Thousands Of Reddit Communities Go Private To Protest Platform's New Price Policy For Apps

Moderators of hundreds of Reddit forums, popularly known as subreddits, locked out their users to broadcast their protest against the social media giant's plan to charge hefty fees from third-party apps that rely on the site.

Hundreds of subreddits participated in the protests Monday by switching to "private" mode to prevent users from freely joining the blocked communities. It limited Reddit's ability to feature their posts on the platform. Many users have argued the new pricing policy will chase away several popular third-party apps on which they rely for browsing and commenting on the site, CNBC reported.

This comes at a time when the San Francisco company has been struggling to make consistent profits despite being one of the most visited websites. An estimated 57 million people visit the platform on a daily basis. With the new pricing policy announced in April, Reddit is seeking to raise revenue and reduce costs ahead of its planned initial public offering of stock.

In April, Reddit announced changes to its API's pricing, which is set to take effect on July 1. Under the new guidelines, it will cost $0.24 for every 1,000 API calls (at least one call is made every time new data is sought). Those apps that make less than 100 calls per minute will be able to use the API for free, while the $0.24 pricing can add to the financial woes of larger apps.

Many subreddits launched their protest early by going dark over the weekend. On Monday, moderators said the content strike could go for at least 48 hours and even longer for some subreddits.

Christian Selig, the developer of the popular third-party app Apollo, estimated he would be required to pay $20 million to Reddit in a single year in order to keep operating on the platform.

"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," he said in a recent Reddit post, according to NBC News.

He now plans to shut down the app by June 30. At least three other Reddit apps, including Sync, ReddPlanet and RIF fun for Reddit, also announced similar plans to shut down their business by the end of the month due to "unreasonable costs," The Verge reported.

Many users also threatened to quit the platform over the pricing issue.

"I've got nearly 12 years on this account with regular engagement through all that time. Once Apollo is gone I'm done," one user posted last week. "Our experience means nothing to the people running this place."

Reddit is introducing another change to remove the app's access to certain posts, which are "not safe for work."

During an Ask Me Anything thread Friday, Reddit CEO Steve Huffman said the platform had to rein in costs, including the thousands of dollars it is spending every year to support third-party apps.

"We'll continue to be profit-driven until profits arrive. Unlike some of the 3P apps, we are not profitable," he said. "Reddit needs to be a self-sustaining business, and to do that, we can no longer subsidize commercial entities that require large-scale data use."

Meanwhile, Tim Rathschmidt, a Reddit spokesman, said the company has been talking with many communities to "clarify any confusion around our Data A.P.I. Terms, platform-wide policies, community support resources, and timing for new moderator tools."

"Expansive access to data has impact and costs involved. We spend multi-millions of dollars on hosting fees and Reddit needs to be fairly paid to continue supporting high-usage third-party apps. Our pricing is based on usage levels that we measure to be comparable to our own costs," Rathschmidt said in a statement last week.

Earlier this week, the community discussion platform announced it will lay off about 5% of its workforce and limit its hiring for the year amid a stalled IPO.

Reddit is majority-owned by Advance Publications, the parent company of Condé Nast and leading shareholder in Warner Bros. Discovery and Charter Communications.