Reddit Wants to Get Paid For Its Data, Killing Off the Most Popular Reddit App Apollo

The future of Apollo, one of the most popular third-party mobile apps for browsing Reddit, hangs in the balance as Reddit’s recently announced new API pricing terms could force its maker to close up shop.

According to Christian Selig, Apollo would be required to pay Reddit a staggering $20 million per year to continue operating as it currently does. Selig stated:

“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.”

The unexpected turn of events contradicts The New York Times report in which Reddit had made assurances that developers who intend to create apps and bots to enhance the Reddit user experience, as well as researchers focusing on academic or noncommercial research of the company, will continue to have free access to the API.

Selig wasted no time in sharing the news with the Apollo user community, expressing deep disappointment at the exorbitant price imposed by Reddit. He revealed that, based on the number of requests Apollo made last month, the cost would amount to approximately $1.7 million per month or $20 million per year.

Even if Apollo were to limit its services to subscription users only, the average Apollo user’s daily usage of 344 requests would translate to a monthly cost of $2.50 per user, more than double the current subscription fee. This would inevitably result in ongoing financial losses for the app.

Comparing Reddit’s pricing to that of Imgur, a similar platform in terms of user base and media content, Selig highlighted the stark discrepancy. While he currently pays Imgur $166 for 50 million API calls, Reddit’s pricing would amount to a staggering $12,000 for the same number of requests. This discrepancy raises questions about the true reasonableness and reality of Reddit’s pricing strategy.

Selig went on to analyze Reddit’s revenue and user base, suggesting that the proposed pricing is far from realistic. Assuming Reddit has consistently achieved quarterly revenues of $100 million, with a generous estimate of $50 million from Reddit Premium subscriptions, their annual revenue would amount to around $600 million.

Considering their reported 430 million monthly active users in 2019, and even assuming no growth in user numbers since then, each user would contribute a mere $1.40 per year or $0.12 per month. These estimates align with industry standards, further raising doubts about the justification behind Reddit’s pricing model.

Reddit Follows API Pricing Trends

Reddit’s decision to introduce expensive API access follows a similar move by Twitter, which led to the closure or pivot of numerous third-party Twitter apps and services.

SCOOP: After asking researchers to fork out $42,000 a month for API access Twitter is now saying those who don’t pay have to delete any data they’ve already accessed under prior agreements – which one researcher compares to “book burning”. (tip @techmeme) https://t.co/d2VjG3KGD7

— Chris Stokel-Walker ~ @[email protected] (@stokel) May 25, 2023

According to a report by Wired, Twitter recently introduced a $5,000-per-month API tier, attempting to address the affordability issue. However, the new tier still fails to solve the problem for smaller businesses that would need $60,000 per year to make use of it.

The implications for Apollo are substantial, with the proposed API pricing representing a 20-fold increase compared to the generous estimate of revenue generated per user for Reddit. Selig expressed gratitude for Reddit’s open communication during the process but voiced his concerns about the lack of realism and reasonableness in their pricing.

Despite acknowledging Reddit’s communication and civility throughout the pricing discussion, Selig, the developer of Apollo, expressed his disappointment with the company’s stance on API pricing. Selig revealed that he had specifically asked Reddit if they were open to adjusting the pricing based on his feedback, only to be met with a firm response.

Highlighting Reddit’s refusal to consider any changes to the announced pricing structure, he stated:

“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,”

While Selig recognized Reddit’s willingness to engage in discussions and maintain a respectful tone, he remains concerned about the lack of flexibility exhibited by the company. Despite raising valid points and expressing his disappointment with the proposed pricing, Selig’s feedback appears to have fallen on deaf ears at Reddit.

This development further underscores the uphill battle faced by Selig and other developers relying on Reddit’s API. With Reddit standing firm on its pricing decision, the future of third-party apps like Apollo becomes increasingly uncertain, leaving developers and users alike questioning the viability of such apps in the face of mounting costs.

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