
Since 2005, Reddit has been a hub for conversations regarding all sorts of topics, ranging from cats and investments to celebrity interviews and edgy memes. Currently, the website sees over 57 million people active daily. Late 2021 saw Reddit file for an IPO as the company sought to achieve profitability. As part of this process, the website has started charging for access to its application programming interface. This decision has raised the ire of many voluntary moderators who depend on third-party applications to take care of Reddit's 100,000+ subreddits. Although the new costs went into effect on July 1, amid pressure from Reddit admins, most communities were reopened. That said, there is still a feeling of unrest, with some suggesting that Reddit's most passionate users should look elsewhere if they don't want to be let down again. David DeWald, a moderator of the r/Arcade1up subreddit and a community manager for the telecommunications company Ciena, stated: “Reddit is nothing without those communities. They need us far more than we need them.”
When Alexis Ohanian and Steve Huffman were both seniors in the University of Virginia, Y Combinator had just started. They had encountered Paul Graham at a lecture, and he proposed that the two fresh graduates construct "the front page of the Internet." Ohanian and Huffman accepted without uncertainty. Y Combinator invested a mere $12,000 in 2005 and Reddit formally became part of its initial set of companies. “For the initial almost a month and a half, a hefty portion of the people posting were just me and Steve using usernames we just created from items in the area, completely random stuff just to make it seem like there was some activity,” Ohanian commented.
Shortly after its founding, Reddit was acquired for $10 million by Condé Nast. By 2010, its co-founders had stepped back from daily operations, but the activity of users had continued to rise. This led to the company being spun out as an independent entity in 2011, operating as a subsidiary of Advance Publications, the owner of Condé Nast.
Ohanian noted that at the time, the trend was to focus on growth, which had been shown to be successful in the case of Facebook. On one hand, Reddit's niche groups provided a great opportunity for targeted advertising, yet its lax attitude toward potentially questionable content could have posed a problem.
Debra Aho Williamson, an analyst for Insider Intelligence, said Reddit made for a great advertising environment because its communities could be so passionate about the topics they discuss. Nonetheless, Reddit has dealt with issues regarding hate speech and other things that do not reflect well on brands.
In 2014, Ohanian rejoined Reddit as executive chairman, with Huffman following as CEO the next year. They wanted to address the site's more problematic subcultures. This ultimately culminated in the banning of several thousand subreddits in 2020, after George Floyd's death and Ohanian's resignation, which asked for his replacement with a Black candidate—a move the company honored.
The pandemic of 2020 led to a surge of engagement on Reddit, and soon after, users in the subreddit r/wallstreetbets organized a GameStop short squeeze. The popularity of what would be called "meme stocks," such as AMC, kept Reddit in the news for months. Advertising was at an all-time high when the company filed for an IPO that same year.
In April, Reddit announced plans to start charging for access to its API, the gateway which enables companies to download user-generated content. This posed a problem for many of the third-party apps and moderator tools which used the API, as the pricing structure was implemented without a significant grace period. The cost of operating one of the most popular third-party apps, Apollo, was estimated to be over $20 million per year, leading to its closure, along with other popular apps such as rif is fun, Reddplanet and Sync. While Reddit's official app only arrived in 2016, its users found the third-party options more user-friendly and feature-rich. Now, to generate a profit, Reddit wants companies, such as OpenAI and Google, to pay for its data.
A particular outcry ensued in a subreddit for blind users, who depended upon the accessibility features of multiple third-party apps. Blind moderators expressed that it is exceedingly difficult to manage the Reddit app on a mobile device, something Reddit claimed they are attempting to address. 8,000 subreddits participated in a widespread blackout from June 12 to June 14 in order to demonstrate their disapproval of the pricing changes. Several communities stayed closed much longer, while others identified themselves as "Not safe for work," making them unsuitable for advertising. The majority of communities have resumed typical operations, but a few significant exemptions exist. For example, the r/pics and r/gifs subreddits now only feature John Oliver's pictures and gifs. The moderators of the popular Ask Me Anything subreddit asserted they will not host interviews with influential personalities or celebrities, which was a significant source of interaction.
Tyler Croach commented, "Rather than destroy everything, they are expressing, 'hey, you didn't listen to me then, can you listen to me now?'" Reddit is introducing a few new moderator tools for its native app, yet many moderators remain dissatisfied with the company's response. While conversing with NBC News, Huffman likened moderators to "landed gentry," and articulated that the authority they have over the communities they moderate is undemocratic. As Reddit moves closer to an IPO, onlookers are interested to see how these issues develop.
DeWald from the r/Arcade1up subreddit said, "Everyone is passionate about Reddit's success. The tech world is attentive to examine how these disputes play out. Reddit needs to comprehend that the enthusiasm is the reason behind all the fury. They must cooperate with us and other moderators, along with app developers, to come up with a solution that caters to everyone, even Reddit, as they require us to be there."
Watch the video to get more information on Reddit's rise and how the recent disputes could possibly influence the company's future.
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