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Reddit pricing: API charge explained

Providing a free API was becoming costly for Reddit. Enterprise-scale developers now have to pay for access to Reddit's data.

Reddit is changing its API pricing policy, and users are up in arms.

They have reason to be. The pricing change is expected to kill off several third-party apps that rely on free access to Reddit's data. Some of the apps that have already shut down include Apollo, BaconReader, Boost, Reddit Is Fun and Sync.

In April, Reddit announced it would start charging developers for access to its previously free API. The change -- which took effect July 1 -- charges developers 24 cents per 1,000 API requests. This adds up fast. Applications such as Apollo can make more than 7 billion requests a month, which would end up costing $2 million a month. This is unsustainable for some third-party developers.

On June 12, thousands of subreddits went dark in protest of Reddit's API changes -- some with millions of subscribers. The blackout was designed to get Reddit to lower its proposed API charges. On the first day of the protest, Reddit crashed for several hours because of the blackout. Some users also flooded the platform with pictures of comedian John Oliver. Other subreddits were marked as not safe for work or went dark on certain days of the week. The blackout -- originally planned to last 48 hours -- wound up spanning several weeks for some subreddits, while others returned after two days.

The participants of the blackout -- Reddit moderators -- perform an important service for Reddit. The community moderators who operate the subreddits for free do an estimated $3.4 million worth of labor each year, according to research from Northwestern University. In the past, Reddit trusted moderators to operate as they saw fit and rarely interfered. But after the several thousand subreddits remained offline past the 48-hour mark, Reddit threatened to deactivate the striking subreddits.

Reddit's announcement and implementation of this new policy were quick, by industry standards. For comparison, when Apple acquired the weather service Dark Sky and said it was closing its API, Apple gave developers 30 months to prepare for the switch. Reddit gave 30 days between the pricing announcement and the implementation date.

Threat actors from the BlackCat ransomware gang are also threatening to release 80 gigabytes of pilfered Reddit employee data if Reddit doesn't withdraw the policy and fork over a $4.5 million ransom. The hackers are using the policy change as additional leverage to the original ransom.

Reddit isn't the first social media giant to adopt a new pricing scheme. Twitter also recently implemented charges for its API as well as a temporary read limit for users, which limits the amount of posts a user can read per day. The move was to stave off bots and other bad actors, according to Twitter.

Why are APIs important?

APIs let two applications communicate with each other, meaning they can send data back and forth without the need to go into either app to manually input it. The Reddit API lets developers integrate parts of Reddit into their own apps.

For example, an app can use an API to request all the posts in a certain subreddit, and Reddit responds with the requested data. Many third-party applications use APIs to access Reddit's data -- sometimes making billions of requests per month.

Why Reddit changed its API pricing

Reddit's stated reason for the API pricing change was to stop tech companies from scraping for AI training data for free. Reddit's corpus of data has been used to train large-scale AI models such as GPT-4, which powers OpenAI's ChatGPT.

There are also rumors of a Reddit IPO in the second half of 2023. Unlike some of the third-party apps affected by the new pricing, Reddit is not profitable. Many third-party apps are essentially just a better Reddit interface. Charging for the API would direct users back to the first-party app, generating more data that Reddit could eventually sell to advertisers. Reddit could also serve more ads through its first-party application and generate more revenue. This diversifies Reddit's revenue stream and theoretically puts the company in better standing for the IPO.

How Reddit changed its pricing scheme

"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," Reddit CEO Steve Huffman said in a Reddit post announcing the new pricing structure.

Not all apps on Reddit will have to pay. The following conditions, effective as of June 1, enable free access to the data API: Apps that make fewer than 100 queries per minute using OAuth authentication and 10 queries per minute not using OAuth can use the API free of charge. This accounts for 90% of apps using the service, according to Huffman's post.

Apps with a higher query rate are subject to the new charge of $0.24 per 1,000 API calls.

Huffman's post also stated the following:

  • Mod bots -- automated moderation tools -- will continue to be free.
  • Reddit is releasing a developer platform, which is currently in closed beta testing.
  • Accessibility apps such as RedReader and Dystopia will continue to have free API access.

Why Apollo shut down

The pricing changes will make it drastically harder for third-party Reddit apps that rely on the API to exist, forcing some developers out of business. One example is Apollo. Apollo is a third-party app that improves Reddit's user experience. Apollo would have to pay Reddit more than $20 million annually just to keep running. This is because anytime a user does nearly anything in Apollo, it pings the API.

Christian Selig, Apollo's sole developer, said in a GitHub post that in conversations with Reddit representatives, he expressed a willingness to pay and work with Reddit, but was not met with a response with enough time to strike a deal.

What does this mean for third-party apps?

Not all third-party apps in Apollo's vein are going down with the new pricing scheme. Some examples of apps that plan to remain active include the following:

  • Narwhal. Narwhal is a Reddit browsing app that will adapt to the new pricing structure by making its users pay for the app. The subscription will cost between $4 and $7, its developer said.
  • MultiTab. MultiTab is a service that provides multiple tabs for navigating social sites. It will stop being free and begin to charge a subscription price.

As for the protesting subreddits, some have moved to other social aggregator sites such as Kbin and Lemmy, which are much smaller than Reddit.

Time will tell if Reddit's new developer platform will fill in some of the functionality that Apollo and similar apps will no longer be able to provide.

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