Reddit's New API Pricing Causes Concern for Third-Party Apps

June 9, 2023: Reddit recently unveiled its new pricing for developer tools and services, including access to the Reddit Data API and enhanced moderation tools. However, the company did not disclose the pricing details until two months later. It turns out that the cost is $0.24 per 1,000 API calls (less than $1.00 per user monthly), which Reddit claims is a fair price.

This announcement has sparked outrage among developers of third-party Reddit apps. Christian Selig, the creator of Apollo, a popular third-party app, revealed that they made a staggering seven billion API calls last month. This would cost them around $1.7 million monthly or approximately $20 million yearly. Another app called RIF (Reddit is fun) estimated similar costs. Redditors expressed their frustration, and over 2,470 subreddits have confirmed their participation in a 48-hour blackout scheduled for June 12. Some subreddits even threatened to shut down permanently if Reddit doesn’t reconsider its new policy.

The Background: Reddit’s decision to charge for API access stems from its desire to monetize its vast collection of user-generated content. With 430 million active users per month, 1.7 billion monthly visitors, and 100,000 active communities, Reddit’s content is precious. The company is also preparing for a potential initial public offering, and shareholders and investors are seeking new revenue streams and growth opportunities.

Reddit’s Stance: According to The New York Times, Reddit will continue providing free API access for developers creating free apps and bots that enhance the Reddit experience. It will also be available for researchers engaged in academic or noncommercial studies on the platform. However, companies that extract data from Reddit without providing value to users will now be required to pay. Reddit’s co-founder and CEO, Steve Huffman, stated that they believe this is a fair move and that the Reddit corpus of data holds immense value, which shouldn’t be given away to large companies for free.

Struggles of Third-Party Apps: Apollo’s developer, Christian Selig, defended his app’s API usage, explaining that each action in the app requires an API request. He mentioned that his app optimizes these requests for a faster user experience. Selig believes it’s fair to charge for API access but criticizes the exorbitant prices set by Reddit. Many developers are also concerned about the tight timeline. The new policy will be implemented on July 1, giving developers little time to adjust their pricing or consider shutting down their apps. While Reddit is unwilling to negotiate the pricing, they may consider delaying the implementation.

Potential Impact: The situation is reminiscent of Twitter’s similar policy change, which received widespread criticism and led to the demise of several third-party apps. Reddit’s new policy may limit the availability of sexually explicit content on third-party apps, and medical content with graphic images marked as NSFW may also be restricted. The response from users and developers through the planned blackout will be a crucial factor in whether Reddit reconsiders its pricing. If many users are willing to accept a temporary absence of Reddit, the company may need to consider the potential loss of users if they refuse to make changes.