I mean, I get that Reddit isn’t making money. And that during the growth phase of a dot-com, it’s okay to burn money in the name of growing the userbase, but that he has to transition to making money at some point. Investors gave him money, hundreds of millions, if I recall correctly, in the expectation that he can generate a return. He’s getting near the point where he has to do that. And the return they’re going to expect is going to be in the neighborhood of what other dot-coms can generate from their investment.
Like, the people yelling at him for being “greedy” in that he’s aiming to make Reddit generate a return at all aren’t realistic. That is something that always was going to have to happen, from the day that Reddit started. If you look at the issues that the moderators are taking up with him, they’re trying to come up with a way that Reddit makes money and their concerns are also met.
The problem is that some of the moves he’s making to try to make a return have really negative impacts, and a number of people want something that has less of a negative impact.
If the Fediverse can support similar functionality based purely on cash donations, or based on some other model (e.g. Usenet runs on software developed by the community, but generally one has to pay a commercial Usenet provider for service to cover the costs), or a “users donate resources” like BitTorrent and provide a better experience, then that’s great. But the Fediverse is also going to have to figure out how to handle the costs of hardware and software development and all that, if it wants to be a competitive alternative. There are some hard questions that may come up down the line for the Fediverse too. The long term for something the scale of Reddit cannot be Earnest paying all of the money out of his personal pocketbook to Cloudflare to handle ramping up kbin’s capacity or something like that from the main Lemmy instance operators.
Right now, I haven’t seen any ads on the Fediverse, and I haven’t yet donated money to Earnest (though he apparently does have a “buy me a coffee” tip jar and people have sent him small gifts). Which means that right now, I’m relying on the gift of resources from Earnest and some Lemmy instance operators to me. Maybe they can afford that for a small number of users. But end of the day, if many more users show up, they are going to have to find someone else to help bear the costs on an ongoing basis.
But he has so many better options. He could listen to his userbase and create a product they enjoy. Then explain his cost and ask for donations on the site (with a progres bar as wikipedia does). If you have goodwill in your userbase, you could even just ask people for money in a monthly fashion and give them some “Reddit Supporter” badge. Maybe a “Reddit Supporter” can then vote on the functionality that will be implemented in reddit.
If he’d communicate it well, he could even monetize the API fairly (let’s say 1-2x the ad revenue he would get with similar traffic) or monetize it on the user side (user has to pay e.g. $10 for yearly api key).
I can say for myself I’d be more than willing to donate to reddit if they asked for it and I had the feeling they were actually trying to listen to the userbase and improve the platform.
With his current behavior he’s just destroying any good-will of the userbase and therefore any direct monetization potential.
Oh, I’m not at all saying that he’s handling this in an ideal way. There is a laundry list of things that I think might be better-done. I mean, the very first thing for me would be him at least having an option to let people continue using the site the way they have been with a premium subscription. Might not be worth it for some, but for others, it would, and that immediately solves his problem for a lot of users, and maybe some of the most-fervently-opposed. I’d be willing to pay something for a subscription myself, especially since they already went to the work of setting up anonymized payments during the Bitcoin fad and a scheme for premium service. I don’t know if it’d be enough to make myself worthwhile to Reddit relative to what the company is going for, but I’d at least like to see their price point. Let me use a third party client as long as I have Reddit Platinum or whatever and then tell me what that costs each month.
I’m just saying that there is a substantial contingent that is really pissed off and who really does not think that he legitimately has to do something about Reddit cashflow. Like, asserting that Reddit losing money is just a lie, or saying that they just want any social media corporation to go down, that sort of thing. And, I mean, that’s just kinda decoupled from the financial obligations that he’s gonna be facing.
Any capable ceo worth their salt had to be thinking about this BEFORE their first round of funding, not 10 yrs later when they are “about to ipo”. Part of acquiring large amounts of funding is working thru these problems and having a concrete monetization plan. This isn’t something new and every single startup on this planet contends with resourcing and money. This problem isn’t unique to reddit and is a solved problem by other social media companies.
If it’s serving ads and selling user profiles, be transparent about it. Mandate 3rd party apps to serve ads meanwhile reduce the need of a staff to try and come up with a god awful app that can’t load a video. Pour said money into infra-scaling instead.
Use differential privacy policies, obfuscate private data and inform + ensure users that the data being sold is to generate revenue so that the site can stay in the green and go public AND that their privacy is first and foremost. You can literally invent GDPR like privacy controls and STILL monetize user profile while keeping users happy.
If I can solve this in 10 mins, Huffman doesn’t get a pass for being an idiot. Sorry, don’t mean to sound ranty and aggressive but any sort of justification for reddit is really defending malice on his part and I feel like this needs to be said, particularly to an audience that are (rightfully so) perhaps giving him the benefit of the doubt when they don’t know any better.
Hope this helps paint a better picture of why I keep calling this guy an idiot. :-)
The recent Reddit push has two underlying realities forcing a lot of companies/web services to push for other monetization:
The ad rates have cratered. The advertisers know users use ad blockers, and there will always be a whack-a-mole game going. So they’ve been demanding and getting lower rates.
