this post was submitted on 08 Jun 2023
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I imagine his intend was to imply - or at least put pressure on - the idea of Apollo actually costing them $20mil was an inflated number. The idea that it was a real and on-going cost, and had been for a decade, and he's basically daring them to buy Apollo. Because if that number was real, they should leap at the chance:
I believe that's why it was 'mostly a joke' - he never expected them to take it, he doesn't believe it actually costs them that much. It's not what he's taking from them - it's what they feel entitled to take from the users, and they blame him for being in the way.
Personally I agree it doesn't cost that much - I believe they believe it does, but only because they look at Apollo's userbase and activity, and decided "oh boy, if we could sell ads to those users and sell their data at those rates, this is how much we would make" and decided that means Apollo is somehow costing them that. I don't think 'opportunity cost' is an appropriate concept to price on, because it relies on obviously false assumptions.
Apollo is definitely costing them server bandwidth, as are the other apps. And it seems all the devs were ready and willing to cover the costs, even negotiate how their users could still be a revenue stream. But Reddit believes they were owed the same profit of Apollo's users that they would make off of their own, and I think that's nonsense.
After all, if somebody pirates Photoshop, it's stupidly naïve to think that every single one of those users would be willing to pay Adobe $80 a month (in some countries that's more than they make in 3+ months). And if somebody goes to a friend's house and watches a Blu-Ray with them, it's absurd to expect they mail a check for $20 to their local theatre.
The expectation that somebody using something convenient/free would use it just as much if it was demanding/unaffordable is... like, they're not stupid, right? They can't possibly be that stupid to think that was even attainable profit for them. I just don't understand why they think that 'opportunity cost' is real.
I think a back of the envelope cost for what each user makes reddit per month was something around $0.22 per month. Which is nowhere near the $2.5 per month their API pricing was suggesting.
This wasn't a question of opportunity cost, and setting prices in good faith. They simply wanted to kill any competition and somehow thought they could get away with this. Hopefully we can show them they can't with the blackout and migrating to other online communities.