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this post was submitted on 08 Jun 2023
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How much were these apps making in revenue? Curious how bad the gap is with the API pricing.
If I read it correctly Christian(Apollo Dev) made ~$500.000 for this year by having 50.000 people get the $10 subscription. The problem is that now, since on the 6th month of the year he is forced to shut it down, he has to refund these people for the rest of the money(so ~$250.000).
From what I understand though, the problem is that Reddit doesn't want to lose revenue from 3rd party apps avoiding adds, so in this section, from Christian's own recording(which is legal in Canada) he mentions that Apollo is costing $20m/year and that's what Reddit is after.
Yep and Christian made a somewhat reasonable proposal: If Reddit truly believes Apollo users are costing Reddit $20M in activity a year, it can have my app for $10M which would only be a 6 months worth of liability.
Yeah. What an horrific threat that was, right?
/s
Fucking reddit and /u/spez, specifically, being spineless.
it was hte wurst /s
If it was truly about Reddit not wanting to lose money from not serving ads on third party apps, they would serve ads via the API.
I'd love to link it, but there's so much content around this that I'll never be able to find it.
I'm sure it was mentioned by some app developers that they were asking for access to the ad API that Reddit uses in order to serve their ads in the 3rd party apps so they don't have to shutdown.
Also, asking after the proper GraphQL API access (instead of the older and less featured/efficient REST API) now that it's becoming paid access... And I'm sure that the answer was "it's not ready".
At least, I understood it in some other way.
With some "back of the envelope" calculations (using Reddit provided revenue and user number) Reddit's revenue (not earnings) / user month is $0.12 , around $1.4 user/year
In the case of Apollo, the "intended" revenue per Apollo user would be $2.5 per user month, around $30 user /year
From the body of the post, search for the following header: Why do you say Reddit's pricing is "too high"? By what metric?
The $20 Million is what would cost to continue using the API with the intended price point.
Also, $500.000 year would be revenue, not earnings. As I understood, he's not a "solo" developer working in his basement. There's people and infraestructure to pay from that number (I don't know neither how many people nor how much costs "keeping the lights on", but anyway, I don't think those numbers are relevant)
My own opinion: Let's say Reddit's break even point is around the Apollo's intended cost / user. That would mean that with a revenue of $0.12 per month * user, Reddit would be losing around $800 million / month. That's close to $10.000 million / year. Even as a ballpark figure, I find it suspicious to say the least.
BTW: I've never used Apollo. RIF user from long long before they had to change the App name
Wouldn’t Apple have taken 30% of that though?
I believe that is correct; i.e., the $500k is gross, not net. It doesn't account for his other expenses, either.
So even if his other costs were half what Apple takes, it’s about 1/10 of what the api would cost him. Dang.