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Thursday, June 1, 2023

Reddit Will Begin Charging for Access to its API

Reddit Will Begin Charging for Access to its API – In the wake of Twitter’s move to limit third-party access to its data, Reddit has declared that it will introduce charges for utilizing its API. However, according to The New York Times, this will not be a universal policy shift. Reddit’s API will continue to be accessible for free to developers who intend to create applications and bots that assist users in utilizing Reddit, as well as to academics or non-commercial researchers studying Reddit.

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.” Reddit is seeking methods to generate revenue from its extensive range of user-generated content, as stated by The Times, which has been used more frequently to train popular text-generating machine learning models. 

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In 2019, Reddit had more than 430 million active monthly users spread out over 1.2 million specialized interest communities, with 138,000 of them being active. According to The Times, Huffman expressed his belief that Reddit data is highly valuable due to its constant updating. “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.”  The driving force behind this move may be shareholders, as Reddit has not yet revealed the specifics of its API pricing. However, with the company getting ready for a potential initial public offering in the later part of this year, investors will be seeking expansion or entirely new revenue streams. 

As of August 2021, Reddit was valued at approximately $10 billion, and it is believed to have earned $350 million from advertisements two years prior. However, this sum is significantly lower when compared to Meta’s and even Twitter’s advertising revenue.  In 2022, Meta generated $113 billion, while Twitter, despite its numerous controversies, earned nearly $7 billion. 

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Regarding the modification of the API policy, Reddit announced its aspiration to increase the integration of AI into the site’s functioning.  This includes identifying the presence of AI-generated text on Reddit and attaching a label to inform users that the comment may have come from a bot. Reddit also intends to enhance its moderation tools and the third-party bots that aid moderators in supervising the forums.

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