I'm sure they've gone over the numbers and determined the only way to generate enough ad revenue would be to seriously annoy the users, all of whom are familiar with Adblock anyway. And why go down that road if they don't have to, there's nothing wrong with asking for contributions in order to put out a product they're proud of. Advertising in print has always been a supplemental thing, the real money came from subscriptions.
And why go down that road if they don't have to, there's
nothing wrong with asking for contributions in order to
put out a product they're proud of
They've explained it as they're losing money and they will continue losing money unless a substantial number of people sign up to reddit gold. Asking for contributions is an absolutely wonderful idea (they've been doing it for over 2 years and I signed up the first day it was available -- the company I work for also has a similar system to reddit gold for our websites) however I do not agree with sacrificing actual user experience in the name of "freedom".
As I said in my comment I would love to see a comment from someone involved with reddit previously or presently on whether or not the fear of user outrage is a driving force behind this refusal to invest in proper advertising, because it seems to be that way.
From the way the blog post reads I don't think the issue is that they can't make money with adverts, it states:
we can start running a bunch more ads
That seems to imply that adverts are a way for them to make the money they need, it's just one they want to avoid. Maybe they're sugar coating it because saying "if you don't pay up the site is dead" may come with PR problems, but that seems unlikely. My experience with internet advertising is not extensive, it's possible you're right but I think figures would be needed to understand that.
I think that if they want to really commit to the idea that reddit gold can support the site they need to have targets (A counter of the # of people that need to sign up this month), something that people can understand and associate with. If there's 50,000 people needed every month to be paying and it's at 40,000 people will be compelled to sign up to feel like they're contributing.
Looking at what reddit does, I seriously doubt this. They're not a "publication". They don't have to pay writers/journalists to create content, the content comes free. There are many ad-based sites that don't have that luxury. Event moderators come from the community, they're only significant costs is infrastructure and payroll. I use to work for a company that has a fraction of the uniques reddit gets (still in the millions a month though) and that 1) does a lot more then reddit as a product and 2) has significant other costs outside of salary and infrastructure and was still not in the red. Also, this wasn't shitty advertising, the ads were well monitored and we broke ties with networks/advertisers that we found continuously had crappy ads.
There's also no control over the content. As an advertiser, I would be worried with where my ads may end up. With a traditional publication, I generally know the type of content that will come out and their policies.
For your publication, the writers will keep writing as their job, but if you upset the content generators at reddit, you'll lose your content source.
In general, monetization of a publication is a more proven model than monetization of user generated content.