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Reddit’s revenue per user is much lower than that of other social networks (cnbc.com)
45 points by kiyanwang 36 days ago | hide | past | web | favorite | 66 comments



That’s a good thing folks.

Talking about the user being the product, I’d try to choose a platform where my value is minimal since I think it’s fair to assume that there’s less data collection and profiling going on.


One good thing I commend reddit for is their business model centered around the user-funded 'gold system' (now called reddit premium [0]).

Kind of like a win-win: You see a great post or a comment by a random user, you buy gold (or awards/coins as it's now called), reddit gets the money, post or comment's author gets the recognition in that thread via a special badge (aside from a host of other experience-enhancing benefits) -- everyone's happy.

I'm aware of the fact that they run ads, but one can choose to evade all of it by going premium -- pretty neat, imo; Imagine Facebook or Twitter giving users this choice!

[0] https://www.newsweek.com/reddit-gold-silver-platinum-premium...


Their ad platform also, as far as I'm aware, only spans their own website. Admittedly, given the ungodly amounts of time I'm spending there, that's still a significant amount of profile-building they'll be able to do, but it's still far less invasive tracking than e.g. Facebook's.


The new "reddit premium" feature is a downgrade, though. The original "gold" model is a lot smoother - there is a single token of reward, the gold coin. If you want to increase your visible appreciation for the post/comment, just pay more and award them more gold. Yes, the new "premium" model is more palatable to investors, but it's still very clearly giving up a nice, win-win innovation.


I'd love to see something similar for Twitter. Perhaps with better moderation support as one of the perks.

"Gold" systems that actually pay the content creator, patreon-style, are an interesting idea too. But they have considerable potential downsides.


Content is constantly being reposted on Reddit with zero attribution. You're better off trying to create a new community with these types of pay-the-creator systems built into it, than shoehorning it into Reddit where the incentive systems would be completely warped due to the Wild West nature of 'content ownership'.


That seems like a pretty dubious assumption. Who’s to say they aren’t more desperate for cash due to that? Reddit makes it painful to browse their site on mobile exactly because they want you to use the app so they can track you.


I think they’re doing pretty well:

https://www.reuters.com/article/us-reddit-funding/reddit-val...

Now that doesn’t mean they’ve found a good long term model yet. But if I had to choose between Reddit’s and Facebook’s app (not that the comparison would make a lot of sense) then I’d choose Reddit on all days of the week.


Reddit has also been supportive of 3rd party apps and those are some of the best apps of Android overall... Let alone for Reddit.


Valuation has little to do with income; and in fact it means they have to live up to that valuation by getting more revenue and answer to more outside investors. I’m not sure how you thought this was a counterpoint?


I was talking about the funding, not the valuation.

They are presumably looking for a way to sustain themselves, but I still don’t believe they’re “desperate for cash”


Yeah I wonder if free models may make a platform more open to propaganda.


Wot?

It means there's _more_ data collection and profiling since you can't otherwise make profit.


The problem with reddit is that I assume their team is so useless they simply can't extract value from the users. As soon as they start hiring competent people, things will change.


My first inclination is to think this is a good thing. That it's a sign of a better customer experience. It's the cynic in me that worries this will be seen by some as an opportunity to increase RPU and screw up the site. (And the new UI supports that cynical take, at least somewhat.)

I 'grew up' in the era of USENET, which had a couple benefits over the forums and then social media sites that sprang up to replace it. It wasn't perfect, but it did offer more individual control over user experience and less dependency on a single corporate entity. It would be nice to find a way to get back to some of that.


The new layout is annoyingly modern but I do like the ability to read an article and go back to the list without reloading the page.

Now if res can just be updated for the new site to further fix all the little niceties. The fast use switching inevitably drives me back to old mode soon enough.

In the mean time create a bunch of accounts to help their valuation right? I've got a dozen accounts and forgotten the password to at least as many.


Obviously. They practically promote throwaway accounts and don't require any real personally identifiable information through their registration process. Their users aren't nearly as attached to their account as, say, an Instagram user or Facebook user with a vested interest in keeping their account closely tied to their identity.

On the contrary, Reddit users typically don't want their Reddit activities tied to their identity at all. As such, Reddit accounts probably don't get used nearly as frequently thus aren't as lucrative from a data harvesting standpoint.

Although there's a special place in hell for a website with 17 cookies.


That makes me like Reddit more. I wish more social media would allow me to pay to access a version of the service that wasn't centred around advertising. Even with adverts Reddit doesn't feel like it's manipulating everything you see just to sell access to your eyeballs.

Reddit has an ad-free premium subscription, although at $5.99 a month it's obviously a lot more than the $0.30 they reckon each user is actually worth.


Selling ad-free premium subscription is not a good idea if you rely on ads. As those willing to pay, is exactly those an advertiser want to target.


>As those willing to pay, is exactly those an advertiser want to target.

