Image source @ Visual China
Wen | Wu Qi, the author | Li Xiaowei, and the supervising producer | Wu Qi
The large-scale attention of Chinese touchnet users to Reddit basically stems from Tencent's shot in 2019. As an early prototype of the forum community around the world, you can find reddit on too many products.
From the perspective of the information flow recommendation mechanism, today's headlines are like it; from the perspective of community decentralized moderator management, Baidu Tieba and Douban are also like it; from the AMA Q&A form, Zhihu also seems to have its traces.
When the management team announced last year that it had filed a registration statement with the SEC and decided to sprint for an IPO, a flood of analysis of Reddit poured in. This pearl, which was born out of the "golden age" of early Internet products in the United States, has a chance to shine in the future?
After combing through its revenue model, possible expansion and potential risks, we believe it is hanging. The ending of Reddit may have been written before the departure, and the IPO is only the final "sunset red".
01, lost pearls, abandoned children or darlings
From 2005 to the end of 2015, more than 30 social products have taken advantage of the wave of the Internet in the United States in the past decade – the first wave of social media in the United States, and Reddit, which was born in 2005, was the leader.
The year before, Facebook emerged in a cross-era fashion, with Zuckerberg and Harvard's roommates writing the initial code on campus and then preferring to drop out of school to go to Silicon Valley to make a big splash.
The following year, blogger founder Evan Williams launched Twitter, which claimed to "change the world in 140 words" to open the way for short blogging products around the world, and the birth of Weibo in China was influenced by it.
In 2006, users were visibly burned out of traditional blogging products. Tumblr, a form-updated, more active light blogging community, was launched in New York. Founder Davy Karp comes from a family of composers, and Tumblr's art content label is obvious, once dazzling in the content community.
By 2009, image streams had replaced plain text and began to take away users' attention on a massive scale. Pinterest rose to prominence that year, quickly topped the american photo-sharing community sites, and is still the designer's back garden.
Instagram was launched in the millennium, with a casual pat and filter conversion, and the picture sharing was fast enough and beautiful enough. When young people became wary of excessive social sharing and considered privacy, Snapchat was on fire in 2011 by "burning after reading".
Whether it's content communities, social media or instant messaging, they are all waiting for the prelude to the mobile internet. Silicon Valley is lit up, with product managers and programmers breaking the work life balance and often talking all night long.
Reddit was certainly the best of these early pioneers.
In 2005, Steve Huffman and Alexis Ohanian, still seniors, first received a start-up funding from the YC incubator and then sold Reddit to Condé Nast Digital for $200 million in just 16 months. The whole process wasn't as long as Alexis writing his thesis.
When the money arrived, Alexis called the Washington Redskins football team, "I'm going to give my dad an upgrade to the ticket seats this season, front row, 50 yard line there — please give me the best seat."
Early fame is not a good thing. Steve and Alexis, who became millionaires on Halloween night in 2006, may not have thought about the development of Reddit after that, like a ghost story.
After being incorporated into Condé Nast, Reddit seemed to have been sleeping under the wings of giants for ten years. In this golden decade, peers are staging speed and passion, but Reddit cannot fly freely under a large framework.
After all, young people who have just graduated from college are still in the future, and it is difficult for them to make the best judgment at a suitable time: for example, how a content community should grow. But ten years later, the answer became clearer.
In December 2014, Steve spoke in an interview about remorse for selling Reddit too early. After he left, some of the problems within the Reddit community had not improved, which made him vaguely aware that Reddit was in a bad state.
Reddit, known for its community openness and freedom, became an "outpost of the Internet" and began to constrain the dangers posed by this freedom of information. Pornography, violence and hate speech began to proliferate in the community.
Around 2015, Steve and Alexis returned to Reddit. By the time they regrouped, the situation had turned upside down. The first golden decade for content and social products is over.
The players who stood out in the first golden decade may have crossovers but the overlap rate is not high. Their products are mature, their paths are differentiated, and they take advantage of the huge opportunities of mobile terminals to meet the multiple needs of users in scenarios such as workplace socialization, interest socialization, latest news and in-depth discussion. As you can imagine, this cake has been divided up almost.
As a relic of the previous golden age, will Reddit be an outcast or a darling in the next decade?
02, Soul Lost Paradise, Meme manufacturing machine
Whether it's an outcast or a darling, the next decade is becoming more and more competitive.
In North America, Facebook is still the most closely connected platform for friends and family, with Linkedin leading the way in workplace social networking, Twitter playing tired, Facebook's generation with Snapchat, Instagram filling the gap, and the younger generation sweeping the world on TikTok.
After 2015, the short video application musical.ly (later TikTok) turned out to be a 15-second music with an easy-to-understand plot, and short videos quickly replaced graphics and text as the killer of content carriers. So far, there are at least 20 short video applications such as Tangi, Likee, Reels, Lasso, Zynn and so on in the US market.
