After Twitter restricted third-party access to its data, Reddit announced it would begin charging for its API, reports TechCrunch. This change is not a general policy, and the API will remain free for developers building apps and bots that help people use Reddit, as well as for researchers studying Reddit for academic or non-commercial purposes.
However, companies that scan Reddit for data and return no value to users will have to pay. Reddit co-founder and CEO Steve Huffman said it’s time for the service to tighten the rules and that they think it’s fair.
The move comes as Reddit looks for ways to monetize its vast array of user content, which is increasingly being used to train well-known text-generating machine learning models such as OpenAI’s ChatGPT and GPT-4. As of 2019, Reddit had over 430 million monthly active users in over 1.2 million communities of interest, of which 138,000 are active. Huffman believes Reddit’s data is particularly valuable because it’s constantly updated and home to authentic conversations.
While API pricing details have not been announced, Reddit is preparing for a potential initial public offering sometime later this year, and investors will be looking for revenue growth or entirely new revenue streams. Reddit, which was valued at around $10 billion in August 2021, earned $350 million from advertising two years ago, far less than Meta and Twitter’s ad revenue. In 2022, Meta earned $113 billion, and Twitter – almost $7 billion.
In addition to the API policy change, Reddit intends to introduce more AI to the site, such as identifying the use of AI-generated text on Reddit and adding a label to notify users that a comment may have come from a bot. Reddit also plans to improve moderation tools and third-party bots that help moderators monitor forums.