this post was submitted on 22 Jun 2023
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What this is really about and people are just starting to realize is: the interests of the shareholders and CEO who want to get rich is not compatible with volunteer content and a volunteer modded site. People aren't eager to do unpaid work just so the CEO can get rich. This API stuff is just exposing it.
The weird thing is that they ARE compatible. They could have charged slightly more per user than they make on the official app and everything would have been fine. This move reduced shareholder value and user value.
Reddit makes $350m a year in advertising revenue, it is in theory a fantastically successful business that could make plenty of profit for its shareholders.
The problem is solely down to them raising more and more capital the latest at a $10B valuation. Because of this they need to increase the revenue even further to try and justify the inflated valuation and that is what has led to the latest situation.
I am sure they could use less drastic ways to rise revenue, clearly without spreading lies about Apollo creator and alienating moderators. There is a right way and a wrong way to do things. And than there is very wrong, Reddit way to do things.
What really told me that reddit was squandering its revenue sources was when they shuttered redditgifts two years ago. Maybe there were issues behind the scenes, but they had commissions from the storefront and from elves, and something reddit has never been particularly good at: Good publicity. And instead of figuring out how to make it profitable, they just killed it.
They didn't even bother to answer questions why.
It was at that moment I knew the current leadership was rudderless, and now everyone's finally come around to it.
A slight profit is compatible, I think we all get that you can't run at a loss. But it's no longer "look at this neat thing we can do with everyone". They're not building goodwill with the unpaid creators and mods. Everything they've said and done is oozing with "Get back to work you unpaid peasant! We need to IPO and get rich!" They've shown nothing but disdain towards users, mods, and developers.
Why not slightly less? That would make more sense to me.
A user on a third party app isn't as valuable to the company. They miss out of all the valuable spying and tracking they can do by installing their own software on your phone. Plus just the presence of this party apps means you can't demands extra permissions on your own app and tell users to deal or suck it (in nice PR speak). So it makes sense to charge TP apps more for reducing the "value" of a given user.
Charging less is basically subsidizing third party apps out of your own pocket - which was exactly the complaint in the first place. Although it would've been better to gradually ramp up prices to less-subsidized and eventually to a profitable partnership.
The counter-argument is that the users that gravitate towards those apps are less valuable anyways (we were the first to jump ship for e.g.) so a discounted rate just to keep them around and contributing/adding value for the "whales" on the official app.
The other thing is that they've just handled things so incredibly badly. Limited communication largely directed at third-party media sites, erratic rules changes and enforcement, doubling down with heavy-handed admin actions.
I think that even beyond a need for profit they lost sight of why they have substantial value in the first place. The majority of their value came from their community which made "the front page of the internet" a pretty honest claim. Their software isn't worth billions, but the front page of the internet sure is. They should have had a substantial community engagement department specifically to kiss ass and build relationships with mods (and users via AMAs) so that open lines of communication existed - and they probably should have taken control over key things like inserting an employee as top mod of the top 50 subs (make it standard practice for hitting top 50, offer cool extra services like a visit to HQ and such for the mods so its like they "win" rather than "reddit seizes control" even if that's what it is).
Instead they stayed way too hands-off and basically treated their community as an afterthought. The poor communication made me feel disrespected as a user, so I can only imagine what its like for the mods who put far more time and effort in and are in the direct line of fire of erratic admin actions. I mean, this isn't even hard. Just make a vague corporate statement that you're "very sorry" about all the "confusion" and you'll be "putting changes on hold an re-evaluating while you work with various parties to come up with solutions". You make some token concessions and then do 80% of what you were gonna do anyway, 1-2 months later. Its dishonest and shitty but it's not rocket science to take some of the fuel away from the fire. Like, do they even have a PR department or... did they completely forget that the community even mattered?
If Reddit has an employee on staff as a mod that can approve posts, then they lose safe harbor protections. Anything that mod approves is considered representative of Reddit, giving them editorial control and causing them to be handled more strictly. https://caselaw.findlaw.com/court/us-9th-circuit/1856011.html
Further, if Reddit gave bonuses to mods, then mods would be considered unpaid employees. Any kind of "swag" or quid pro quo for being a mod of a big subreddit increases the chances that those moderators will be considered unpaid employees by the Department of Labor. AOL famously got in big trouble for giving free/discounted internet access to their volunteer moderators. https://casetext.com/case/hallissey-v-america-online-inc-sdny-2002 (Settled in 2009 for $15 million in back pay.)
Combining the two is terrible news for Reddit and would make their business model absolutely unsustainable. Every mod would be an employee and every post would be representative of Reddit as a company. If a mod approves a link to copyrighted material, then Reddit could be sued.
Respectfully, I think you're overreading the meaning of the Mavrix Photos case. That case involved the most popular LiveJournal community, moderated by a team led by a literal employee, where the mods reviewed the submissions by users before posting, and only posted about 1/3 of the submitted content. It was a human-required process for anything to be posted at all, and it went through the moderation team that was arguably controlled by LiveJournal. And even then, the appellate court sent it back down to the trial court to figure out whether a jury would determine whether that procedure counts as content being posted at the direction of a user, rather than at the direction of the company. It also made clear that some pre-posting review would still be OK even by the company's agents/employees, such as when they manually review for pornography/spam/etc.
And after this year's Supreme Court decision in Twitter v. Taamneh, which reversed the Ninth Circuit's ruling that Twitter and similar companies could be liable for user activity on those services, it's pretty clear that having paid/employed moderators doesn't actually make services liable for what they fail to stop on their platforms. Liability will only happen when an employee actually does the thing that gives rise to liability (e.g., posting infringing material themselves).
So no, I disagree with your analysis that paying or compensating moderators gives rise to risk of liability. Especially after the most recent Supreme Court cases on Twitter and Google, which call the Mavrix reasoning into question.