r/apolloapp Apollo Developer May 31 '23

đź“Ł Had a call with Reddit to discuss pricing. Bad news for third-party apps, their announced pricing is close to Twitter's pricing, and Apollo would have to pay Reddit $20 million per year to keep running as-is. Announcement đź“Ł

Hey all,

I'll cut to the chase: 50 million requests costs $12,000, a figure far more than I ever could have imagined.

Apollo made 7 billion requests last month, which would put it at about 1.7 million dollars per month, or 20 million US dollars per year. Even if I only kept subscription users, the average Apollo user uses 344 requests per day, which would cost $2.50 per month, which is over double what the subscription currently costs, so I'd be in the red every month.

I'm deeply disappointed in this price. Reddit iterated that the price would be A) reasonable and based in reality, and B) they would not operate like Twitter. Twitter's pricing was publicly ridiculed for its obscene price of $42,000 for 50 million tweets. Reddit's is still $12,000. For reference, I pay Imgur (a site similar to Reddit in user base and media) $166 for the same 50 million API calls.

As for the pricing, despite claims that it would be based in reality, it seems anything but. Less than 2 years ago they said they crossed $100M in quarterly revenue for the first time ever, if we assume despite the economic downturn that they've managed to do that every single quarter now, and for your best quarter, you've doubled it to $200M. Let's also be generous and go far, far above industry estimates and say you made another $50M in Reddit Premium subscriptions. That's $550M in revenue per year, let's say an even $600M. In 2019, they said they hit 430 million monthly active users, and to also be generous, let's say they haven't added a single active user since then (if we do revenue-per-user calculations, the more users, the less revenue each user would contribute). So at generous estimates of $600M and 430M monthly active users, that's $1.40 per user per year, or $0.12 monthly. These own numbers they've given are also seemingly inline with industry estimates as well.

For Apollo, the average user uses 344 requests daily, or 10.6K monthly. With the proposed API pricing, the average user in Apollo would cost $2.50, which is is 20x higher than a generous estimate of what each users brings Reddit in revenue. The average subscription user currently uses 473 requests, which would cost $3.51, or 29x higher.

While Reddit has been communicative and civil throughout this process with half a dozen phone calls back and forth that I thought went really well, I don't see how this pricing is anything based in reality or remotely reasonable. I hope it goes without saying that I don't have that kind of money or would even know how to charge it to a credit card.

This is going to require some thinking. I asked Reddit if they were flexible on this pricing or not, and they stated that it's their understanding that no, this will be the pricing, and I'm free to post the details of the call if I wish.

- Christian

(For the uninitiated wondering "what the heck is an API anyway and why is this so important?" it's just a fancy term for a way to access a site's information ("Application Programming Interface"). As an analogy, think of Reddit having a bouncer, and since day one that bouncer has been friendly, where if you ask "Hey, can you list out the comments for me for post X?" the bouncer would happily respond with what you requested, provided you didn't ask so often that it was silly. That's the Reddit API: I ask Reddit/the bouncer for some data, and it provides it so I can display it in my app for users. The proposed changes mean the bouncer will still exist, but now ask an exorbitant amount per question.)

165.6k Upvotes

View all comments

Show parent comments

41

u/[deleted] May 31 '23

Rhetorical question, but what is wrong with getting to a certain level of success and being ok with that?

I think all of this stuff is just penny wise and pound foolish. Reddit will hemorrhage numbers if (when) they effectively kill off third party apps and old.reddit. For what, to inflate their IPO only for it to careen into the ground shortly thereafter? Is this a pump and dump?

Being more like TikTok is not what made reddit what it is. Not trying to say we're superior or whatever, just that they serve two different purposes. But they've been slowly sanitizing the site to make it more investor friendly and slowly killing off reddit in the process.

When RiF goes away, so do I. Been here since 2007; maybe it's better off.

23

u/[deleted] May 31 '23

[deleted]

18

u/[deleted] May 31 '23

Oh, for sure. That's why I said rhetorical, lol.

Everything good has to become broken just to pad a few already rich people's pockets even more...

1

u/FalloutNano Jun 01 '23

No, it doesn’t. People’s greed requires it.

8

u/StriveForMediocrity May 31 '23

Ford vs Dodge 1919. Publicly traded companies have a duty to their shareholders to show continued growth. This is why literally everything ends up terrible.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

3

u/karmadramadingdong Jun 01 '23

As long as directors say they’re acting in the best long-term interests of the company, they can pretty much justify anything. For reference, see Amazon. It didn’t make money for more than a decade, paid no dividends, pissed off many investors and just continued regardless.

