Reddit is fighting for its soul. Many users are in revolt over API pricing changes that will shut down some of the most popular third-party Reddit apps, and they’re furious at CEO Steve Huffman after last week’s AMA that made it clear the platform wouldn’t budge. Huffman has argued the changes are a business decision to force AI companies training on Reddit’s data to pony up, but they’re also wiping out some beloved Reddit apps, and thousands of subreddits have gone dark for days in protest.
On Thursday, Reddit offered me an interview with Huffman. I’ve already published one story from that conversation about how Reddit was apparently never designed to support third-party apps. But here is a lightly edited transcript of the entire conversation — which, at times, was contentious.
Steve Huffman: One of the most important points I’d like to make today is that Reddit is a platform built by its users. My favorite analogy for Reddit is that of a city. Cities are physical things, but they’re really these living organisms created by their citizens. I think Reddit is very much the same. We’re a platform and tech company on one hand, but on the other it’s a living organism, this democratic living organism, created by its users.
Those democratic values run deep at Reddit. Every once in a while in cities, there’s a protest. And I think that’s what we’re seeing exactly right now. We, even in disagreement, we appreciate that users can care enough to protest on Reddit, can protest on Reddit, and then our platform is really resilient enough to survive these things. I’ll turn it over to you to jump into the details. But big picture, that’s how we look at this moment.
Jay Peters: What I’m reading [from a fact sheet published Thursday] is that it seems Reddit is saying the blackouts didn’t have much impact on your decision making. Is that the case?
In this case? That’s true. We’ve had blackouts in previous times where there’s a little more room for movement. But the core of this one is the API pricing change. That’s our business decision. And we’re not undoing that business decision.
And we were clear about that going into this, which is was one of the reasons why I think our users probably are annoyed at this blackout, because there wasn’t anything to gain.
We were also clear that we were willing to work with the apps that are willing to work with us, and that’s not changed. Now the two biggest, they threw in the towel. That was unexpected, but we’re still talking to the others. And, you know, we’ll see where that goes.
“They threw in the towel.”
Before the blackout, we were trying to be as clear as possible that the mod tools were not affected. That’s a common thing that’s been thrown around; the mod tools are not affected. The accessibility apps have access, we’ve got deals now with three of them — RedReader, Dystopia, and Luna — and the vast majority of our API users are within our free limits. And Pushshift is coming back online for mods. So I think most of the stuff that mods wanted, and day to day users wanted, are there.
What’s not happening is us continuing to subsidize businesses built on taking our data for free. That’s not changing.
You said that two threw in the towel: that’s Apollo, and which other?
RIF. And I think Sync said they’re shutting down as well, if I’m not mistaken.
Yeah, they did. [Apollo developer] Christian Selig said that Reddit told him in January that there’ll be no API changes coming this year. When did that shift? When did Reddit decide to make these changes? And what was the impetus?
Well, we’ve been talking about this forever. I think one of the ironies is [Selig] is probably the only guy on Reddit defending these apps for a long time.
But the impetus for these changes is like, we took a close look at our data, our API usage, where it’s going, how much it costs, and it’s just not sustainable. And so we told them that back in April, that changes were coming, that they’re going to have to pay to cover their costs. Which actually, I think he and others accepted. You know, we’ve had a lot of conversations with him and others privately, one on one, and some on the site. What they didn’t like is the price, but the price is the price. It just happens to be expensive to run an app like Reddit.
Why are folks being kind of rushed to do this? My understanding is from the April announcement that the prices weren’t actually set yet, and Christian and others didn’t really have an understanding of the costs until the end of May. Why wait so long to roll out the prices to them, and why hold to this month long deadline, instead of a little bit more breathing room for some developers to adapt?
We’re perfectly willing to work with the folks who want to work with us, including figuring out what that transition period will look like. But I think a deadline forces people, us included, to negotiate that.
It’s not reasonable to let this… it’s been going on for a very long time. Folks have made millions. These aren’t like side projects or charities, they’ve made millions. One is owned by an ad network. They have no contract with us. Our peers just turn them off. Reddit’s the only company that allows these sort of competitive products to exist, and we’ll allow them to continue to exist if it’s fair, if they’re on equal footing, which is paying for their data in the same way that we have to.
And like I said, we’re still talking to the others. And we’ll see where that goes.
It seems like a lot of these folks are smaller — maybe one person — and they’re just being forced to shut down. Are those the folks that are making millions?
The ones we’ve talked about today, yes. Once they’ve thrown in the towel, they’re doing quite well.
Can you give any sense of scale, how well they’re doing?
You’re talking to them, go ask them! Millions. He said how many subscribers he has, his price list is public. [Selig did not deny the “millions” claim when reached for comment.]
I have a guess on how many. He’s given a lower number of subscribers, I have another guess that’s higher. But it’s real money. And it costs us real money. It costs us about $10 million in pure infrastructure costs to support these apps. But it’s not labor, that’s not R&D, that’s not safety, that’s not ML, and that doesn’t include the lost monetization of having users not on our platform. Just pure cloud spend. It’s real money.
