Reddit is going to start charging for use of its API

Reddit today disclosed that it will start charging for use of its API, following Twitter’s decision to limit third-party access to its data.

It’s not a general policy adjustment. The New York Times reported that researchers who want to study Reddit for strictly academic or noncommercial purposes as well as developers who want to create apps and bots that help people use Reddit will continue to have access to Reddit’s API for free.

However, according to Reddit co-founder and CEO Steve Huffman, businesses that “crawl” Reddit for data and “don’t return any of that value” to users will be required to make payments.

We should tighten things up now, according to Huffman. “We believe that is just.”

The decision was made at a time when Reddit is attempting to make money off of its enormous library of user-generated content, which, as The Times points out, has been increasingly used to train well-known, text-generating machine learning models like OpenAI’s ChatGPT and GPT-4. Reddit had over 430 million monthly active users as of 2019 and over 1.2 million active special interest communities.

Reddit data, according to Huffman, is particularly valuable because it is updated frequently, The Times reported.

He said again, “The Reddit corpus of data is really valuable. “Reddit is a home for real conversation more than any other website on the internet. Many things on the website are things you would only ever say in therapy, AA, or never at all. But we don’t have to provide some of the biggest companies in the world with all of that value for nothing.

The drive could come from the shareholders. Reddit has not yet disclosed the specifics of its API pricing. However, the business is getting ready for a potential IPO later this year, and investors will be looking for increased revenue or entirely new sources of income.

Reddit, which had an estimated August 2021 market value of $10 billion, is thought to have generated $350 million in advertising revenue two years prior. That sum is insignificant in light of Meta’s and even Twitter’s advertising revenues. In 2022, Meta earned $113 billion while Twitter, despite its numerous controversies, earned close to $7 billion.

Reddit today announced that it hopes to integrate more AI into how the site functions, including identifying the use of AI-generated text on Reddit and adding a label that alerts users that a comment may have been made by a bot. This announcement is related to the change in API policy. Reddit also wants to enhance the third-party bots that assist moderators in keeping an eye on the forums and its moderation tools.