How does this follow? A user is not just on a scale from "I don't pay for anything" to "I pay for everything." People pay to solve what they perceive as problems. For some people, that problem is online advertising (but they don't use adblock because for instance they think it's unfair to the platforms they use). For others, it might be that they're looking to buy their kid a new toy. People could easily be in both groups, but they're unrelated so let's keep them separate for this example.

An advertiser representing Toys-R-Us for instance would love to advertise to that second group. The first group? Not necessarily.


^ What indigochill said.

In addition, for Reddit it seems a paying subscriber is worth 20 non-paying subscribers and is a more secure form of income. So I imagine they're exactly the type of user they want. Why would the subscription model exist if it hurt advertising revenue?


My guess although I don't agree with it is that some marketers think "people willing to pay to not deal with ads" are a more valuable demographic to advertise to. Which is cosmically missing the point really.


Does Reddit offer a version of their site that filters out non-paying users? This would be my ideal experience.


Reddit has some valuable users, but its poorly monetized. For example, I dont trust political support reddits... after 2016 they all feel gamed. I think a paid sub, a sub that has a monthly subscription which added an extra level of scrutiny to the users and posts might be interesting.

Alternatively, a revenue sharing model where I pay for a subscription to a sub, and I can read normally paygated links.


I participate in a forum with paid subscriptions and heavy moderation. The politics threads still feel gamed occasionally.


Well that feel is because certain ones are.

They are managed by PACs. With nice little email lists providing members which stories to vote up/down and even to the point of who to report. More than a few are moderated by PAC assigned people because it isn't hard to work yourself into that position.

there are many good forums on reddit but those tend to be ones where advice on how to/what is types or those openly declared as non political; hence avoid the science reddit.

the long term threat is, does reddit bow to the wishes of investors. there are many many reddits which are guaranteed to offend people of any belief. while some of the openly bigot oriented reddits got shut down others merely skirt the rules. the fetish reddits are likely next on the list for policing.

overall it is an interesting place to be but treat it as any other public forum, always, and I mean always, assume your alias is nothing more than alias and your identity is known


In reality, I'd expect paid forums just signal to astroturfers that their readership is worth more to influence.


I would not think that having to spend a little money is an actual deterrent for those who want to game public opinion. So I wouldn't be surprised if it still happened.


The only way it wouldn't is if the money paid for an editorial staff and then you'd be approaching a traditional media setup.


It makes sense when you consider how many "throw away" accounts are out there. You couldn't get away with creating those kind of accounts on other platforms.


I assume that they measure active users, though, which would ignore these throwaways. And Reddit's approach lets users opt in to "higher-value" features anyway - a Reddit user can opt for an experience much like any other social network (and with comparable "value" flowing to Reddit themselves) if they so choose.

The problem for Reddit is that no one sane would choose to do this at the moment, simply because the abysmal performance of the "new" site and app severely impacts usability, which alone makes them uncompetitive! (And no, this is not just a HN user's typical bias talking: try using the app or the new site designs, and you'll see what I mean. They're even more terrible than FB! And this especially bad for engagement with Reddit in countries outside the U.S., where legacy or underpowered hardware is far more common.) This is entirely a self-inflicted problem from the Reddit leadership.


Users won’t ask the stuff they do without throwaways. They’re needed for some level of anonymity, within reason.


I agree with this. But one of the irritating things about Reddit is just how much straight up lying happens simply because the poster wants a high-attention thread. r/relationships and r/sex is full of these 'that happened' absurd scenarios that well-meaning posters do still try to help with.


They're entertainment. You read with the expectation that they're mostly false, but the possibility that any one of the absurd situations is happening for real.


Can't wait for an 'aliases' 'feature' to be developed while throwaway accounts become increasingly more difficult to create.


Normal display advertising will not work on Reddit, but native ads will. Take content that already gets tons of comments (pictures of pets looking cute), add in one paid promotion item, like a dog jacket. Then get someone to innocently ask where they can buy the jacket, and reply in a link.

The meme of Reddit users is that they consider themselves to be harbingers of rational thought and logic, but they are easily influenced consumers just the same. As Amazon starts looking more like AliExpress, Reddit will become a place where Twitch/E-gaming/Cosplay personalities separate 'followers' from their money.


You're a genius. All reddit has to do is violate the FTC Act on a massive scale.


Are there any sources on the split of per-user revenue between ads, reddit premium and reddit gold?

I would've normally expected ads to be the bulk of it, but now that we have Fortnite with its strictly vanity merch... you just never know.


My view is that apps will evolve to be more user hostile, and there is no solution in the current internet landscape. Take the most snoopy internet corp, FaceBook - well above half their revenue goes to paying for infrastructure and salaries. Even if they choose not to build the technology (and hardware) that exists merely for user monitoring, a product working at that scale cannot exist without prying on user data and selling their privacy. Same situation with Google, and maybe Reddit eventually.

For a number of apps, a possible alternative is the P2P model - in which infrastructure costs are shared by participants and development is done by enthusiasts (either for free or with lifestyle-business sized incomes).


I'm not surprised to hear this.

