Reddit's long-awaited IPO is approaching, and it's expected to be the biggest social media IPO since Pinterest. However, in the company's S-1 filing, Reddit fails to adequately address the complex issues arising from changes to its developer platform and API pricing. The changes led to site-wide protests, community blackouts, site stability issues, and a drop in traffic late last year. Moderators and Reddit users alike protested that the company is forcing popular third-party apps out of business by increasing API fees. Nor does it address the potential fallout from these protests, that Reddit itself could someday face competition from a growing movement to decentralize social media.
Reddit's API price changes were part of the company's broader plan to lock down the corpus of user-generated content that has been used to train its AI models. In that regard, Reddit's IPO prospectus touts the promise of this growing business, noting that it has already made $230 million to date by licensing its data to other companies. are doing. (Google is said to have contributed at least $60 million to the effort, according to a Reuters report on Reddit's AI licensing deal with the tech giant.)
No matter how beneficial it may be to Reddit's bottom line, the cash-hungry move sparked a huge backlash among the Reddit community. After learning that their favorite third-party Reddit apps (Apollo, Narwhal, etc.) would soon become victims of Reddit's fee changes, community members and moderators organized massive protests. Popular subreddits (the name for Reddit's online communities), including r/aww, r/video, r/Futurology, r/LifeHacks, r/bestof, and dozens of others, asked Reddit to reconsider their activities last June. It was shut down to put pressure on management.
Moderators also wrote an open letter attempting to explain how these app closures and changes would negatively impact how the community is managed, stating that the apps offer “great modding tools, customization, a streamlined interface, It wasn't on the official Reddit app, which I pointed out provides access to “Other Quality of Life Improvements.”
Moderators decided to extend the blackout when Reddit CEO Steve Huffman further emphasized Reddit's position and criticized the developer of Apollo, one of its most popular apps.
Later, when Reddit relaunched its online event r/place, which provides a giant digital canvas on which people can collaborate to draw, Reddit participants used the event to organize protests. He went on to write, “fuck spez” (a reference to Huffman's Reddit username). — all over the canvas, including one area that started to look like a giant black hole.
In the end, Reddit won the battle. The protests died down, the app went out of business, and Reddit traffic returned.
In its IPO prospectus, Reddit mentions its developer platform only as a way to enhance its site by building bots and creating features to “build a community.”
“We believe our developer platform has the potential to be a powerhouse for community-driven innovation and deepen the relationship between users and communities. We empower our users to continually create, improve, and grow. . And ultimately strengthens the community's community at scale,” said Reddit's S-1.
Of course, there's no mention of how it alienated a bunch of developers or how it threw the site into chaos for a time.
In reality, Reddit's move to disrupt developers' businesses, anger users, and now sell Reddit's user data to train its AI systems means the internet itself is experiencing a reboot of sorts. When you do that, you leave a lasting mark on your company.
In a web cluttered with SEO-optimized pages and junk ads, users are turning to alternative sources of information, such as AI chatbots. As his S-1 on Reddit hints, various Google hacks return pages from your own site. For example, add the keyword “reddit” to your search query.
But other changes are occurring across the social web that could ultimately impact Reddit and other centralized platforms.
After Twitter (now called X), like Reddit, changed its API fees to lock out third-party developers, many users fled to newer decentralized social networking platforms like Mastodon and Bluesky. Ta. The latter reached his 5 million user count within a few weeks of its public launch and started federation (which means anyone can run their own server). Meanwhile, Mastodon and its broader network of apps connected to the so-called “Fediverse”, a decentralized social web, have a total of 17.2 million users.
The driving force behind this growth has to do with consumer demand for a network no longer under the control of a single corporate entity and its various whims, or the network of eccentric billionaires following the sale of Twitter to Elon Musk. There is.
There are also smaller efforts underway to provide a decentralized alternative to Reddit.
Although still in their early stages, projects such as Lemmy, Kbin, Raddi.net, Aether, and Lime Reader are gaining momentum. Just as some Twitter users left to join decentralized alternatives, Reddit users can do the same once decentralized alternatives become viable.
Although Reddit doesn't acknowledge this due to S-1 risk factors, “influential Reddit users” or “certain demographics” may believe that “alternative products or services better meet their needs.” It is not just about claiming that there is a possibility of concluding. And he said Redditors can choose to participate in “other products, services, or activities as alternatives to ours.”
Of course, that's like saying: “Sure, someday we might have a competitor!” It does not delve into the broader movement to decentralize social media. Its power is so strong that even social networking giant Meta has started using it to support Mastodon, Pixelfed, PeerTube and other “federation” apps.
If Meta is joining this movement out of fear of the power of decentralized social networks, shouldn't Reddit be spared too?
Additionally, Reddit downplayed the possibility of community unrest as a result of administrative decisions, saying only that “disruption to the normal operations of the community may occur, including as a result of the actions or inactions of volunteer moderators.” Says.
Reddit moderators led a movement to shut down the community in protest, and the community was marked NSFW with no advertising, forcing Reddit to remove the protesting moderators. Seeing their requests ignored and disabled, they may eventually find a new home on decentralized social media, where they maintain control over their communities and user data.