If you inhabit a certain corner of the internet, populated by nerds and developers and music obsessives and shitposters (sometimes one and the same), you may have noticed some changes. Roughly 30 percent of Reddit is currently dark, with more than 2,000 subreddits—the individual community forums housed on the site, which are moderated by volunteers—involved in an ongoing protest of Reddit's decision to charge third-party app developers for access to the company's backend.
Though the protest was originally planned for June 12–14, many subreddits have extended their strike, as the initial coordinated action yielded no sign of reversal from CEO Steve Huffman. Thus, Reddit's saga is a case study in the perils of relying on user-generated content and volunteer moderators as a business model—and the extraordinary power of this decentralized model to push back on unpopular decisions made by the C-suite.
To understand Reddit's predicament, you must first understand its format: Users, who can have accounts for free, post content on individual subreddits, which are served by volunteer moderators who decide the rules for their specific community. This outsourced, decentralized content moderation format means mods are doing free work for the company and have a fair amount of power to protest higher-level decisions they dislike. It also frees the site from having to employ moderators.
The Washington Post's Megan McArdle writes:
You can imagine Reddit's business model as a kind of giant digital Goodwill store. Citizens with surplus time, ideas or complaints about the state of the world periodically stop by to donate things. At Reddit, volunteers sort through them, toss out the stuff that's truly gross and put the rest on display for customers to browse. If all goes well, this activity generates funds — Goodwill literally sells the goods, while Reddit sells advertising, subscriptions and virtual goods — enough to cover operating costs and then some.
The conventional wisdom has long been that if you're not paying for the use of a social media site, you are the product—meaning your data. In this case, Reddit isn't looking to start charging users, but it is looking to monetize their data, charging for application programming interface (API) access, which affects the third-party apps that many Redditors use to moderate, post, and read. As a result, many developers of third-party clients have said the API pricing is untenable, and that their products will no longer serve users. Huffman, meanwhile, says he will "continue to be profit-driven until profits arrive" (and plans to go public this year).
Interestingly, Reddit first "framed the decision as a response to generative AI companies that scrape its content to build their lucrative large language models while paying Reddit nothing in return," per Vox's Sara Morrison, so this may be yet another example of artificial intelligence (A.I.) altering the digital landscape—and/or companies preparing for the inevitable, and/or companies using A.I. as cover to make decisions they already wanted to pursue.
"The protestors are correct that Reddit is killing businesses that were built on its platform, and Reddit is also correct that these businesses were weakening its ability to monetize, which could eventually threaten the product itself," writes Byrne Hobart at The Diff.
Another factor at play here is the fact that venture capital funding—which Reddit long benefited from—has dried up. Reddit, like many other platforms, is concerned now more than ever with profitability. But it may have a very tough road ahead of it given the unconventional, decentralized model at its core. "The big downside to having a consumer brand is that the product ends up being one that everyone has an opinion on; the downside to outsourcing important work to unpaid moderators is that they have opinions about what direction the site goes in and what decisions the business behind it makes," notes Hobart.
For now, the standoff shows no signs of letting up, but inventive Redditors have found a new way to protest: Moderators are marking their (nonpornographic) subreddits "NSFW," or "not safe for work," to disallow ads and cut off revenue in an effort to get the company to listen to their demands.
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