I run a game server hosting company (primarily for Ark: Survival Evolved) and I buy lots of ads. My best sources for ads are Google and Bing, both of which have excellent conversion rates for relevant search phrases-- in other words, people who click the ads are very likely to ending up signing up for a paid plan with my company.

The reddit ads are very different. I bought ads on relevant subreddits and plenty of people clicked them, but no one ever signed up. After wasting thousands of dollars on this, I stopped advertising on reddit.


Do people who use reddit consider themselves part of a social network?


I doubt it. Some might, but I doubt that most do.

Reddit should be easy to target with ads, sub-reddit are can be highly targeted. Take /r/beekeeping, it would be easy to sell beekeeping equipment via ads on that sub-reddit, but I have yet to see a single ad.

Or how about /r/battlestations pretty easy target for PC components, desks, chairs or posters, but no. You get an ad for BMW and freelance coder jobs... WHY?

No one want to buy ad space, everything is via agencies that does not give a shit. Tracking down relevant sites or in this case sub-reddits sounds like work, so instead let's just pump everything through "The Algorithm".


Are you looking for a job as a coder and in the market for a new car, by any chance?


I consider it like a chat in the library as opposed in the local cafe. I go to the section where people know their stuff about X, and we talk about X. It is definitely a network.


Nope, it's just centralized newsgroups IMHO.


Exactly. (But just the alt hierarchy... I don't think Reddit has anything like the old voting process used to create groups in other hierarchies.)


And without all the things that made Usenet good, like client side filtering.


The revenue from Twitter and Snapchat is actually more fascinating.

I have no idea how Snapchat is making money. I know they have ads, I just don't know where, I've never seen one.


The right tab is full of ads, no?


What tabs? You have the friends list and the "send a snap" screens, those are the only two I see... and sometime my profile.


First tap down here: https://i.imgur.com/6SUbJeK.jpg

Scroll down and you will see lots of ads.


Interesting, I'm surprised that they're able to make money on that. Also Snapchat apparently thinks I'm Norwegian.


All I get is gossip, clickbait and political propaganda. Very unethical, especially for an app where the dominant demographic is early teens. :/


I thought advertising on Reddit must be really cheap then, compared to Facebook, Google et.al. But it seems I can not advertise on Reddit if I have an ad blocker ... !?


I’m all for adblockers, but why would you be allowed to advertise if you use one? Do you have some reasoning for why other people should potentially see your ad while you don’t see those of others? Does your adblocker whitelist some things? Genuinely curious.


You wont do much business if you lock out all the hypocrites.


Sidenote, there is a punctuation mark called an "interrobang": ‽

It combines both the exclamation mark and question mark. It is included in Google's Android keyboard by long-pressing the question mark.

Eg) Are you crazy‽


You don't need an email address to sign up, let alone anything else.

Personally identifiable information are more valuable than those that are not. That's not a surprise.


Not shocked honestly.

A lot of Reddit users are against the idea of being advertised to or having their data sold. In addition to this semi-anonymous and throwaway accounts are common which must lower the worth of any data collected.

I personally have 3 different accounts, One for work, one for politics and a final one for games. I'm more then happy to rotate (throw away and recreate) any of these accounts at any time.


Populations are just different among the networks. Facebook is probably closest to “all people”. Twitter skews towards urban professionals. Instagram has the artsy/fashion-conscious crowd. Pinterest attracts more traditional women.

Reddit, for its part, attracts the young, male underclass. Not exclusively, of course. I have an account myself, so don’t feel insulted.

That demographic just isn’t as valuable, unless you’re selling games or conspiracies. They have neither money nor power.


I would say that was true until 2-3 years ago, my sense is reddit has broadened out a lot recently.


I tend to agree with you. I joined Reddit back before the time they allowed sub-reddits to be created at well. My view of the site was more or less entirely /r/programming, which had a post celebrating 65,536 users. This was also around the time they switched from using Lisp to Python: https://redditblog.com/2005/12/05/on-lisp/

Then at some point, the site opened up sub-reddit creation and a vast new world popped up around 'me' that I was completely oblivious to. (And /r/programming is now at 1,700,000 users...) The site's changed a lot over the years, and not necessarily in ways that are immediately obvious. (But that lisp post is almost 15 years old, so maybe that shouldn't be a surprise.)


I think its heavily depends on the subreddit. The only one i know that collects regular user data is /r/ukpol where 90% of users are white males between 18 and 30.


call us poorly monetizable instead please


I wish the title included the word ‘commercial’.

I’m not a Redditer myself, but _some_ of the things to come out of various eclectic reddit communities have been amazingly valuable


The commercial value would seem to correlate rather well with other values. Sure, there are some subreddits that are well-moderated, and where some genuinely creative stuff happens. But when weighted by the number of users and comments, most of reddit is just the lowest common denominator of entertainment.

In contrast, Twitter can at least claim that it is the place where news increasingly happens. And whatever the reason, I find a politician’s twitter stream far better than any ama (which really are rather terrible, for the most part).

Similarly, many professional communities seem to congregate on Twitter far more than on reddit.

Facebook obviously owns the real-world-relationship angle, which puts them above the others.




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