest. Some have stated that they will be closed indefinitely until Reddit can come up with a better solution. Several prominent subreddits, such as r/stocks and r/science, are part of the protest.
While Reddit has received strong pushback for its decision, Huffman has reasons for making the controversial decision. Generative AI needs data and information for training purposes, and Reddit has a significant resource of information that is excellent for AI training—especially when understanding humanity.
Recognizing how valuable that data can be, Huffman is looking to capitalize on any potential revenue. In a New York Times interview earlier this year, he said, “Reddit corpus of data is really valuable,” and he does not “need to give all of that value to some of the largest companies in the world for free.”
In an “ask me anything” (AMA) event last week, Huffman told angry Redditors, “Reddit needs to be a self-sustaining business and to do that, we can no longer subsidize commercial entities that require large-scale data use.”
In the same event, he confirmed that there were no plans to change the API charges.
Elon Musk made a similar decision after buying Twitter last year. One of his first decisions was to charge for access to its API. This move was also met with backlash. The changes meant up to $42,000 in monthly fees for some of the largest companies on Twitter.
Twitter now has three paid tiers for developers who need to access Twitter’s API. The start-up level costs around $5,000 monthly. Reddit may be able to establish a similar system.
