Reddit is caught between a rock and hard place. With the emergence of artificial intelligence (AI) that threatens to disrupt how people find information online and a massive boycott brewing in reaction to a move the legacy social media platform took to bolster itself, the company, which counts an obscene 57 million daily users, is finding out that existence as a "tech darling" doesn't get any easier even after you successfully "scale." If anything, Reddit's current situation only shows the ground it was built on – essentially, advertising and data extraction – was always soft.
If you haven't heard, there's a mass protest going on of Reddit – spurred by developers who say they are getting burned by a recent strategic decision by Reddit to start charging for its application programming interfaces (or APIs, essentially the bridges needed to access the site and its data if you want to build something on it). Hundreds of subreddits have taken themselves "private" and several third-party apps are turning their backs on the website, which is looking to go public sometime this year.
Sometimes called the "homepage of the internet," Reddit is a website that allows people to aggregate news and memes and form communities to discuss…anything. It's big, too, with some of its semi-autonomous subreddits growing to have tens of millions of engaged users. And so, Reddit has found itself with a trove of valuable data and information – one that replenishes itself on the daily.
For years, Reddit has allowed web browsers to crawl its message boards, a mutually beneficial relationship for itself and services like Google – both of which became dominant platforms by establishing themselves as the places to go if you have a question. The rise of "large language models" (LLMs) by the likes of ChatGPT, which are built and can only improve by ingesting vast quantities of data (i.e. everything available online to be read), have turned this relationship on its head.
In a Q&A on Friday, Reddit CEO Steve Huffman the company was rethinking its stance of giving "its corpus of data" away for free. It will now charge app developers for access that used to be, and it appears that a lot of information posted by users over the years will be packaged up and sold (possibly, that last part is semi-informed speculation). There are a few reasons why this is so, stated by Huffman (and, if not, easy enough to intuit).
First, Reddit has always struggled with profitability – a situation that was often encouraged during the age of "blitzscaling," when private funders would pump companies full of cash so they could grow and grow and eventually, down-the-line earn a return – but is less attractive now in the post-zero interest rate (ZIRP) economy where capital is harder to come by just as Reddit readies to go public. Second, Elon Musk started charging for Twitter's APIs – and while many complain about his manic leadership, Twitter's competitors and peers may have noticed the blue bird is still alive. Relatedly, Huffman claims the company somehow spends "multi-millions of dollars" per year allowing third-party access to its data.
Third, AI chatbots grown fat on Reddit's data are coming to eat Reddit's lunch. While LLM-based chatbots today are most akin to parlor tricks with little engagement beyond superusers and prompt magicians, it seems like the entire tech ecosystem is preparing for a day when ChatGPT and Bard stop hallucinating and disrupt all of today's existing online services. Why crowdsource a response from Reddit, if there's a machine that promises the wisdom of the crowd distilled into a personalized response? Which can be re-prompted again and again without getting annoyed, or telling you to "check Google,"
Whether or not today's protesters care about the company's attempts to eke out new revenues and defend itself against the Robot Swarm, they're still mad. And it doesn't seem like the type of knee jerk anger that has boiled up anytime Reddit updates its layout (which may be surprising given that Reddit has never not looked like Craigslist). In a Reddit post, the boycott organizers said the charges are "a step toward killing other ways of customizing Reddit." Others say the site, which, again, is almost two decades old, is unusable without a third-party access point.
And to be fair, Reddit only developed its own app in 2016, giving a lot of time for users to grow accustomed to alternatives like Reddit Is Fun and Apollo. Not only are these apps now being asked to pay potentially millions of dollars per year for the privilege of bringing users to Reddit, but many of them also contribute unpaid benefits to the site. Many of the site's volunteer moderators, reportedly, use these bespoke apps, for instance.
Now, dear The Node reader, what does all this have to do with crypto? Or how can it help you earn money? Well, depending on how the situation shakes out it could have a few implications for crypto as a social movement. Obviously, the ability for a company to make unilateral decisions that severely affect users is a Big Plus for a movement that is advocating for transparency, open access and user control. Perhaps an enterprising lad, laddess or ladx could build the next Reddit, only decentralized.
However, in a way, the situation might also count against crypto – if the boycott is successful. To the extent that platforms like Ethereum just want to be the substrate of a better web – a situation that requires people to build and maintain alternative applications and for users to migrate over, starting fresh on a new social network, all for the hardly-assured hope things would be better if you give people a share in the platform – then people might find that blockades are better than blockchains for getting what they want. Mass protests are picking up steam in America, and might be weaponized against companies like Facebook and Google to improve things like their privacy standards (if only most people cared) – which would certainly be easier than trying to outcompete them in the platform wars, and at least you get to keep your username.
Like many of its peers founded during the heady days of Web 2.0 (circa 2005 for Reddit), Reddit once preached the idea that social networks would "democratize" access to information and be a force for good worldwide. Overtime, like other venture capital-fueled companies, the site implemented more restrictive terms-of-use and moderation practices both out of some user's requests and to protect itself from litigation.
But unlike, say, Facebook, Reddit has arguably stayed closer to its roots – allowing many communities to self-police and retaining a more permissive stance towards what users can post about. In this sense, although its massive corporate-run behemoth that uses the same data-extractive techniques perfected by Zuckerberg, there's always been an affinity between the world of Reddit and crypto (which is at least part of the reason why Reddit's embrace of non-fungible tokens found success).
If the crypto world wanted to nudge the wider tech scene towards adopting more of its tenets, it turns out the power was always in its hands. You may not need a carrot of a governance token if you have the stick of a consumer walkout to gain greater say in a platform. By and large, however, I suspect most people do not care about the decisions made by their favorite internet platforms, and are happy to trade away their data for access to a free service. This isn't to say that crypto is unnecessary, either.
What the Reddit situation also reveals is the perverse incentives baked into platform capitalism. Except for a handful successful examples, the dream that advertising could pay for web services to remain free forever was likely a sham – putting aside the surveillance that allowed it all to function. Reddit, despite its tens of millions daily users, may never consistently turn a profit.
Crypto offers an alternative in that it requires buy-in from users, and makes the economic costs of online interactions explicit. This system may not fair any better, if it ever truly get going, but it might be nice to have the option of opting out. This is more than a boycott than a quiet revolution, which wants to empower users to pay their own way. And it may be more and more important, as even more of your data goes to AIs, which will, it's almost inevitable, be trained to show you exactly the right ad at exactly the right time.
– D.K.
@danielgkuhn
daniel@coindesk.com
