"Paywalls" and more advertising: Reddit wants to become profitable

Debora Pape

8.8.2024

Translation: machine translated

Reddit is also popular because there is refreshingly little advertising on the platform. This could soon change and, according to the executive board, there could also be more offers for paying users.

Reddit has been working for a long time to achieve this goal and also used means that caused furious discussions and ultimately the shutdown of third-party apps last year. My colleague Florian wrote an article on the API price increase that got Reddit into the shitstorm.

More advertising content is now being discussed. But the introduction of VIP areas for paying users has not been ruled out either. There is certainly no shortage of "Redditors", as the quarterly figures show. 91 million users are active on Reddit every day. That's an increase of 51 per cent compared to the same period last year. So there is great potential here.

"Paywalls" for certain subreddits

This concept seems to be working well and Huffman therefore sees the opportunity to further expand paid areas. He says: "I think the existing altruistic, free version of Reddit will continue to exist, grow and thrive as it has done so far. But now we're going to open the door to new use cases, new types of subreddits that can have exclusive content or private areas [...]."

So you probably don't have to worry about your current favourite subreddits no longer being accessible for free for now. Huffman's statement rather suggests that certain new subreddits could be made accessible to premium subscribers. In this case, it's less about classic paywalls and more about VIP areas for paying subscribers. However, Huffman also emphasises that there are no clear concepts yet.

More advertising, more profit

On the other hand, more advertising should generate more money. Jen Wong, Managing Director of Operations, emphasises that Reddit runs comparatively few adverts. According to Wong, the aim is not to overload the site with advertising, but to identify the areas where the advertising is actually seen.

Technically, it is possible to understand where users spend a lot of time on the site. According to the study, users spend 50 per cent of their time in the discussion area, where there is hardly any advertising. Conversations can go on for pages without users seeing an advert. This could change in the future: According to Wong, Reddit is already experimenting with adverts in the comments section.

At the same time, Reddit has exclusive agreements with Google and OpenAI, among others. These companies are authorised to use Reddit content themselves and display it in Google search results, for example. In return, Reddit receives money from Google. Search engines without this agreement are excluded.

Debora Pape

Editor

Debora.Pape@galaxus.de

Feels just as comfortable in front of a gaming PC as she does in a hammock in the garden. Likes the Roman Empire, container ships and science fiction books. Focuses mostly on unearthing news stories about IT and smart products.

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