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June 9, 2023updated 12 Jun 2023 4:07pm

Reddit apps to shut down over API pricing hike which could see bills hit $20m a year

Reddit says its corpus of data is "very valuable" and so is charging developers to access the dataset and APIs.

By Ryan Morrison

Some of the most popular apps and bots on Reddit will shut down at the end of the month after a major hike in the cost of using the site’s API. The price is going from a few dollars for 50 million API calls to $12,000. The move mirrors one introduced by Elon Musk at Twitter earlier this year, and one expert told Tech Monitor data scraping to feed generative AI models was in part to blame for the shift in API pricing.

Reddit is increasing the cost of its API access to make money from its "valuable" data corpus (Photo: Stanislau Palaukou / Shutterstock)
Reddit is increasing the cost of its API access to make money from its ‘valuable’ data corpus (Photo by Stanislau Palaukou / Shutterstock)

Announcing a series of changes to the popular community platform in April, Reddit CEO Steve Huffman described the Reddit corpus of data as “really valuable”. He told the New York Times: “We don’t need to give all of that value to some of the largest companies in the world for free.”

He said the value comes from the conversational nature of the platform and the fact it is constantly updated. “More than any other place on the internet, Reddit is a home for authentic conversation,” Huffman explained.

At the time it was assumed this meant charging large companies like Microsoft and Google for using Reddit data in training AI models or in their products. It has since become clear the charges will apply across the board.

“The price they gave was $0.24 for 1,000 API calls,” said Christian Selig, developer of popular Reddit app Apollo. Writing on Reddit yesterday evening, he explained: “I quickly inputted this in my app, and saw that it was not far off Twitter’s outstandingly high API prices, at $12,000, and with my current usage would cost almost $2m per month, or over $20m per year.”

That is clearly unsustainable for a small developer and even more so for the hobbyists and open-source developers building free bots and plugins that add features not offered by Reddit.

Reddit met with a group of high-profile developers on the charges yesterday where they were told there was no room for negotiation on pricing for commercial tools but could pause the start of the plan for some developers. The company says it will exempt any non-commercial accessibility-minded app, bot or tool – although they will be API rate limited.

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It says it will also work to add new features to the app to match those of commercial apps that close down. Priorities include building mod tools, improving the core platform, accessibility and introducing a new dev platform.

Is Reddit open to fair pricing? 

Twitter has opened the prospect of offering a free tier to apps deemed “valuable to the platform” after backlash from developers. This same concession was made to Reddit developers on the call with Reddit staff. Despite the concessions, which also included some other non-commercial free API access, the developer group weren’t sold on the changes.

“We don’t believe enough effort and time has been given to the discussion and negotiation between Reddit and third-party apps and the schedule for these changes is not reasonable,” they wrote in a subreddit post. “We would like greater effort to find a solution that preserves the openness of Reddit, the utility of non-official implementations (and that utility includes, but is not limited to accessibility and mod tools), while addressing Reddit’s concerns about costs being pushed entirely to Reddit and the lack of control around the ads being served with some third-party apps.”

Selig says he isn’t opposed to paying, it’s just the price and sudden introduction that is presenting a problem. He said: “In a perfect world I think lowering the price by half and providing a three-month transition period to the paid API would make the transition feasible for more developers, myself included. These concessions seem minor and reasonable in the face of the changes.”

Subreddits to ‘go dark’ for 48 hours

In the meantime, a campaign has started on Reddit that will see some of the biggest subreddits go dark for 48 hours with no content shared. This, according to campaign subreddit “save 3rd party apps” is designed to get the company to reconsider.

The group posted that the policy “threatens to kill many beloved third-party mobile apps, making a great many quality-of-life features not seen in the official mobile app permanently inaccessible to users.” They warn it will also kill off bots that subreddit moderators depend on that are “only available outside the official app to keep their communities on-topic and spam-free.”

Kevin Gosschalk, founder and CEO of fraud prevention company  Arkose Labs, said the problem is large amounts of data being scraped from sites like Reddit and used for nefarious purposes. “This problem goes way beyond Reddit,” he says. “The core issue is that bad actors are using bots to create generative AI, and it’s affecting all social platforms.”

Gosschalk says the increasing API fees are a direct result of generative AI.  “Bots are scraping sites for content to train large language models, profiting from this data, and circumventing API fees completely.” The problem facing social networks like Reddit, says Gosschalk, is that the scraping and training is impacting legitimate paying users of their APIs. But that  balance is needed between protecting data and supporting developers. “It’s important to understand not all bots are bad bots, it’s not all bad actors,” he says. 

He adds: “The pushback against fees is harsh, so I believe we’ll see fees adjusted before they go live, but platforms will eventually find themselves in the same situation again if they don’t find a solution.” In order to find balance, platforms will need to differentiate scraping data use cases from the app usage style cases, Gosschalk argues. “This is a way to tell the good bots from the bad,” he says.

Read more: Twitter API charges could put it at risk of EU fines

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