Reddit API Changes Could Cost Popular App Developer $20 Million

Reddit API Changes Could Cost Popular App Developer $20 Million

Reddit’s plan to introduce charges for API access is causing concern among developers, potentially forcing the creator of the popular third-party Reddit app, Apollo, out of the market. The sole developer of Apollo, Christian Selig, has voiced alarm over the new API pricing, estimating that he would need to spend millions of dollars to maintain his app under the new policies.

Last month, Reddit announced significant changes to its API rules, citing the exploitation of its platform by AI companies to train large language models. Reddit CEO Steve Huffman explained the value of the platform’s data, stating that the company no longer wanted to provide this value to large companies for free.

However, it appears that independent app developers will also face the impact of these more expensive plans, set to take effect on June 19th. Although Reddit has not publicly disclosed its API pricing, Selig claims that he would have to pay $20 million annually to continue operating Apollo “as-is” under the new policies.

Selig expressed his concerns in a Reddit post, referring to conversations he had with Reddit representatives regarding the upcoming API changes. He highlighted that the cost of 50 million API requests would amount to $12,000, a figure far beyond his expectations. Given that Apollo made 7 billion requests last month, Selig estimated the app’s costs would reach approximately $1.7 million per month or $20 million per year.

These exorbitant costs put Selig and Apollo in a challenging position. Despite offering subscriptions, the app’s current revenue is insufficient to cover the steep API expenses. Selig explained that the average user makes around 344 API calls per day, requiring a subscription price increase to at least $2.50 per month (currently most subscribers pay $0.99 per month). Furthermore, this does not account for Apollo’s power users, who utilize the app at much higher rates, nor the app’s free users. Selig stated that even with the existing subscription-only users, he would face substantial monthly losses.

In response to Selig’s claims, a Reddit spokesperson stated that Selig was provided with “pricing per 1,000 API calls, not a monthly bill,” without revealing further details. The spokesperson explained that Reddit’s pricing is based on usage levels to ensure fairness and that they are actively working with third-party apps to enhance efficiency, which can significantly impact overall costs.

These developments echo Twitter’s drastic changes to its API policies under Elon Musk, where the company banned third-party client apps while imposing exorbitant fees on researchers and businesses that previously relied on extensive access to Twitter data.

Although Reddit has not displayed outward hostility toward developers, similarities can be drawn between its new developer rules and Twitter’s actions. Selig acknowledged that he had engaged in multiple discussions with Reddit, during which representatives were communicative and civil about the upcoming changes. A Reddit spokesperson emphasized the company’s commitment to fostering a developer ecosystem around Reddit, acknowledging the value third-party apps bring to the platform.

Nevertheless, Selig remains uncertain about how to navigate the changes and expressed his financial constraints, stating that the situation requires careful consideration. The future of Apollo and other third-party Reddit apps hangs in the balance as the implementation of the new API pricing approaches.