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Comment by mcmcmc | Hacker News Reader

3rd party app users are all cost, no revenue. Just eliminating them would by definition move the bottom line towards the black.

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Reddit doesn’t like to remember it, but it’s fundamentally a site where users provide content, and only a small fraction of users provide the most popular content (and do moderation). Those fraction tend to be the more advanced users that use things like third party apps or RES. So hurting those users is decreasing the amount of free work that the users give to Reddit, which means that either the site decreases in quality (less revenue) or Reddit needs to pay employees to do the same work (higher costs).

The cost of the third party apps themselves was trivial, and if they just wanted to recoup those costs they could have proposed a much more reasonable cost per user for third party apps.

It’s about control, not about profit.

> The cost of the third party apps themselves was trivial.

$10m isn't trivial unless your operating costs are in the billions.

That’s what they wanted to charge - Reddit only makes $0.13/user/mo, so their cost must be less than that (or else Reddit has much bigger problems), so let’s say $0.05/user/mo. Apollo has 2 million users, so $1.2 million per year.

Moreover, at that cost, less than a dollar per user per year, Apollo could have instituted a $1/year subscription. But instead Reddit wanted over $100 per user per year, two orders of magnitude more than the cost.

This is rather limited thinking though. The value of the platform is ultimately in it's content, and if those 3% of users on 3rd party apps are highly influential in driving content, then by driving them away you will harm overall value.

It's one of those typically short sighted "oh lets remove this thing costing us" without understanding the long term impact to value.

RIF had a revenue sharing agreement that was canceled years ago with no attempt to replace it with something reasonable.

It's kind of interesting though because a lot of people using 3rd party apps have proven they are willing to pay for a good experience (Apollo had a subscription I think, RIF has a paid tier, etc...). So instead of charging apps for API access, just require all access through a 3rd party app require authenticated users, and those authenticated users must pay a monthly fee to use third party apps.

You don't over burden one single entity with large recurring payments (the app developers themselves), your power users provide revenue, and you can slowly work on your value proposition of "hey we have updated our app to not be as crappy, you can browse reddit for free if you switch back".

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