Paywalled subreddits and AI-powered features will be at the front of Reddit’s new revenue strategy. The change comes days after the company went public. According to CEO Steve Huffman, who presented the updates during the second earnings call for Reddit, users need not worry about the free version, as it will continue to grow. Still, exclusive content could soon be placed behind a paywall alongside private areas.
The company has been quite aggressive in looking out for new sources of revenue since its initial public offering. It increased API fees for third-party applications that are dependent on its platform. The inked deals with Google and Open AI helped them train AI models using Reddit content.
Later this year, Reddit intends to have a trial for AI-generated search capabilities, in which the company will summarize and recommend content, thus allowing users to find new communities and interests. According to Huffman, in due time, AI-generated search capability can be used to generate ad revenue.
It’s Q2 earnings were far improved for Reddit. The sales jumped 54 percent year over year, with net losses narrowing to 10 million from 41 million—an upbeat sign for shareholders but less so for users.
This will be the big turn in Reddit’s revenue strategy. The site aims to strike a balance between user satisfaction and shareholders’ interests. Just like how Reddit is changing, so must its community.
