What everyone missed from the Reddit saga

In the midst of the Reddit saga and its ensuing backlash, an intriguing aspect that resonates far beyond a single platform has been overlooked. Behind the protests and controversy lies a fundamental lesson that challenges the entrenched status quo of creator-platform dynamics.

So what really happened? 

Over the last few weeks, Reddit has been in the news due to a number of protests against the company's new API pricing policy. Ever since its launch, Reddit has spawned a thriving ecosystem of third-party developers who build extra tools, functionalities, and interfaces for Reddit. An API (Application Programming Interface) is a set of rules and protocols that allows different software applications to communicate and interact with each other. This means that all the content posted to Reddit would be available for developers to access via the API. The new policy, which would charge third-party developers for requesting and accessing Reddit’s data, has been met with criticism from many Redditors, who argue that it will make it more difficult for developers to continue to create useful tools for the platform.

Why did Reddit do this?

There are two main reasons why Reddit would introduce API pricing when they did: 

1. Preparation for Initial Public Offering (IPO)

Reddit's decision to charge developers for access to their API as they prepare for an initial public offering (IPO) stems from a strategic move to bolster their financial statements and enhance their revenue streams. By monetizing their API and the data from their platform, Reddit aims to tap into a potentially lucrative source of income and demonstrate a diversified revenue model to potential investors.

2. Extracting Value from LLM Training 

Since the release of ChatGPT by OpenAI, there has been a significant discussion around "large language models" (LLMs). These models, which have powered most of the recent advancements in AI, are trained using vast amounts of text data from platforms like Reddit, Twitter, Quora, and many more, enabling them to learn language patterns and contextual understanding through unsupervised learning algorithms. Reddit's diverse range of topics and discussions has greatly contributed to the training of such models.

In the past, platforms like Reddit provided their data for training AI models without receiving any compensation. However, as AI becomes more prevalent, Reddit has made the decision to monetize its valuable data, compensating the platform for the value they provide to developers who utilize their data.

Who else does this impact?

AI model developers aren’t the only ones who access Reddit’s data through their API. Reddit also supports an ecosystem of third-party developers that build Reddit-compatible apps. 

The third-party Reddit app developer ecosystem plays a crucial role in expanding the functionalities and user experience of the platform. Developers leverage Reddit's API and database to create innovative applications that enhance Reddit's features or provide new ways to interact with the platform. These applications often offer specialized browsing experiences, advanced search capabilities, real-time notifications, and customized interfaces tailored to specific user preferences.

For example, the app "Apollo for Reddit" leveraged Reddit's API to provide a comprehensive and user-friendly mobile experience, since Reddit’s proprietary mobile app had a bad reputation for performance issues when it was first rolled out. 

How did people receive the news? 

Not well. 

Reddit has been privately telling developers that pricing was coming since earlier this year, and it does seem like most developers were willing to work with Reddit. However, the specifics around the implementation timeline and pricing were only revealed recently. The cost for developers would be much higher than anticipated (after Elon Musk bought Twitter last year, they introduced a similar, exorbitantly high pricing scheme that effectively killed third-party Twitter developers) and developers would have only a few weeks to adapt. 

As a result, Reddit moderators, the people who control subreddits, banded together to “blackout” Reddit communities for 48 hours. However, that was in early June, and a third of those subreddits are still blacked out, or protesting in another way, such as spamming John Oliver memes, to this day, even though the policy went into effect on July 1. Many hardcore Reddit users interacted with at least one third-party tool in some capacity. The blackout was intended to bring the company to the negotiating table to find a solution that preserves third-party developers. As of this writing, their stance is unchanged and the policy has gone into effect. 

Got it. So what are we all missing? 

Sute is a community company. A creator economy company. A creator empowerment company. So, whenever stories like this happen, we try to decipher how they’ll affect creators and their communities or audiences. 

But this situation is unique. Reddit is one of the few social media platforms that isn’t powered by “creators.” Instead, content is organized by a specific subject and the platform is powered by moderators. The mass blackout initiated by Reddit moderators in protest of Reddit's decision to charge developers for API requests serves as a compelling demonstration of the power of community. 

