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What does the Reddit blackout mean for the sports industry?

Despite Reddit’s influence, it rarely makes headlines. But planned API changes have sparked protests and blackouts, taking popular communities offline. But what does this mean for the sports industry and how the platform is used by advertisers and rights holders? SportsPro explains.

21 June 2023 Steve McCaskill

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Reddit occupies a special place in the digital landscape. Founded in June 2005 by University of Virginia students Steve Huffman and Alex Ohanian, Reddit pitched itself as the ‘front page of the internet’ that would help users discover content tailored to their interests.

For the majority of its existence, Reddit has disproportionately influenced popular and internet culture without truly breaking into the mainstream. But in recent years, its user base and revenue has grown significantly to the point that it is starting to become an important channel for advertisers.

It is often mentioned in the same breath as Facebook, Instagram, TikTok, Twitter and YouTube when it comes to social strategy. However, Reddit’s singular focus means it arguably has more in common with mid-2000s Web 2.0 contemporaries Flickr, Last.fm and StumbleUpon than it does with the all-encompassing social networks.

In truth, it’s something of a hybrid between a modern social media network and the old school web forums that were once commonplace across the internet. And, perhaps more common with these forums, Reddit has a very passionate, highly engaged user base who see themselves as much as custodians as they do customers.

But why is a platform that has been content with sitting on the sidelines for so long been making headlines in the past week? What does the upheaval mean for the sports industry? And should Reddit be an important part of a social strategy? SportsPro explains all.

How does Reddit work?

The two key differences between Reddit and the aforementioned social media platforms are the former’s focus on community – something that has arguably been imitated by Facebook’s Groups – and the lack of algorithmic feed. Users have a feed on their homepage, sure, but this comprises posts from ‘subreddit’ communities they are a member of.

There are more than 100,000 subreddit communities based on virtually any mainstream (and some more obscure) topic you can think of. There are subreddits devoted to current affairs, cooking, history, cartography, weather, television, video games… you get the picture. Each of these subreddits has its own rules and team of moderators who enforce them. Reddit has its own content policies that prohibit abuse, scams and spam, but communities are largely self-disciplined. Adult content is permitted so long as it is both legal and tagged appropriately.

Rather than algorithms, posts within subreddit feeds are promoted using an ‘upvote’ system, whereby members of the community indicate their like or dislike of certain content. The more popular a post, the more likely it is to appear on the feed. Crowdsourcing trumps algorithms.

Reddit’s interface might lack the bells and whistles of other web giants – prior to a redesign in 2018, Huffman described the interface as “dystopian Craigslist” – but the site has a diverse audience, boasts more than 57 million daily active users, and some of the largest subreddits have millions of ‘Redditors’ responsible for many cultural and online phenomena.

But even smaller subreddits amounting to a few hundred members can offer a highly engaged audience for targeted marketing campaigns that don’t rely on the sprawling bid-based advertising networks that may not deliver the same results. In Reddit, advertising and sponsored posts appear alongside the upvoted content.

In 2021, Reddit made US$305.1 million in revenue, most of which came from advertising. That figure is now believed to have gone beyond US$500 million and Reddit can count the likes of UK broadcasting giant ITV and numerous sports organisations among its partners. Reddit even has a premium subscription-based offering for its most devoted Redditors yet hasn’t caused as much controversy as other similar initiatives.

Reddit might be flying under the radar, but its simplicity and the promise of a traditional publisher–advertiser relationship is paying dividends.

AFL Reddit

The Australian Football League (AFL) offers Reddit users the ability to express their fandom across multiple communities (Image credit: AFL)

How is sport using Reddit?

Some of the most popular subreddits are sports based. The generic ‘sports’ vertical has more than 20 million members, while there are communities based on individual sports, teams and athletes, as well as other areas of sports culture such as video games, fantasy sports and card collecting. There are also some more legally-dubious communities focused on unofficial streams.

While most of these subreddits have developed organically, and are therefore a more authentic form of fandom, many rights holders have entered into content partnerships to foster this engagement.

The National Football League (NFL) is the subject of one of the largest such communities, and entered into a more formal arrangement with Reddit in 2019. It hosts ‘ask me anything’ (AMA) sessions with players, serves up historical highlights, and provides behind the scenes content. The NFL also offers collaborative opportunities for its advertisers. The NBA, never too far behind a significant technological trend, has a similar partnership.

Some are offering ways for fans to express themselves beyond the confines of these subreddits. Last year, the Australian Football League (AFL) became the first major sports league in the world to launch an official avatar range on Reddit, allowing fans to personalise their presence on the social media platform with gear from their favourite team.

The skiing subreddit largely focuses on participants rather than the elite World Cup circuit, but at 1.4 million members it’s an ideal audience for equipment manufacturers and travel operators. And even a smaller subreddit can be an opportunity for a rights holder or advertiser. While Twitter might have the scale, communities rely on mutual followers and hashtags rather than a dedicated home.

In March this year, Twitter’s former head of North America content partnerships Sarah Rosen joined Reddit as senior director of content partnerships, with sport a large part of her remit. 

Apollo offers users an alternative way to view content on Reddit

Why is there a blackout?

