Reddit is reversing course on its plans to put some subreddits behind a paywall, at least for now. CEO Steve Huffman said the company is "shifting resources away" from the effort as it doubles down on search.
During the company's recent earnings call, Huffman said that Reddit was "deprioritizing" its work on "user economy" initiatives in order to put more resources into turning the site into a "go-to search engine." In a follow-up AMA on Reddit, he confirmed this includes pausing work on paid subreddits.
"To stay focused on what matters most, we’re shifting resources away from a few areas, such as work on the user economy," he wrote. "This includes what some have referred to as paid subreddits." Though Huffman added that "it's still an opportunity we believe in," it's a notable departure from comments he made in February, when he said such features would be rolling out in 2025.
Reddit's priorities have apparently changed considerably since then. While paid communities were meant to appeal to Reddit power users, the company still very much needs to grow its user base, according to Huffman. "The folks previously working on user economy will join our efforts to improve the core app, including onboarding and personalization," the CEO explained in another AMA response. "That gets at our most important need today, which is logged-in core user growth."
While Huffman has spent the last year hinting at paid features, it's not hard to understand why Reddit would now be shifting away from that model. Advertising is still very much the most important part of the company's business, as Huffman explained. And adding more core users to the platform will be key to growing that business. To put this in perspective, during the last quarter, Reddit pulled in $465 million in ad revenue and just $35 million from "other" sources, like data licensing and Reddit premium. Even if paywalled subreddits could substantially increase that "other" number, it would still be a small fraction of what the company is making from advertisers.
So while paid subreddits may still be on the company's roadmap, users shouldn't expect to see them any time soon. They can, however, probably expect to see more ads in more places on Reddit over time. For example, Huffman said that the company sees "ads on search return pages … as a future opportunity."
This article originally appeared on Engadget at https://www.engadget.com/social-media/reddit-puts-its-plans-for-paid-subreddits-on-hold-181455933.html?src=rss
