The company wants to charge for API access. Its volunteer moderators have other ideas
Steve Huffman, the co-founder and CEO of Reddit $RDDT, is entering the second week of a flame war against his website’s volunteer moderators. The two camps have feuded over how Reddit wants to monetize its data—a decision that could change the way the popular social media website interfaces with the rest of the open web.
In April, Reddit announced it would start charging for third-party access to its application programming interface (API), which lets outside software interact with its website. The subtext for the new policy was clear: As large language models like OpenAI’s GPT-4—the force behind ChatGPT—become powerful technologies and fuel profitable businesses, Reddit wants to get paid when they’re trained on its data.
Moderators of many of Reddit’s most popular subreddits, however, began revolting after it became clear that the company wouldn’t merely target the biggest artificial intelligence firms but also smaller developers like Apollo, which makes an alternative mobile app experience of Reddit, and third-party moderation tools they depend upon to monitor their communities.
Apollo announced it will shut down its service on June 30—the day before the new Reddit policy goes into effect—because it simply can’t afford the $20-million-a-year bill that Reddit would charge under the new plan. “Going from a free API for 8 years to suddenly incurring massive costs is not something I can feasibly make work with only 30 days,” Apollo founder Christian Selig wrote in a Reddit post. (Reddit is charging $12,000 for 50 million API requests. Apollo has said it made seven billion requests just in May.)
In protest, Reddit moderators took their communities dark. Popular subreddits like r/music and r/science went private—turning away outside eyes and new users—to make a statement against the company’s decision. Some communities have reverted while others have promised to stay private until Reddit changes its mind.
But Huffman hasn’t relented in his plan to charge for API access; rather, he’s dug in his heels. “We’re 18 years old,” he told NPR in an interview. “I think it’s time we grow up and behave like an adult company.” A Reddit spokesperson said the company is “not planning any changes to the API updates” at this time.
While Reddit management has a long history of warring with its mods, this particular skirmish isn’t likely to break its way. Reddit’s quest for more income jeopardizes the free labor it’s built on—the entire structure of the company. It’s betting that the financial windfall from invoicing AI companies like OpenAI, Microsoft $MSFT, and Google $GOOGL will exceed any losses from sticking it to its mods. But in going head-first against its army of free labor, Reddit might be betting the house on this proposition.
The idea of profit maximization isn’t foreign to Reddit. It’s been on a collision course toward an initial public offering (IPO) for years. Financial motivations have improved the site in one distinct way: The advent of advertising on Reddit motivated the company to toughen its content policy against hate speech and remove some of the more odious communities on the platform.
Reddit’s communities all have to follow site-wide rules, but individual subreddits—often centered on specific interests—are run by volunteer moderators who set rules for who can post and what they can say. While most other social media companies pay professionals to moderate content on their platforms, Reddit’s decentralized setup has made the volunteer system viable. It’s perhaps most similar to how Wikipedia functions with volunteer editors, who not only write and edit articles but also police the site for misbehavior.
But Wikipedia is run by a nonprofit. Reddit is quite the opposite, trying to massively scale its business through a public offering. So the volunteer moderation system is both Reddit’s biggest asset—an unpaid labor force—and its biggest liability—mods get a say in how the site is run.
In a post, the moderators of r/funny warned the API changes may give Reddit “the appearance of being more profitable than it truly is” and in the long term “will undermine the platform as a whole.” They insisted the new policy will harm their ability to moderate content on the subreddit and hurt consumer choice. “Without effective tools, moderators cannot combat spammers, bad actors, or the entities who enable either; without the freedom to choose how and where they access Reddit, many contributors will simply leave.”
The moderators of r/gaming reopened the subreddit under pressure from Reddit management, but said they were “disappointed” in Huffman, whom they called “the Kmart version of Elon Musk.” (In March, Musk announced he’d be charging $42,000 per month for access to Twitter $TWTR’s API.)
Reddit is under no obligation to make its API free. But, it seems, the company has overreached in enforcing the new policy. If its target is the largest AI firms, then it should focus on curbing their parasitic proclivities and not going after beloved and useful software its users and moderators depend on.
The business of social media is ultimately one that involves monetizing free content, but Reddit is also trying to do so atop a system of free labor, and that won’t fly without moderator buy-in.
As a publicly traded company, it will have the legal responsibility to maximize profits and boost shareholder value. But unless Huffman figures out a new way to run his website, Reddit will always need to maximize moderator happiness too.
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