Reddit’s growth and influence owes much to the freedom it grants communities and moderators. While Instagram and others fret over the type of content that appears on their site, Reddit adopts a laissez-faire approach to provide a digital home in a relatively mainstream framework. The absence of censorship also means fewer overheads and makes Reddit more profitable.

The flip side of this social (media) contract is that this freedom also gives Redditors significant power and a sense of ownership over the platform. The conditions are ripe for an activist user base that can exercise this power when it feels a sense of injustice.

This situation is causing headaches for chief executive Huffman as he seeks to transform Reddit’s influence into profitability and hold an initial public offering (IPO) – a target that has seen him clash with the site’s membership.

The most recent example of this is a protest at Huffman’s decision to charge users of its application programming interface (API). APIs essentially allow different types of software to communicate and share data and functions with each other rather than operate in isolation.

Huffman’s supposed target of this change was users who had created entire businesses on Reddit that it didn’t profit from and tech giants looking to feed their artificial intelligence (AI) algorithms which could generate billions for their owners. However, third-party readers and other applications – such as those Reddit moderators use to manage their communities – have also been affected by the changes, which will happen within one month.

Apollo, an application which promises a more intuitive, faster, and multimedia focused Reddit experience believes it would need to spend US$20 million a year to use the API and has no way of paying its bill within Reddit’s deadline.

This has mobilised Reddit’s user base. As many as 8,000 subreddits vowed to block or restrict their content for two days – a move designed to limit Reddit’s functionality and advertising revenue. Far from resolving the issue, both sides have dug their heels into the sand, with many continuing to observe a blackout. For a niche advertiser targeting the curling subreddit, for example, that could be a significant blow to their marketing budget.

What is Reddit saying?

In an interview with The Verge, Huffman argued that the Reddit API was “never designed” to support third party applications and it was his fault because he “let it exist”. He said 90 per cent of apps that used the API would be covered by free limits and that Reddit had worked with moderating apps and accessibility apps to ensure they weren’t affected. It has also promised to improve first-party moderating tools. 

He lamented the fact that third party apps like Apollo had chosen not to engage but was adamant that the cost of supporting the API was unsustainable. Especially when, in his eyes, the API was effectively subsidising apps that were costing it revenue.

“It’s been going on for a very long time,” Huffman said. “Folks have made millions. These [apps] aren’t like side projects or charities, they’ve made millions. One is owned by an ad network. They have no contract with us.

“Our peers just turn them off. Reddit’s the only company that allows these sort of competitive products to exist, and we’ll allow them to continue to exist if it’s fair, if they’re on equal footing, which is paying for their data in the same way that we have to.”

In multiple interviews, Huffman said there was no chance of Reddit backing down, while the company has argued there has been little impact on advertising campaigns. Longer-term, Huffman has suggested curbing the power of moderators by making it easier for users to “vote them out”. Currently, moderators can only be removed by a more senior user.

“If you’re a politician or a business owner, you are accountable to your constituents. So a politician needs to be elected, and a business owner can be fired by its shareholders,” Huffman told NBC News.

“And I think, on Reddit, the analogy is closer to the landed gentry: The people who get there first get to stay there and pass it down to their descendants, and that is not democratic.”

While curbing the powers of moderators might make Huffman’s life easier and appeal to shareholders, it also risks a fresh batch of protests from an already-radicalised user base.

“Reddit’s the only company that allows these sort of competitive products to exist, and we’ll allow them to continue to exist if it’s fair, if they’re on equal footing, which is paying for their data in the same way that we have to.”

Steve Huffman, Chief Executive, Reddit

What happens next and what does this mean for the sports industry?

Reddit is adamant that it will not back down from its planned changes, arguing they are essential for the future viability of its platform. It says that 80 per cent of its top 5,000 communities (measured by daily active users) remain open and that there has been minimal impact on its advertisers. With regards to sport, it notes that the Denver Nuggets were still able to create a home for discussion following their NBA finals victory.

However, should disruption continue, then advertisers might be concerned they aren’t reaching the widest possible audience. Larger brands might be able to stomach such a situation but smaller firms targeting a niche community might fear their budget going to waste.

The threat of future protests could also linger in the mind of both commercial and sporting partners – especially at a time when the upheaval at Twitter might have strengthened Reddit’s position as a viable alternative.

The other risk is on the user base. The hostilities could alienate key members of Reddit communities, particularly moderators, that are a huge reason behind the platform’s success – helping to enforce rules and drive activity with no financial reward. Some fear Reddit may never be the same again should they leave or not have access to the same capabilities, and that spam, misinformation and hate speech could become more common. That would inevitably have an impact on user and advertiser activity. 

There’s also the possibility that even more users could become frustrated by the disruption – an angle pushed by Reddit during Huffman’s interview with The Verge as evidence the protests did not have popular support – and reduce their activity. While this would ultimately harm Reddit as well, some smaller, niche sporting communities would lament the loss of such engagement. 

While there are fundamental differences between the situations and philosophies at Twitter and Reddit, it isn’t entirely unrelated to mention that many of the doomsday scenarios predicted for Twitter have failed to materialise.

Twitter’s users value a platform that has few competitors and the same is true of Reddit – which is arguably even more unique.

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