The Silicon Valley model of throwing millions at a project for years without returns is shrinking fast. Between eroded trust (Theranos) and the investors not limited to venture capital firms, there is more and more calls for returns to be shown from these companies. They’re restricting the money bucket. So sites like Reddit have to look to other ways to generate money.
Spez has been blindsided by these developments when he should not have been.
I mean, I get that Reddit isn’t making money. And that during the growth phase of a dot-com, it’s okay to burn money in the name of growing the userbase, but that he has to transition to making money at some point. Investors gave him money, hundreds of millions, if I recall correctly, in the expectation that he can generate a return. He’s getting near the point where he has to do that. And the return they’re going to expect is going to be in the neighborhood of what other dot-coms can generate from their investment.
Like, the people yelling at him for being “greedy” in that he’s aiming to make Reddit generate a return at all aren’t realistic. That is something that always was going to have to happen, from the day that Reddit started. If you look at the issues that the moderators are taking up with him, they’re trying to come up with a way that Reddit makes money and their concerns are also met.
The problem is that some of the moves he’s making to try to make a return have really negative impacts, and a number of people want something that has less of a negative impact.
If the Fediverse can support similar functionality based purely on cash donations, or based on some other model (e.g. Usenet runs on software developed by the community, but generally one has to pay a commercial Usenet provider for service to cover the costs), or a “users donate resources” like BitTorrent and provide a better experience, then that’s great. But the Fediverse is also going to have to figure out how to handle the costs of hardware and software development and all that, if it wants to be a competitive alternative. There are some hard questions that may come up down the line for the Fediverse too. The long term for something the scale of Reddit cannot be Earnest paying all of the money out of his personal pocketbook to Cloudflare to handle ramping up kbin’s capacity or something like that from the main Lemmy instance operators.
Right now, I haven’t seen any ads on the Fediverse, and I haven’t yet donated money to Earnest (though he apparently does have a “buy me a coffee” tip jar and people have sent him small gifts). Which means that right now, I’m relying on the gift of resources from Earnest and some Lemmy instance operators to me. Maybe they can afford that for a small number of users. But end of the day, if many more users show up, they are going to have to find someone else to help bear the costs on an ongoing basis.
But he has so many better options. He could listen to his userbase and create a product they enjoy. Then explain his cost and ask for donations on the site (with a progres bar as wikipedia does). If you have goodwill in your userbase, you could even just ask people for money in a monthly fashion and give them some “Reddit Supporter” badge. Maybe a “Reddit Supporter” can then vote on the functionality that will be implemented in reddit.
If he’d communicate it well, he could even monetize the API fairly (let’s say 1-2x the ad revenue he would get with similar traffic) or monetize it on the user side (user has to pay e.g. $10 for yearly api key).
I can say for myself I’d be more than willing to donate to reddit if they asked for it and I had the feeling they were actually trying to listen to the userbase and improve the platform.
With his current behavior he’s just destroying any good-will of the userbase and therefore any direct monetization potential.
Oh, I’m not at all saying that he’s handling this in an ideal way. There is a laundry list of things that I think might be better-done. I mean, the very first thing for me would be him at least having an option to let people continue using the site the way they have been with a premium subscription. Might not be worth it for some, but for others, it would, and that immediately solves his problem for a lot of users, and maybe some of the most-fervently-opposed. I’d be willing to pay something for a subscription myself, especially since they already went to the work of setting up anonymized payments during the Bitcoin fad and a scheme for premium service. I don’t know if it’d be enough to make myself worthwhile to Reddit relative to what the company is going for, but I’d at least like to see their price point. Let me use a third party client as long as I have Reddit Platinum or whatever and then tell me what that costs each month.
I’m just saying that there is a substantial contingent that is really pissed off and who really does not think that he legitimately has to do something about Reddit cashflow. Like, asserting that Reddit losing money is just a lie, or saying that they just want any social media corporation to go down, that sort of thing. And, I mean, that’s just kinda decoupled from the financial obligations that he’s gonna be facing.
Any capable ceo worth their salt had to be thinking about this BEFORE their first round of funding, not 10 yrs later when they are “about to ipo”. Part of acquiring large amounts of funding is working thru these problems and having a concrete monetization plan. This isn’t something new and every single startup on this planet contends with resourcing and money. This problem isn’t unique to reddit and is a solved problem by other social media companies.
If it’s serving ads and selling user profiles, be transparent about it. Mandate 3rd party apps to serve ads meanwhile reduce the need of a staff to try and come up with a god awful app that can’t load a video. Pour said money into infra-scaling instead.
Use differential privacy policies, obfuscate private data and inform + ensure users that the data being sold is to generate revenue so that the site can stay in the green and go public AND that their privacy is first and foremost. You can literally invent GDPR like privacy controls and STILL monetize user profile while keeping users happy.
If I can solve this in 10 mins, Huffman doesn’t get a pass for being an idiot. Sorry, don’t mean to sound ranty and aggressive but any sort of justification for reddit is really defending malice on his part and I feel like this needs to be said, particularly to an audience that are (rightfully so) perhaps giving him the benefit of the doubt when they don’t know any better.
Hope this helps paint a better picture of why I keep calling this guy an idiot. :-)
The recent Reddit push has two underlying realities forcing a lot of companies/web services to push for other monetization:
Spez has been blindsided by these developments when he should not have been.