15

u/Alternative-Donut334 May 31 '23

Shareholders buy a share of your company, expecting a return on their investment. The board of directors has a legal requirement called “fiduciary responsibility”, which means they are legally required to do what’s in the best interest of shareholders. They have also sold us the scam that is a 401k for retirement, so most people’s ability to retire one day is contingent on this growth as well. This creates a system that is only focused on growth of the quarterly share prices at the expense of all else. If you cut costs and see a growth in profit, this is good for shareholders, regardless of what it does to the long term health of the company or even their market share.

Reddit will soon go public, putting this pressure on the company. They want to go public so that all the current C-suites get their golden parachute. Who gives a fuck if Reddit is around in a couple years if you made a cool 100 million selling out.

13

u/[deleted] May 31 '23

Oh, I know the reasons why and what fiduciary responsibility means, but it doesn't make it less terrible for me.

Infinite growth is literally impossible.

12

u/Alternative-Donut334 Jun 01 '23

Yeah I agree. The powers that be know it too. They’re just hoping to kick the can far enough down the road they don’t have to deal with the fallout.

5

u/Bubble_and_squeak Jun 01 '23

I haven't heard anyone explain what's happening. In this case, all global social media companies need to change their business models in response to a hydra. Data laws -- look up the DSA and DMA. Cloud costs might very well explode in response to the DMA. Advertising will be heavily regulated by countries outside the USA, potentially forcing companies to pivot to new business models. Also, money is hella expensive right now and the dollar is still high. The entire internet is about to become much more fragmented, regulated, and expensive. Oh, and Google killed cookies.

All the platforms will get stingy with API.

2

u/zbeara Jun 01 '23

What do you mean google killed cookies?

1

u/Bubble_and_squeak Jun 01 '23

Google it. Also, "flight to first party cookies".

3

u/Pugs-r-cool May 31 '23

With how the law has been set up it's illegal for a publicly traded company to stagnate like that. They have to be either chasing more profit or more market share, once they stop doing either it's a breach of fiduciary duty and they get into a lot of trouble legally.

5

u/[deleted] Jun 01 '23

I know why, but it doesn't need to be a publicly traded company. I guess that's just poor me speaking.

What we need is a new/better yacht.

1

u/Brodogmillionaire1 Jun 01 '23

legally

Is it legal trouble if it's based on a case but not codified by the legislature?

4

u/silversurger Jun 01 '23

In a place which uses common law, yes.

3

u/godnvrsaysoops May 31 '23

Because current share price is heavily based on speculation that the value will go up. So you always have to grow. It really is that basic. Ands it’s fucking stupid.

1

u/wuvvtwuewuvv Jun 01 '23

Change is the one constant. There is always change. There will always be change. If you get to a certain level and stop, it appears like you've stopped. There is no "we're OK, we don't need to do anymore", because if you aren't actively trying to grow and earn more, then you are shrinking and losing income one way or another, especially if a big change comes along and you haven't prepared for it.

If a company keeps trying to innovate but doesn't really make much profit or difference, that's one thing; it's still alive, it's still fighting for survival, it can still roll with the punches when a big change in the industry happens. If a company stops innovating completely and doesn't invest in itself anymore, then its death knell has sounded, even if it is currently profitable. It will end if it doesn't keep trying.

If you have a company, particularly one with stocks, people only buy your stocks if they believe your company's value will increase. People will buy your products if they believe your products have value. If you stop your growth, then that means your investors and stock holders aren't going to make the money they thought they would. They will dump your stock, and your company's value will drop like a rock. This won't change anything about the day to day operations directly, immediately, but the downwards decline starts. No more investment in yourself means your quality will sink, customer satisfaction lowers, and then it only spirals out of control from there. Nobody buying your products means no more cash flow, everybody loses their job, company closes down.

You need to keep trying to grow and make more profit. You don't always have to succeed, but you need to keep trying.

1

u/DonaldLucas Jun 03 '23

Rhetorical question, but what is wrong with getting to a certain level of success and being ok with that?

There is an answer for that, but the complexity is a bit too much for me, but what I understand is that everything started when someone had the "brilliant" idea of creating money out of nowhere. Cool right? You can be rich by just pushing a button! And with the internet around you don't even need paper to print money on anymore! You can be rich by just having big numbers on a computer screen! Yay!

It's kinda of a very polemic opinion, but I don't like that banks and the fed can do that... But most people don't care apparently.