Reddit's API pricing results in shocking $20 million-a-year bill for Apollo

Reddit's API pricing results in shocking $20 million-a-year bill for Apollo
May 2023

Reddit is an enormously popular website, but the official design has always needed some reworking. This is even more true of the mobile experience, which didn't have a mobile app until 2016, and even then, not everyone's a fan of it. The site's popularity rose partly thanks to third-party developers filling in the gaps with pre-existing and better mobile apps. Last month, following in the footsteps of Twitter, Reddit suddenly announced it wanted to charge apps for API access, but how much? Would it pull a Twitter and price everything out of the market?

The most popular Reddit app is the iOS app Apollo, which has been running for eight years now and has millions of downloads. Apollo's developer, Christian Selig, has been in meetings with Reddit regarding the cost of the API, and it sounds like the company is using a recent Twitter tactic. Selig says "50 million requests costs $12,000, a figure far more than I ever could have imagined." Twitter, for the record, is charging $42,000 for 50 million tweets. Selig cites the photo site Imgur as a more reasonable pricing scheme, "I pay Imgur (a site similar to Reddit in user base and media) $166 for the same 50 million API calls." Selig estimates it would cost $20 million a year to keep Apollo running.

Apollo and most other third-party apps use Reddit's data but don't show Reddit's ads, so the proliferation of third-party apps costs Reddit money. It's reasonable to expect some money to change hands here, but how much? Selig links to a CNBC report from 2019 that estimated Reddit earns 30 cents a year per user and says Reddit's API pricing would work out to about $2.50 per user per month or $30 a year, which aligns with Imgur's pricing.

Selig says he is "deeply disappointed in this price" and that "I don't see how this pricing is anything based in reality or remotely reasonable. I hope it goes without saying that I don't have that kind of money or would even know how to charge it to a credit card." This is apparently the pricing everyone is getting, so just like Twitter, Reddit may torpedo its entire third-party app ecosystem. Selig isn't throwing in the towel on Apollo quite yet, though, "This is going to require some thinking," he said.

Advance Publications, which owns Ars Technica parent Conde Nast, is the largest shareholder in Reddit.