Reddit has announced that it will begin charging companies for access to its API, following in the footsteps of Twitter’s recent decision to restrict third-party access to its data.
Reddit’s API will remain free for developers who build apps and bots that assist users in using the platform, as well as for researchers studying the site for academic or non-commercial purposes. However, companies that crawl Reddit for data without providing value to users will be required to pay for access.
Reddit CEO Steve Huffman emphasized the value of Reddit’s continuously-updated data and the importance of ensuring that the site’s value is not given away for free to the world’s largest companies. The move comes as Reddit seeks new ways to monetize its vast array of user-generated content, including training high-profile, text-generating machine learning models such as OpenAI’s ChatGPT and GPT-4. Huffman also acknowledged that the company is preparing for a potential initial public offering later this year, and investors will be looking for growth in revenue.
Reddit, which was valued at $10 billion in August 2021, made $350 million from ads two years ago. This figure is far lower than Meta’s and Twitter’s ad revenues, with Meta making $113 billion in 2022 and Twitter earning nearly $7 billion. The company has not yet announced the details of its API pricing.
In related news, Reddit also announced that it plans to incorporate more artificial intelligence into the platform’s operations. This includes identifying the use of AI-generated text on Reddit and labeling comments that might have come from a bot, as well as improving moderation tools and third-party bots that assist moderators in monitoring forums.
The move to charge companies for API access reflects a broader trend among social media companies to monetize their user data. While some have criticized this as a potential infringement on users’ privacy and autonomy, companies argue that it is necessary to sustain the platform’s growth and provide value to investors. As Reddit prepares for a potential IPO, it remains to be seen how this shift will affect the platform’s user experience and engagement.