In April, you spoke to The New York Times about how these changes are also a way for Reddit to monetize off the AI companies that are using Reddit data to train their models. Is that still a primary consideration here too, or is this more about making the money back that you’re spending on supporting these third party apps?
What they have in common is we’re not going to subsidize other people’s businesses for free. But financially, they’re not related. The API usage is about covering costs and data licensing is a new potential business for us.
Have you talked to the big AI companies about the changes? How have they taken to them?
We’re in talks with them.
How are those talks going?
We’re in talks with them.
I know Reddit filed confidentially for an IPO in December 2021. How’s that process going, and are these changes in service of assisting with that process in some way?
You may notice there’s not a lot of companies going public right now. It’s something we’d like to do someday. I don’t know when the market will be more conducive to that, and there’s a few things I’d like to do with Reddit before we get there.
I’d like to get there for a variety of reasons, which we can get into if you’re interested, but whether we go public or not is separate from building a sustainable business or building a business that can stand on its own two feet. I love our investors, but I don’t like depending on investors, and financial security is security. And look, I want to do that for our employees. I want to do that for investors. And one day I hope to count our users among our investors, but getting to breakeven is a priority for us in any climate.
You want to bring the company financial security: is that $10 million going to make a big difference in Reddit’s costs to get to that breakeven and profitability point?
We try to be efficient in every aspect of our business. As it happens, we also announced layoffs last week. For us, that’s even a more painful change. And look, there are lots of efficiencies all over our business to be gained. This is a big one, right? Giving a 100-percent free subsidy to competitors is not a good business strategy.
Isn’t there a way you could at least give them longer and work a little bit more closely on negotiable terms for folks like Apollo or Sync or RIF? Some of their users are, I’m sure, power users of Reddit and want to see them succeed.
I said we are working with everybody who is willing to work with us, which includes many of the other third party apps. The three you mentioned said they don’t want to work with us and they’re shutting down. I didn’t tell them to do that.
We have had many conversations — well, not with RIF, he never wanted to talk to us — but with the others, we were having such conversations, and we’ll work with the others. A deadline is important, otherwise these things just linger and linger and linger.
We see companies like Google or Apple giving, you know, three months, six months, a year for these sorts of deadlines.
Tell me, which companies were Google and Apple subsidizing for 10 years that you’re thinking of?
They weren’t subsidizing, but they work with their developers. They need apps for their platforms as well.
Was there like a Google clone out there where they take all of Google’s data and run their own ads on it, that Google let survive for 10 years? Does that exist? Another app store that Apple allows to exist?
I don’t know if I agree with the characterization that Apollo is a fully direct competitor of Reddit.
Okay, hold on, timeout. You go to the App Store, you type in Reddit, you get two options, right? There’s Apollo. You go to one, it’s my business, and you look at our ads, use our products. That’s 95 percent of our iOS users. The rest go to Apollo, which uses our logo, or something like it, takes our data — for free — and resells it to users making a 100 percent margin. And instead of using our app, they use that app. Is that not competitive?
I see it’s competitive, but Reddit offered these tools. Clearly there was an interest to work with third party developers at some point to build versions of the platform they wanted.
We offer the API so the vast majority of our use of the uses of the API — so not these, the other 98 percent of them that make tools, bots, enhancements for Reddit — that’s what the API is for.
“It was never designed to support third-party apps.”
It was never designed to support third-party apps. We let it exist. And I should take the blame for that, because I was the guy arguing for that for a long time. But I didn’t know — and this is my fault — the extent that they were profiting off of our API. That these were not charities.
The ones that actually are doing good for our users — RedReader, Dystopia, Luna — like actually adding real value at their own cost? We’ve exempted. We’ll carry that cost.
I want to stop you for a second there. So you’re saying that Apollo, RIF, Sync, they don’t add value to Reddit?
Not as much as they take. No way.
There’s not even a scenario where those apps pay for their data?
That’s all I’m asking. We pay for our data, we pay for our hosting, they need to pay for theirs. That is fair. What our peers have done is banned them entirely. And we said no, you know what, we believe in free markets. You need to cover your costs.
When you say peers, who are you referring to there?
Facebook, Twitter, Snap. Other social media.
You mentioned these changes have been in discussion for a long time. How long are you thinking?
I know April is when we started doing public comms, and more regular private comms. Within the company? For as long as I can remember.
Since you came back to Reddit in 2015?
If the discussions have been going on for that long, why this exact moment in time, and why such a short deadline?
Why any moment in time? We did it when we did it. We could do it a year from now and we’d probably have the same conversation. We could do it five years ago, we’d be having the same conversation.
I guess what I still don’t quite understand is, if this has been thought about for a long time, is the goal just to meet this deadline and move on? Like just turn a new leaf from there?
