Well simple logic would say that if they get $.12 per user/month, the costs to serve each user (in terms of compute) is probably below $.12 or else they would be losing money, no?
MAU as a figure cannot be a dollar amount, but instead only an integer no?
Silly.
Maybe you’re thinking of ARPU?
Even if the ARPU was an order of magnitude higher, it would still be half as much as Reddit is charging per user to 3PAs.
It’s not about compute cost, because compute cost is almost definitely below revenue and the fees being charged don’t seem to have any direct link to it anyway.
Compute cost per user must generally be below ARPU, right? So even if a 3PA user cost 5x in terms of compute, at most that would be $.75 if they’re making no profit. Significantly less than the $2.50 3PAs are being charged per user per month.
tldr: reddit is charging significantly more for API access than is reasonable to expect it costs them even in lost revenue, let alone raw compute
doubt. the backend was open sourced to dispel this rumor.
> salaries
Salaries are a fixed cost, so not super relevant to API costs given what we already know. ARPU is ARPU.
The amortized cost of a user to reddit is below or around ARPU (including R&D), unless they’re making the decision to still leave profit on the table in exchange for growth. However, given recent moves I doubt that.
> doubt. the backend was open sourced to dispel this rumor.
how its even relevant? Now that backend with unproven track record and unknown quality needs to handle petabytes of reddit data under significant load and with low latency.
you can just do the math I proposed to do above: mau visits site few times a month, apollo users generate 250 reqs every day, how we can come to just 5x difference here?
> Salaries are a fixed cost
its fixed but significant and adds to final number.
> sure, you can incorporate your view on difference into you calculations of how you could arrive to 5x estimation.
??
Regardless, Reddit wouldn’t prioritize a singular monthly active user (MAU) mentioned in this context. It’s more valuable for Reddit to have users who consistently visit, whether through Apollo or the official Reddit app. As long as advertising is effective and API pricing is appropriate, Reddit can generate profit.
From this perspective, what matters is the ratio of calls per view between different clients, not the type of user. It’s absurd to compare an inactive user on the official app with an active user on a third-party app. The issue at hand is unrelated to the cost of serving views or the potential revenue loss associated with those views.
In my opinion, the motivation behind these actions is 70% in response to low-effort low-value moderators (LLMs) and 30% due to the convenient timing to remove third-party apps (3PAs).
> So even if a 3PA user cost 5x in terms of compute ...
> I asked you several times to show your math how you came to 5x. Please show if you really interested in meaningful discussion.
Consider this: The Apollo app could generate significantly more requests (5x, 10x, 20x, ... ?) to serve the exact same content and still not justify the new pricing it is being charged. In other words, the app would have to be incredibly inefficient, which doesn't align with Occam's razor. It seems more plausible that Reddit has made allegations that are only loosely based on fact, rather than Apollo being so inefficient despite its high-quality reputation.
There is no specific mathematical calculation to present. I did not conduct benchmarks for you, if that's what you expected.
Your argument revolves around comparing an active 3PA user with an inactive Reddit user, which is fundamentally flawed and easily refutable. I focused on that aspect because it is not a valid comparison.
> The Apollo app could generate significantly more requests (5x, 10x, 20x, ... ?) to serve the exact same content and still not justify the new pricing it is being charged.
my hypothesis is that apollo users generate more requests because they are some power users like mods, or more engaged and active users compared to reddit MAU, so they bothered researching and installing 3p app.
> Your argument revolves around comparing an active 3PA user with an inactive Reddit user, which is fundamentally flawed and easily refutable.
no, it is people who brought that $0.15 per MAU number do such comparison.
I would compare daily active users, which are about 12x times less for reddit, and you would come to number close to $2/user.
> my hypothesis is that apollo users generate more requests because they are some power users like mods, or more engaged and active users compared to reddit MAU, so they bothered researching and installing 3p app.
Yes. It’s still silly to compare power users and non power users though in this context as I’ve pointed out.
I’m very confused about what you are attempting to say in the latter half of your reply.
However, to sum up, I wanted to reference this post from the apollo dev that came out today [0]. People who come to this thread in the future might benefit from the more detailed breakdowns and explanations with references provided there.
compute isn't free man. it probably costs millions of dollars a year just to pay the cloud providers to support those apps. i doubt that's a lie...