Could a blackout of this scale happen on Instagram, Twitter, or TikTok? Almost certainly not. Unlike other major social media platforms, Reddit's structure actually empowers its users to create and moderate all content in subreddits, fostering a sense of ownership and collective responsibility for users within their own communities. This coordinated action showcased the unique nature of Reddit as a platform rooted in community participation and engagement. 

By empowering its users to establish and manage their own communities, Reddit distinguishes itself from other major social media platforms. By organizing its content distribution around communities, Reddit actually empowers its users more than other social media platforms. While all users benefit in some capacity, it's actually creators (or frequent Reddit posters) that benefit the most from the community structure, because the platform enables them to post freely, even if that content is against the interests of the platform.  

Owning the community relationship 

If we flip this analogy so creators are the Reddit third-party developers (instead of moderators) and their Reddit’s users are their followers, then this is a stark reminder of the importance of owning your creator-follower relationship. The developers were heavily reliant on Reddit as a platform, only to be unexpectedly disintermediated and effectively stripped of their livelihood.

When it comes to social media, it's important to understand that the connection you have with your audience isn't truly in your control. Instead, the platform itself holds ownership over that relationship. While creators can actively participate in building and nurturing relationships with their audience through content creation and engagement, they do not have complete ownership or control over these connections. Social media platforms act as intermediaries that facilitate, mediate, and profit from (or own) these interactions. The platform sets the rules, algorithms, and policies that govern how content is distributed, seen, and interacted with by the audience.

In practical terms, this implies that even if a creator invests time and effort in building a strong following and engaging with their audience, the platform can make changes that impact how content is displayed, who sees it, and how often it reaches the intended audience. Algorithmic changes, policy updates, or the introduction of new features can all affect the visibility and reach of content, potentially limiting the connection between creators and their audience. It's important for successful creators to be aware of this dynamic and adapt their strategies and approaches accordingly.

Why do so many influencer coaches emphasize the importance of email lists? It isn’t specifically email communication that’s so valuable, but it’s about owning a direct line to your audience that can’t be disintermediated by a platform. Email lists can be effectively substituted with community platforms, like Sute, Discord, or Circle, where the creator is able to own the relationship they have with their community. In an era dominated by social media platforms and algorithm-driven content distribution, creator-led communities and email lists offer a distinct advantage by allowing content creators to truly own and control the interactions with their audience. This is why I was initially drawn to the Reddit saga as a powerful allegory for creators. 

In addition to ownership over the relationship, a community offers more meaningful conversations, shared interest, a sense of belonging, and enhanced participation. Creators have found success with owned-communities because they can produce their content whenever and however they want to. When you own the relationship you have with your followers, you’re no longer beholden to an algorithm that will dictate who sees your messages. 

TikTok is a great counter-example of this distinction. Its algorithm seems to have a mind of its own; a mind that prohibits certain words (apparently you can’t even say link-in-bio on TikTok?) and is known to suppress critiques of its platform. TikTok creators are constantly forced to adapt to the platform's algorithm, which often limits their ability to fully express themselves in their videos. As the platform's algorithmic preferences favor certain content types and trends, creators may feel pressured to conform, overshadowing the authentic messages that creators wish to convey. Can you imagine trying to organize a blackout of TikTok, on TikTok? Even a campaign started by Charli D’Amelio would crumble at the hands of the TikTok algorithm. Reddit was only able to accomplish this because of the community-based nature of content distribution on Reddit, instead of an algorithm. 

The Reddit saga actually demonstrates what happens in both cases–with an owned audience relationship and a platform-dependent audience relationship. Third-party developers find themselves in a challenging predicament, left with limited avenues for recourse. Their lifeblood reliance on the platform became their vulnerability and they found themselves subject to decisions that permanently halted their endeavors. Conversely, moderators find themselves in a position of strength, supported by the authority derived from their community ownership. They showcased their capacity to rally together, wield their influence, and truly own the relationship they have with their community.

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If you’re a creator who’s interested in owning the relationship you have with your community, apply to join Sute and become a Founding Creator for our beta launch. 

We’re currently taking applications from the best creators in entrepreneurship, career development, and personal finance, so apply now to secure your spot!

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