There seems to be a general problem with social media as a profitable business models as there don't seem to be any real path for companies to monetize their user base that don't end up causing damage.
Given that Discord and Reddit have an overlapping user base it could be realization that that's not an user base that's either no especially desirable for advertisers or one simply hard to monetize for other reasons.
18-35 year old men is a demographic that is extremely valuable to advertisers. Unfortunately, it also seems to be quite a slippery bunch who shy away from most forms of advertising. They definitely love Steam sales though!
But it's only really an subset of that demographic and i suspect the age spread reaches far lower then 18(reddit might pretend otherwise for regulatory purposes).
And i suspect a reason for the entire debacle is that a lot of the user base weren't seeing ads at all due to ad-blockers or the use of 3rd party apps.
It's a problem that also seems to plague twitch in that they simply aren't generating the revenue that's expected from the amount of traffic generated.
> And i suspect a reason for the entire debacle is that a lot of the user base weren't seeing ads at all due to ad-blockers or the use of 3rd party apps.
Neither of which would be a problem for them if they didn’t remake and destroy the default UX on their desktop and made a functional app.
By pushing users to third party solutions they also pushed them off of the ads. Because if you want a web extension to redirect to “old.reddit.com”, why not throw an adblocker on top?
Everything plays into attention economics and thinking otherwise is naive. Video games are optimized for play time and content, video streaming services try to keep you watching for as long as possible, music streaming services want you listening all day.
> 18-35 year old men is a demographic that is extremely valuable to advertisers. Unfortunately, it also seems to be quite a slippery bunch who shy away from most forms of advertising.
Plus with marriage on the decline, they are more free to spend their own money.
> They definitely love Steam sales though!
Steam does not dictate what socio-political views should be.
They literally could’ve said you’re required to pay for the premium subscription if you want to use third party apps and things would’ve gone over so much more smoothly.
Now they’re facing competition in the fediverse, with apps that remove a lot of the barriers to entry (two iOS apps are currently in test flight and both look VERY promising)
If that was that easy why did the 3rd party apps shutdown rather then raise prices to cover the API fees?
Reddit's model was kind of novel in that they did it in directly by expecting the 3rd party apps to collect the payment from their users but they did essentially just ask people to pay for 3rd party app access.
I cant recall any instance where a social media company successfully extracted actual cash directly from their users that ended well.
if you look at what reddit was asking it kind of evened out to less then $5,- a month pr user which seems to have been so much more then what the 3rd party apps was able/willing to charge that they had to fold.
If you go look at their explanations, the 3rd party apps shut down because there was no transition plan for them to increase the price of only future payments (so, they would need to have billed people more months ago), and the prices were too high for the authors to absorb the loss.
So the authors did the only thing they could, that is returning all of recently billed money and closing their apps down.
The real issue with subscriptions is that it makes it hard/impossible to demonstrate revenue growth from a static userbase.
It's fine for steady state / going concern financing.
But no public or pre-IPO company wants to look like that.
Advertising and engineered products allow you to create new revenue streams from your existing userbase, and because your customer isn't your users (B2B) price increases can be invisible.
That would have been relatively easy to spin if it happened right before IPO though “Look at the last quarter(s) growth in premium subscription fees and MRR!”
Yes, paying premium to use 3PA would have gone over more smoothly yet if you consider how touchy and prone to aggressive posturing a large number of their mostly male userbase is the vocal minority would still have made significant noise about how unfair it is to 'pay-to-play'.
Any sort of significant change to Reddit by any CEO, whether it be Huffman or Santa Claus, was going to illicit a significant toxic response.
What has put me off Reddit more than anything is the level of uncalled vitriol and mean spirited comments by not only the users but the temper tantrums and petulant behaviour by a number of the mods. And when push came to shove most of these mods crumbled like my grandmother's hip after her fall down the stairs.
An intelligent leader would have found a solution that aligned incentives between the company and its users/customers and communicated it in a way that most rational users/customers would accept. I'm a sample size of one, but the freedom to choose my client and maybe some smaller perks would have converted me from a long time free user to a premium user assuming the price was reasonable. Instead it converted me from a free user to a non-user.
Sure, but unlike the current situation it wouldn’t have mattered. Pay for third party apps with free access to them for mods and none of this ever happens. You don’t have widespread blackouts because a handful of people whine about a change like that.
Thinking that Reddit is seeing any viable threat from the "fediverse" is laughable. I think mastadon.social is seeming like a nice place, though I'm worried it's a left wing echo chamber, but do we have any evidence the vast majority of the userbase has left reddit? These are the same millions of people that just scroll r/pics all day, they really won't care if all the """valuable""" content everyone claims is only made by the power users disappears and all that's left is GallowBoob reposting their stash every year interspersed with overt ads and "native" advertising.
I feel like Somethingawful figured it out 25 years ago. You can read a slightly censored version of the site for free, but if you want to post and read the swear words, it'll be $10. If you mouth off too bad and get banned, that's another $10. I guess it doesn't scale to world-eating business size, but I gladly sent them $10.
I'd say Lowtax was more of a hindrance than their business model; especially in retrospect. I always thought the edgy dirtbag thing was a bit of a put-on (which I enjoyed), but I was quite wrong on that, and it's a mistake I've learned not to make again.
Given that Discord and Reddit have an overlapping user base it could be realization that that's not an user base that's either no especially desirable for advertisers or one simply hard to monetize for other reasons.