Following on the heels of Twitter’s decision to restrict third-party access to its data, Reddit announced today that it will begin charging for use of its API.
It is not a general policy change. As The New York Times reported, the Reddit API will remain free for developers who want to build apps and bots that help people use Reddit, as well as for researchers who want to study Reddit for strictly academic or non-commercial purposes.
But companies that “crawl” Reddit for data and “return none of that value” to users will have to pay,” Reddit co-founder and CEO Steve Huffman told The Times.
“It’s a good time for us to adjust things,” Huffman said. “We think that’s fair.”
The move comes as Reddit looks for ways to monetize its wide range of user-generated content, which, as The Times notes, has been increasingly used to train high-profile text-generating machine learning models like ChatGPT and GPT. -4 from OpenAI. As of 2019, Reddit had over 430 million monthly active users in over 1.2 million special interest communities, 138,000 are active.
Hoffman told The Times that he believes Reddit data is particularly valuable because it is continually updated.
“Reddit’s corpus of data is really valuable,” he reiterated. “More than anywhere else on the internet, Reddit is a home for authentic conversations. There’s a lot of stuff on the site that you’d only say in therapy, or AA, or never at all… But we don’t need to give all that value to some of the biggest companies in the world for free. ”
Shareholders could be the motivator. Reddit has yet to announce pricing details for its API. But the company is gearing up for a potential initial public offering sometime later this year, and investors will be looking for growth, or entirely new streams of income.
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 the ad revenue from Meta and even Twitter. 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 said today that it hopes to incorporate more AI into how the site works, for example, to identify the use of AI-generated text on Reddit and to add a tag that notifies users that a comment could come from a bot. Reddit is also aiming to improve its moderation tools and the third-party bots that help moderators monitor forums.