this post was submitted on 08 Jun 2023
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The thing is, they have operating costs. I'm sure it's a boatload of money as well, given the size and scope of Reddit. Almost all startups run at a loss. And then continue to do so long past when they're a "startup". The money they "make" is from rounds of investors who believe they will find a way to make money in the future. Eventually investors get restless and demand that they find a way to monetize so they can recoup. Without those investors money, the site will come crashing as soon as they miss some critical payments for stuff that keep the site up. I'm absolutely sure that's what we're seeing. I think either way, its time has come.
Pinch the users to try to keep it alive for a little bit more. Don't pinch the users and it dies in a grinding halt when they miss some key payments.
So realistically, what would a sustainable business model be for something like Reddit?
Something like lemmy or a fediverse platform is going to rely on donations and community support. In the case of mastodon, for example, it’s been shown to work well enough for sustainable operations. For those willing to work on something worthwhile for lower salary, it is potentially a great gig. In a commercial context though, it’s basically a subscription based business model.
If we’re to recover from this ad driven data tracking economy, subscriptions seem like a healthy thing for businesses to adopt.
Reddit may have already signed their deals with the devil. But generally, the point of the fediverse is to escape this corporate manipulation of our basic communications in the internet, and it’s still interesting to ask what profitable but sustainable operations can look like.
I think that federation will help Lemmy a ton--there will be a lot of small, cheap servers rather than a single extremely expensive one!
Possibly. I’m not sure how true it is that the fediverse necessarily leads to more efficient computing needs per user. I’d bet it’s the opposite.
But, as you perhaps allude to, there are other factors. For those who only want niche smaller communities, they can enjoy a more stripped down experience without needing speedy and beefy servers. Similarly, the platforms here are probably slimmer and not bloated with features that are trying to engage and monetise.
The major factor, IMO, is ownership. Admins literally own their servers. And should have a much closer and codependent relationship with the users in their servers, except in the case of large instances which become different beasts. Additionally, users have much more choice and mobility on the fediverse. All of which means admins/moderators and users have more at stake in their relationship. More ownership over their platform/instance. And therefore actually have a reason to donate and contribute and help out.
The interesting thing for me is that the federated system allows for a potentially huge variety of business models, and we'll get to see what works and doesn't. Whereas reddit has to stick with just one
There used to be a daily progress bar on the front page of Reddit to show if the sales of Reddit Gold that day were enough to pay for that day's worth of server usage. I recall it usually hitting over 100%.
We don't know if that's the case, though...
You're right, we don't know for sure. But it's a good bet. I've been in tech a while.
Still, if they'd only communicate this and then use it as a reason for some other strategies for making money (without killing all user choice i.e. 3rd party apps), that would be a much more sympathetic way of approaching the issue.
100% agree with you.
They can always work together with platform developers to make profits. Yet they're killing the very platform that bring traffics to the site. I can only see greediness here.