Following on the heels of Twitter’s decision to restrict third-party access to its data, Reddit today announced that it’ll begin charging for use of its API.
It’s not a blanket policy change. As reported by The New York Times, Reddit’s API will remain free to developers who want to build apps and bots that help people to use Reddit, as well as to researchers who wish to study Reddit for strictly academic or noncommercial purposes.
But companies that “crawl” Reddit for data and “don’t return any of that value” to users will have to pay up,” Reddit co-founder and CEO Steve Huffman told The Times.
“It’s a good time for us to tighten things up,” Huffman said. “We think that’s fair.”
The move comes as Reddit looks for ways to monetize its vast array of user-generated content, which as The Times notes has been increasingly used to train high-profile, text-generating machine learning models such as OpenAI’s ChatGPT and GPT-4. As of 2019, Reddit had over 430 million monthly active users across more than 1.2 million special interest communities, 138,000 are active.
Hoffman told The Times that he believes Reddit data is particularly valuable because it’s continuously updated.
“The Reddit corpus of data is really valuable,” he reiterated. “More than any other place on the internet, Reddit is a home for authentic conversation. There’s a lot of stuff on the site that you’d only ever say in therapy, or AA, or never at all … But we don’t need to give all of that value to some of the largest companies in the world for free.”
Shareholders could be the motivator. Reddit hasn’t announced the details of its API pricing yet. But the company is preparing for a potential initial public offering sometime later this year, and investors will be looking for growth in — or entirely new streams of — revenue.
Reddit, which was valued at around $10 billion in August 2021, is estimated to have made $350 million from ads two years ago. That total pales in comparison to Meta’s and even Twitter’s ad revenues. Meta made $113 billion in 2022, while Twitter, despite its many controversies, raked in nearly $7 billion.
In news related to the API policy change, Reddit today said that it hopes to incorporate more AI into how the site operates, for example to identify the use of AI-generated text on Reddit and add a label that notifies users that a comment might’ve come from a bot. Reddit also aims to improve its moderation tools and the third-party bots that help moderators to monitor the forums.