Reddit sparks outrage after a popular app developer said it wants him to pay $20 million a year for data access

By Brian Fung, CNN

Washington (CNN) — Twitter has been widely criticized for trying to charge transit agencies, third-party app developers and academics for data access to its platform, a move opponents say has forced independent apps to shut down and threatened research on misinformation and hate speech.

Now, a similar revolt against Reddit may be gaining steam after a popular app developer said Wednesday the social media company wants to charge him $20 million a year to continue offering software that lets Reddit users view and interact with the platform.

The newly unveiled pricing of Reddit’s paywall “is close to Twitter pricing” and is not “anything based in reality or remotely reasonable,” said Christian Selig, developer of the Apollo app, in a Reddit post on Wednesday. “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.”

Selig’s post highlights a plan Reddit announced in April to enact a Twitter-like pricing structure for its application programming interface (API) — the software that allows other programs to tap into the company’s data, including posts and comments. Reddit’s API is what allows Reddit content to be displayed to the Apollo app’s 900,000 daily active users.

Reddit’s initial announcement had been light on pricing details, leaving many to speculate about the future of third-party access to Reddit. As details of its pricing plan trickled out on Wednesday, Reddit did not dispute Selig’s account of his conversations with the company, but said Reddit remains “committed to fostering a safe and responsible developer ecosystem.”

“Expansive access to data has impact and costs involved, and in terms of safety and privacy we have an obligation to our communities to be responsible stewards of data,” said Tim Rathschmidt, a company spokesperson, in an email.

Selig’s tweet on the issue has been viewed more than one million times and has led to an outpouring of criticism for Reddit. “Apollo is the only reason I use Reddit,” one fan of the app tweeted. Another said: “Reddit is going full Twitter and it’s a big mistake.” .

Selig had initially expressed cautious optimism about the company’s plan, saying on the day of the announcement that he had spoken to the company and that if the new moves were implemented reasonably, “this could be a positive change.”

But now, a month later, Selig’s optimism has deflated. According to Selig’s post Wednesday, Reddit intends to charge $12,000 for every 50 million attempts to access the company’s data.

“Apollo made 7 billion requests last month,” Selig wrote Wednesdsay, meaning his additional costs simply for running his business as usual would add up to “1.7 million dollars per month, or 20 million US dollars per year.”

“I’d be in the red every month,” he added. Selig didn’t immediately respond to questions from CNN about whether he expects to have to shut down the app.

Selig isn’t the only app developer crying foul. Some developers have said Reddit’s API changes would also block ads in third-party apps, potentially depriving apps of ad revenue and forcing them to try to convert users to subscription business models.

Part of the motivation for Reddit’s plan involves the surging popularity of artificial intelligence.

Large language models such as ChatGPT are developed using training data, which in many cases is sourced from content found across the internet. Reddit should not be expected to provide that data to “some of the largest companies in the world for free,” CEO Steve Huffman told the New York Times in a recent interview.

Meanwhile, Reddit is also widely expected to go public, potentially as soon as this year. The stock offering could add to pressure for Reddit to show revenue growth. Its paid API could help on that front.

But that could come at the expense of independent apps and, as some pointed out, Reddit users who may experience a loss of choices in ways to access the platform. Some predicted that they might soon have to rely on Reddit’s proprietary app, which has been widely panned by users, if they wish to access the site at all.

The-CNN-Wire
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