Reddit to Implement API Access Fees
According to CEO Steve Huffman, Reddit will start charging businesses for access to its API if they trawl Reddit data and “don’t deliver any of that value” to consumers. The API will remain free for developers who build apps and bots that help people use Reddit, as well as for researchers. Reddit, valued at around $10 billion in August 2021, is seeking ways to monetize its vast array of user-generated content and preparing for a potential initial public offering later this year.
Reddit announced that it will begin charging for the use of its API. The company’s API will remain free for developers who want to build apps and bots that help people use Reddit, as well as for researchers who wish to study Reddit for strictly academic or noncommercial purposes. However, companies that “crawl” Reddit for data and “don’t return any of that value” to users will have to pay up. Reddit co-founder and CEO Steve Huffman told The New York Times that “it’s a good time for us to tighten things up.”
The decision was made as Reddit seeks to commercialize its enormous library of user-generated content. Reddit had over 430 million monthly active users as of January 2019 and over 1.2 million active special interest communities. According to Huffman, who spoke to The Times, Reddit data is particularly useful because it is constantly updated. There are a lot of things on the site that you’d only ever say in therapy, or AA, or never at all. More than any other forum on the internet, Reddit is a home for honest dialogue. But we don’t have to provide some of the biggest firms in the world with all of that value for nothing.
Reddit hasn’t announced the details of its API pricing yet, but the company is preparing for a potential initial public offering sometime later this year, and investors will be looking for growth in—or entirely new streams of—revenue. Reddit, which was valued at around $10 billion in August 2021, is estimated to have made $350 million from ads two years ago. That total pales in comparison to Meta’s and even Twitter’s ad revenues. Meta made $113 billion in 2022, while Twitter, despite its many controversies, raked in nearly $7 billion.
In news related to the API policy change, Reddit said that it hopes to incorporate more AI into how the site operates, such as identifying the use of AI-generated text on Reddit and adding a label that notifies users that a comment might’ve come from a bot. Reddit also aims to improve its moderation tools and the third-party bots that help moderators monitor the forums.