Blackouts and Black Ink


Article from Issue 273/2023

The Reddit blackout is big in the news as I write this column.

Dear Reader,

The Reddit blackout is big in the news as I write this column. As you read it, you will probably know more than I know now, but for now, the disruption is starting to look significant, even though the company says it will all blow over in time.

A recap: Reddit, which is actually a company, although it has many features that make it seem more like a collection of community groups, announced that it would start charging for applications that access its API [1]. This news is significant because there are several companies that derive their revenue from apps that provide an interface with Reddit, and some of these vendors have declared that paying to access the Reddit API will drive them out of business. Apollo, makers of a Reddit client for Apple products, has already announced that the change will cost them $20 million per year.

Reddit has been chugging along for 17 years. Why rock the boat now? It is no secret that the company is gearing up to go public with an IPO later this year [2]. The whole scenario fits with the usual story for how these tech ventures go. Venture capitalists invest in a private company to build it up (with an emphasis on growth, rather than profit), then at some point, they go public with an IPO, and everyone makes a lot of money. But the IPO only works if Wall Street likes what it is buying, and Wall Street likes profits. So if Reddit wants to make a splash, they need to transition from a company that emphasizes growth (i.e., maximum access to the API) to a company that emphasizes profit (i.e., no access unless it brings in revenue).

Reddit is reportedly the 10th busiest website in the world, and the sixth busiest in the US, with 57 million daily users, so a boycott is big news. The company maintains that the boycott has only shut down a small percentage of its forums. Out of a total of 100,000 active subreddits, 6,000 went dark initially, with others following to a maximum of 9,000, and some coming back later in the week. As of this writing, around 3,500 are still dark. But the actual numbers might not be as important as the attention it brings to Reddit at a critical time.

It is true that some of this attention could be positive attention from investors because Reddit executives are being "tough" and demanding profits. But it is also worth remembering that Reddit is in a peculiar situation that most companies will never face. Their whole business model depends on them looking and behaving like a community. Most of the moderators on Reddit volunteer their time. According to a recent study by researchers at Northwestern University [3], volunteers save Reddit $3.4 million per year in labor costs. Of course, Reddit is a big company ($3.4 million was equivalent to 2.8% of revenue at the time of the 2019 study). But the line between red and black ink is quite tenuous in the Internet economy, and $3.4 million can make a difference. Most volunteers are happy to donate their time to a worthy cause, but a corporate titan dialing up its profits to impress Wall Street might not be a cause that many of these volunteers consider worthy.

I have some sympathy for Reddit. Are they supposed to go on forever giving free access to companies that don't contribute anything to pay for the infrastructure? And yet, if they operate on free labor and talk the talk of community spirit, should they not be held to a different standard from other profit-screaming ventures? The company says it is negotiating with several of the client companies in hopes that they will continue, although two of the largest, Apollo and Reddit is Fun (RIF), have already said they will close their doors.

Reddit CEO Steve Huffman was recently asked if he thought the real answer is that the profit model for building a massive company on Internet advertising just doesn't work. His answer was, "Are you saying Facebook doesn't work?" [4].

That's the whole point, though. Companies like Google and Facebook work very well, but not just by selling ads. They also spy on people, strong-arm their customers, and play corporate hardball when necessary to protect their interests. So yes, Reddit can be just like Google and Facebook, but when that happens, they might not look like the Reddit we all remember.

Joe Casad, Editor in Chief


  1. "Redditors Go to War with the Company as It Enforces Eye-Watering Prices for Reddit API," Forbes, June 13, 2023:
  2. "Reddit Aims for IPO in Second Half of 2023," Reuters, February 14, 2023:
  3. "Unpaid Social Media Moderators Perform Labor Worth at Least $3.4 million a Year on Reddit Alone," Northwestern Now, May 31, 2022:
  4. "Reddit CEO Steve Huffman: 'It's time we grow up and behave like an adult company,'" Morning Edition, NPR, June 15, 2023:

Buy this article as PDF

Express-Checkout as PDF
Price $2.95
(incl. VAT)

Buy Linux Magazine

Get it on Google Play

US / Canada

Get it on Google Play

UK / Australia

Related content

  • Reddit Closing Doors to Open Source

    The peanut gallery of the Internet is closing its open source repository.

  • News

    In the news: Reddit closing doors to open source, VMware brings its cloud to AWS, Gnome celebrates its 20th birthday, SQL Server comes to RHEL; OpenShift comes to Azure, and FDA recalls nearly half a million pacemakers over security concerns. 

  • Introduction

    This month in Linux Voice and Elvie.

  • Social Aid

    Fortunately, Facebook is not the only place you can chat: When sys admin columnist Charly Kühnast visits the web chat center Reddit, he often goes without a web browser and uses the RTV tool, which can even display photos and videos on plain text consoles.

  • Helping Hands

    In true open hardware spirit, Social Hardware looks to produce a development kit for prosthetic hands to help rural amputees in India.

comments powered by Disqus
Subscribe to our Linux Newsletters
Find Linux and Open Source Jobs
Subscribe to our ADMIN Newsletters

Support Our Work

Linux Magazine content is made possible with support from readers like you. Please consider contributing when you’ve found an article to be beneficial.

Learn More