The Reddit API changes aren't about operating costs

In case you haven’t been paying attention (like I wasn’t until today), Reddit recently announced astronomical price increases for using its API. They aren’t upfront about the actual prices; their newly released Developer Terms just say rates will be “determined at Reddit’s sole discretion.” The prices they’ve been privately telling third-party app developers are high enough to cause multiple apps to shut down.

Anecdotal evidence from developers points to millions of dollars per year to run a third-party client after these changes. The reported rate I’ve seen is about $12,000 per 50 million requests, or about $240 per million requests. It’s not directly equivalent, but for context, let’s look at the pricing on the king of very commonly used web services, AWS. For Lambda requests in the US East region, Amazon currently charges $0.20 per million requests. Reddit’s reported pricing is 1,200 times higher. I could have been a little meaner and compared it to something even more inexpensive like Cloudflare Workers (not a sponsor, I just really like what they’re doing), but AWS is a good industry benchmark for web API costs.

Admittedly, Reddit is more complex, and would probably be making several requests to its hosting provider for each incoming request to the Reddit API. It’s a rough equivalent, not a direct one, but I would be extremely surprised if Reddit is making anywhere near 1,200 backend requests for every incoming request to its own API. The point is, Christian Selig is absolutely right: this pricing is not based on reality. It’s not about offsetting operating costs, it’s a cash grab, and even more than that, I think it’s a consolidation of power.

I’ve never been into Reddit. I end up there occasionally while searching for information, usually about web development or consumer electronics, but I don’t seek it out. However, even in my casual interactions with the platform, I’ve noticed Reddit has been pushing users toward its official app for as long as I can remember. If you open any Reddit thread in a mobile browser, a modal initially blocks the page to tell you that “Reddit is better in the app!” with an option to “continue in Chrome” (which in my case is actually Vivaldi) if you’re really determined to.

With an IPO coming soon, Reddit will want to show as many revenue sources as possible to any potential investors. Funneling users into the official mobile app, rather than third-party ones or the web interface, will mean they can control the user experience more thoroughly. At the very least, that makes monetization through ads a lot easier since blocking them in apps takes considerably more effort than it does in a browser. I’m sure the number of downloads of the official app will also be a key metric that they show to potential investors, and if there’s a significant increase a few months before the IPO, that will look very impressive out of context.

That means that the third-party Reddit clients so many Redditors have come to love and rely on are not only competition, but a drain on investor-attracting metrics and profitability. I don’t think Reddit honestly expects third-party app developers to pay these rates; I think they’re designed to discourage the existence of any unofficial way of accessing the platform. If Reddit can extract a bunch of profit from a few academic or AI clients with a budget and a need for lots of data, that’s an added bonus.

Reddit no longer seems to see itself as a community, but rather as a bundle of resources to be harvested. The front page of the Internet has fallen to capitalism. It’s not the first time something like this has happened recently, and it won’t be the last, but this is another former champion of open communication deciding that profit trumps access, freedom, and choice. That’s something we need less of in the world, not more.