How come Reddit's hosting costs are so high? It's a content aggregator so mostly directs to other sites. While for original content, it used to rely on Imgur for hosting images, does it not anymore? And text content shouldn't use that much resources or maybe I'm wrong?
It really realllly shouldn't be they host comment sections for links to other more technically impressive websites.
Like we are talking about a cost they willing absorbed for like 10 years running without noteworthy complaint. Yet now as of like this month the cost is suddenly so onerous that everyone has to start paying an extortionate rate at the end of this month.
Good faith business arrangements are not typically changed with one months notice. And they is no plan for accessibility or mod tools or the backlash. They didn't even have time to couch the CEO on how to handle the questions in the AMA.
They wanted to be the next Tiktok/Youtube Shorts/Instagram Reels and added expensive video hosting. Yay for ad impressions and mainstream adoption of mindless scrollers, but a good chance the costs drove up well beyond the influx of ad revenue/premium.
That and Reddit admins have to scrounge every penny to look pretty for their IPO.
I don't believe their hosting costs are that high. But they did go from about 700 employees to somewhere around 2000 employees. I suspect a lot of their overhead is headcount.
This doesn't get mentioned enough. They drastically increased their workforce during covid. That is a massive new expense and what exactly do they have to show for it? Has Reddit improved in that time? I don't see that it has. Now suddenly this bizarre API move. None of it adds up to good leadership to me.
They also could have taken loans to reinvest in growth. From buying alien blue, to their api, to backend changes to add new ad offerings and whatever else they sell to companies... They're all major efforts, and probably include marketing campaigns
If they took loans to grow... Well if you grow explosively it's a huge win, but if you don't you're weighted down moving forward. And investors are going to love it, since they don't care about breaking even, they care about that one investment that's going to go 100x or more
it used to rely on Imgur for hosting images, does it not anymore?
People still use imgur, but reddit hosts a fair amount of content directly now. It's video player is notoriously bad. Imgur has slowly turned into a socia media in it's own right and is slowly starting to move off reddit (deleting images uploaded by non-account holders for instance).
They still have to host users, feeds, and comments which can add up very quickly. Also, they do host some images as well like when people upload to them.