Following Twitter’s decision to limit third-party access to its data, Reddit today announced it will begin charging for the use of its API.
It is not a general policy change. As reported by The New York Times, Reddit’s API remains free for developers who want to build apps and bots that help people use Reddit, as well as researchers who want to study Reddit for strictly academic or non-commercial purposes.
But companies that “crawl” Reddit for data and “give none of that value back” to users will have to pay,” 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 to monetize its vast array of user-generated content, which, as The Times points out, is increasingly being used to train high-profile, text-generating machine learning models like OpenAI’s ChatGPT and GPT-4 . As of 2019, Reddit had over 430 million monthly active users in over 1.2 million special interest communities, of which 138,000 are active.
Huffman told The Times that he believes Reddit data is particularly valuable because it is constantly updated.
“Reddit’s data base is really valuable,” he reiterated. “More than any other place on the internet, Reddit is a place for authentic conversations. There’s a lot on the site that you’d say only in therapy, or AA, or never at all… But we don’t have to give all that value to some of the world’s largest companies for free. ”
Shareholders could be the motivator. Reddit has not yet announced the details of its API pricing. But the company is gearing up for a possible IPO sometime later this year, and investors will be looking for growth in — or entirely new — revenue streams.
Reddit, which was valued at around $10 billion in August 2021, made an estimated $350 million from ads two years ago. That total pales in comparison to the advertising revenue of 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 it hopes to integrate more AI into the site’s operation, for example identifying the use of AI-generated text on Reddit and adding a label that users warns that a comment may say “I came from a bot. Reddit is also working to improve its moderation tools and third-party bots that help moderators monitor its forums.