“Reddit isn’t profitable, and the infrastructure to support third-party apps costs Reddit $10 million per year.”
Third-party apps cost Reddit $10 million a year. The new API pricing would have charged Apollo alone about $20 million a year, so the price was never about cost recovery. More than 8,000 subreddits went dark at the peak, and Reddit waited them out, then threatened to remove the unpaid moderators who run the site. Huffman called those volunteers “landed gentry” while the company lined up its IPO.