Reddit CEO Steve Huffman on blackout: It's expensive to run a company In his first interview since thousands of subreddits went dark in protest, Huffman said he is not going to reverse his plan to start charging for outside access to Reddit data.

Reddit CEO Steve Huffman: 'It's time we grow up and behave like an adult company'

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A MART├ŹNEZ, HOST:

Protests against a new fee structure at social media site Reddit have meant that large parts of its content went dark this week. It's a big deal for some of the 57 million people who use the discussion site daily. And it also reflects some larger shifts in social media. So CEO Steve Huffman talked with our own Steve Inskeep for his first broadcast interview since the protest began.

STEVE INSKEEP, BYLINE: Reddit users keep threads of conversation going on thousands of topics from politics to pop culture, to porn. Many people use it through apps on their phones. And some of those so-called third-party apps say they will shut down now that Reddit wants to bill them millions of dollars to use its content. That's why operators of almost 9,000 communities on Reddit protested this week by having their conversations go dark. When CEO Steve Huffman came on the line, he insisted the protest only affected a small part of the business.

STEVE HUFFMAN: So Reddit is about 100,000 communities, right? And these communities cover every kind of topic imaginable. There was some disruption, but mostly on our back end because the shape of Reddit changed. But in terms of the business, there's plenty of content. Most of our users got to enjoy that content. You know, that's really what Reddit is all about.

INSKEEP: I want to make sure of what you're saying here. If someone is protesting or boycotting your business, they want to cost you money, which would influence you. I think I hear you asserting that you have not really been cost a lot of money or a lot of trouble here. Is that right?

HUFFMAN: It has not cost a lot of money. It's been a fair amount of trouble in the sense that this is what we're working on this week. But from a business point of view, not particularly disruptive.

INSKEEP: So did the protesters persuade you to change anything at all about your strategy?

HUFFMAN: No. We've had protests like this before. So for some context, Reddit is a platform powered by people. The communities are made by people. It's a democratic platform. And so this is not the first protest that we've seen. However, in this case, we've been subsidizing other businesses for free for a long time. We're stopping that. That is not a negotiable point. We were simply in an unsustainable position. And so we need to get into a sustainable situation. And so that's the core of this change.

INSKEEP: I have so many things to follow-up on and this is one of them. Bobby Allyn, our tech correspondent, spoke with the founder of Apollo, which is one of the third-party apps that has been using Reddit and has built its business on Reddit. Christian Selig is his name. And he has a question not just about what you're doing but how you're doing it. Why, he asks, did Reddit decide on just a 30-day period for this transition, which gives them, in his view, virtually no opportunity to adjust their business model to the way you're adjusting yours?

HUFFMAN: So we actually started talking about these changes, including with Christian and the other third-party apps, back in April. They all knew this was coming. What they didn't know was the price. Now, the two largest apps, Apollo and another one called Reddit Is Fun, have just decided they don't want to participate going forward. So they're shutting down at the end of this month. The other third-party apps we are in conversations with and there are areas of opportunity to be more flexible, to give longer transition times, to go a little deeper - for folks who want to have productive conversations with us, we're here. We're having those conversations.

INSKEEP: The folks at Apollo, I guess, would not say that they don't feel like participating, but that they cannot pay the price that you are charging. Is there a case to be made that you've charged too much here, that you are going to drive people out of business?

HUFFMAN: The cost is the cost. So it costs us tens of millions of dollars a year in pure infra - meaning infrastructure...

INSKEEP: Right.

HUFFMAN: ...All the work that goes into supporting that. And then the opportunity cost of not having those users on our advertising platform...

INSKEEP: Right.

HUFFMAN: ...Is really significant. So at the end of the day, it's simply expensive to run an app like Reddit. But it can be done. And if you want to do it, we're here to try to make it work.

INSKEEP: So you would deny that you're trying to drive the third-party apps out of business?

HUFFMAN: I deny that, yes. But like I said, we're still talking to a handful of the other third-party apps. And we'll see if we can make it work.

INSKEEP: You probably know that some analysts are connecting a lot of different news items from the world of social media - this Reddit story, what's happening at Twitter, what has happened at Facebook - and are concluding that you are in this sector that has had a business model that just fundamentally doesn't make sense, maybe never made sense, the idea that people would use everything for free and then they would be monetized through advertising or some other way. And we're now finding out there just isn't enough money to sustain that. Is that the way that you see social media right now?

HUFFMAN: Are you telling me that Facebook, one of the largest and most profitable companies of all time, is not making it work?

INSKEEP: (Laughter) I'm telling you I think their profits have gone down, sure. And I see - I don't know what's going on at Twitter. So you tell me if there's a story there or not.

HUFFMAN: So the business model absolutely works. So if you look at two of the largest companies on Earth, Google and Facebook, they make a lot of money. The business model works. Now, Twitter and Reddit, we're a lot smaller than those companies. But, you know, we have aspirations to be bigger. Our changes are a reflection of that. We had a tough week last week as well. We let some people go on a layoff. But long term, it's actually a great business model. And it can be really effective. And I think one of the things I like about it is it's actually also fairly transparent. As a user, you know what you're getting, right? You come to a platform like Reddit or any of the others we've mentioned, and you see the ads. It's not complicated. It can be complex, but it's not complicated.

INSKEEP: Well, Steve Huffman, thanks very much.

I've enjoyed talking with you.

HUFFMAN: My pleasure, Steve. Be well.

INSKEEP: He's the CEO of the social media company Reddit.

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