We don’t have to meet our deadline. We told folks hey, we need to come up with a plan, or we’re going to start billing you on July 1st.
Anna Soellner, Reddit VP of Comms: I feel like you’ve been asking the same question over and over again.
Steve Huffman: We say we work with people who want to work with us; you’re spending a lot of time with the one guy who doesn’t want to work with us.
“That’s what this is about. It can’t be free.”
I know I’m focusing a lot on that, but that’s where a lot of the protests in the community are focused. People appear to really love these apps. And, apparently, they think Reddit itself is not offering the experience they’re looking for. People talk about leaving the platform because they can’t use these apps. So if Reddit is going to shut down these apps, you’re going to lose people who loved Reddit, and that still doesn’t quite make sense. So I guess I’m wondering why hasn’t there been…
90-plus percent of Reddit users are on our platform, contributing, and are monetized either through ads or Reddit Premium. Why would we subsidize this small group? Why would we effectively pay them to use Reddit but not everybody else who also contributes to Reddit? Does that make sense?
These people who are mad, they’re mad because they used to get something for free, and now it’s going to be not free. And that free comes at the expense of our other users and our business. That’s what this is about. It can’t be free.
Do you imagine there are going to be other third party apps after these API changes? What do you see the future of third-party apps looking like?
We’ll see. We’ll see. Like we try to charge so it works out to about $1 per user per month for reasonable API usage. I don’t think that’s unreasonable. That’s far cheaper than Premium, it’s far cheaper than what people are willing to pay. It’s less than what most third-party apps charge their users. So I think it’s workable. We’ll see where it goes. Now, some of these apps have to change business models, and so that’s more complex.
Tim Rathschmidt, Reddit’s director of consumer and product communications: An angle no one else has been writing about is the desire and frustration with users that want their communities back. Especially being vocal about it. That’s just not something that’s really been covered.
Steve Huffman: The blackouts are not representative of the greater Reddit community. Users may have been for this on Monday, they’re not for it now.
How widely are you seeing that sentiment? If I go on r/all right now, at least as of about an hour ago, four of the five top posts are all about these blackouts. [Note: As I am working on this transcript, about three hours after my conversation with Huffman, those four posts are much farther down r/all. The highest of them is now ranked #13, instead of #2, 3, 4, and 5.]
Oh, you mean these posts that have no comments? Those ones?
They’re highly upvoted by their communities.
If there were comments on there, I bet I can tell you what those comments would say. They would say “knock this off, it’s annoying.” Because if you go to the other posts where comments are enabled, that’s what people are saying.
That can’t be everywhere though, right? [Where people might be annoyed that a subreddit is still closed.]
We can do this together. Let’s find one. We’re going to have to scroll for a while.
I know there are examples [of subreddits where people are happy they’re open] in the fact sheet…
Find a comment thread on a normal subreddit where the users aren’t saying this is annoying. You can do that offline. But that is the vibe on Reddit right now.
It’s not even universal among mods. We’re talking to them. That’s what we’ve been doing all week. A lot of our mods don’t want to be dealing with this. I get it. Like, earlier this week, maybe it was different.
“We don’t have problems with protests.”
And we allow the protests. We don’t have problems with protests. I think it’s important. That’s part of the democracy. It’s part of the democratic part of Reddit. But the users are not in support of it now. It’s like a protest in a city that goes on too long, and the rest of the citizens of the city would like to go about their lives.
I’m sure people are not as supportive of it as they might have been earlier in the week, because it has obviously been a huge inconvenience to using Reddit on a day-to-day basis. But how can we prove that, broadly, users are not in support of the Reddit protests when some of the top upvoted posts are protest posts?
If comments were on for those posts… there’s a reason why they’re not allowing comments. That is a very un-Reddit thing to do. We don’t do that. I do my AMA. I take my beating.
Yeah. And we took it. I would have a complete 180 different attitude if these posts had comments turn on. If the communities that were dissenting allowed dissent. You and I can argue about what we think they say. The reality is, the conversation is stifled in those areas and only those areas right now.
What would you say to folks who do still support protests and want to see change? They’re not seeing that change.
They’ll see a change. We made improvements to this whole thing. We exempted the critical apps. Pushshift, we made a deal with them. We found accessibility apps, did deals with them. Our mod roadmap is unchanged and aggressive. It’s just as aggressive right? We’re shipping the important stuff this month. We’ve given ourselves our own deadline there. And we’ve been hard at work at that for years.
The third-party apps, if I were to describe their UI in one word, in comparison to ours, they’re simpler. I appreciate that. I like that. We’re making our own app simpler as well, because I think it has gotten too cluttered.
So I accept the criticism. This is not about that, right? People have had their preferences. They liked those apps. They liked the tools. All of those things can be true. And also, we can make a business decision. We will close those gaps as effectively as we can.
I’d like to see some of the third party apps figure out a sustainable business model. We’ll see if they do.
