App Foundrs Have Made Millions on the Company's API
Reddit CEO Steve Huffman told The Verge that popular third-party app developers have made millions.
He doubled down on the API changes that the platform is enforcing next month.
"These aren't like side projects or charities. They've made millions," Huffman said.
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The clock is ticking toward July 1, the date that Reddit plans on implementing a change to the pricing policy of its application programming interface.
In an interview with The Verge, Steve Huffman, Reddit's CEO, has doubled down on the policy change, which could cost popular third-party apps millions. These third-party apps give users access to the platform's content and communities, and are maintained by independent developers, who can customize the UI experience.
Huffman claimed to The Verge that the developers behind these third-party apps, like Apollo's Christian Selig, have made "millions" by accessing Reddit's API for free.
In a Reddit post addressing the site's 48-hour blackout, which was planned by Reddit users to protest API pricing changes, Huffman said that the company "needs to be a self-sustaining business, and to do that, we can no longer subsidize commercial entities that require large-scale data use."
Huffman told The Verge that it costs Reddit "about $10 million in pure infrastructure costs" to support third-party apps by keeping its API free.
Additionally, he emphasized that apps like Apollo and RIF, another popular third-party app that gives users access to Reddit, aren't "side projects or charities." No other tech company allows "these sort of competitive products to exist," he told The Verge.
Apollo's Selig did not immediately respond to Insider's request for comment regarding the "millions" Huffman claims he has made. But when reached The Verge reached out to him for comment, he did not deny the claim.
Selig has said that Apollo has around 50,000 yearly subscribers that pay around $10 per year.
"Regarding the 'millions,' word the CEO publicly threw out, I will say RIF earns under a million per year, " Andrew Shu, RIF's developer, told Insider over email.
"I wish it earned more! But instead, I have frequently rejected intrusive revenue generation methods, like intrusive video ads etc., in favor of a lightweight and user-respecting app experience," he added.
In a post on Reddit, Selig said the API changes would cost up to $20 million annually.
He told Ars Technica that he was "deeply disappointed" by the new pricing structure, adding that it wasn't "based in reality or remotely reasonable." In lieu of offsetting the new costs onto subscribers, the Apollo developer said that the app would shut down on June 30.
RIF will follow suit and plans on shutting down on the same date.
Source: Business Insider