Zhang Yiming once mentioned internally that the original idea of today's headlines was to do China's Reddit. To become the "outpost" of the Internet, the core mechanism is high-heat recommendation.
In Reddit's form of information organization, voting is often used to show the influence of content. If you post or comment that evokes more positive reviews, the more obvious the location will appear. The high-heat recommendation mechanism ensures that users will not miss any "headlines".
A few days ago, Ryan Coogler, the Oscar-nominated director of the film "Black Panther," was mistaken for a robber by staff when he withdrew money from bank of America and was detained by the Atlanta police. The post quickly became the S-list headline of the day. It's still on the front page of the r/faceplam group.
When users sign up on Reddit, they automatically become Redditors and inhabit more than 2.2 million subreddits (hereinafter referred to as groups).
At least 130,000 groups are highly active, such as r/WhatsWrongWithYourDog, a group of dog lovers, where more than 12,000 people share delicious ice cream, and where 1.2 million people gather in r/psychology groups to discuss psychology every day.
Differentiated individuals can find interests here, drifting lonely souls can be taken care of in this paradise of loss, and a sense of connection and belonging within the group is achieved. This emotion migrates from online to offline, and even initiates gift exchange activities within the group, and Redditor once received gifts from Bill Gates.
The concentration of emotions within the community also reached a peak. The most famous representative event is the retail war Wall Street incident launched by the r/wallstreetbets (WSB) group last year.
When the institutions decided to short the stock of the GME game station, retail investors came down to pull the stock price back to the high, which eventually led to the financial shortage of the big institutions. Discord, the social software they used to chat at the time, was once derived from game enthusiasts within the Reddit community.
In addition, Redditors spontaneously form some witty jokes, which become "Meme maker" (Meme is similar to the Chinese context of the meme). Like the follow-up discussion in the r/faceplam group about "director Ryan Coogler is wrongly accused", Redditor joked that perhaps Ryan Coogler should return to the cash withdrawal counter after being released and say, "Have you ordered the money, please hurry!"
In this incident, the "stereotype of black people in mainstream American society and the dissatisfaction of the public with the operational efficiency of commercial institutions such as banks" has long been hidden behind the ridicule. This stems from the strong concern of Redditors within the community for public events and social issues.
In the history of Reddit, Redditors have never been absent from the public opinion field of large public events, and even most of the time, they are the storm center of the public opinion field.
From the Hollywood nude photos scandal, the exposure of a large number of celebrity nude photos, to the extremism behind the Boston bombings that led to the injury and death of multiple people, from the 2016 presidential election, the Pizzagate child sex trafficking incident to the complex discussion of innuendo behind the gamer's door, Redditor is always at the forefront.
Because the community entrusts content management to semi-part-time group moderators, they do not pay too much attention to the rating and review of content, and information about pornography, violence, pedophilia and so on is as dense as a hair, lurking under the groups like a reef.
And in an anonymous, boundless discussion field, even if Reddit can become a Meme buzzword maker and recreate the democratic discussion field of ancient Greece in Athens, it cannot make up for its failure to allow this kind of information to flood.
This is a hidden danger for the future.
Founder Steve tried to solve this problem after returning to Reddit, and some groups involved in sex and violence were closed forever, but they were able to start again in a short time.
03, how to make a profit for Reddit
And when capital began to pay attention to Reddit, one question that could not be bypassed was: How did Reddit make a profit?
Historically, high-net-worth users and dynamic communities don't seem to have generated the expected high income for Reddit. Although advertising revenue exceeded $100 million in the second quarter of 2021, an increase of 192% over the same period last year, it is only a small shrimp compared to Google and Facebook , google revenue in the second quarter of 2021 reached $61.9 billion (mainly from YouTube and search ads).
Due to the anonymity of users, it is difficult to collect information related to them. The ensuing effects are twofold. First, advertisers can only post content under subreddit groups or AMA Q&A, and try to get as many likes as possible and be at a high level. This makes the precision delivery of advertising much less efficient, and it is almost difficult for advertisers to match users with geographical location, interest preferences and age groups.
Second, anonymity makes it difficult for the community to come up with the best KOLs, and even founder Steve's personal homepage is fairly simple. When the KOL's appeal in the community is insufficient, the followers are not enough, and the chances of the brand reaching potential users through the KOL are few. This has led to a large number of brand owners choosing to abandon Reddit and switch to high-conversion platforms such as TikTok and Facebook.
In addition, marketing is never easy on Reddit, and the slightest carelessness will encounter counter-killing.
In 2012, the promotion on Reddit before the release of the American movie "Fortress" directly overturned. Famous actor Woody Harrelson asked questions in the AMA session. According to the AMA rule, "you can ask anything," and when a user asks about Harrelson's private life, they immediately say " Sorry, let's focus on the movie ( not private life ) " .
If you can't afford to play, don't play. In a community of rough and wild content, this behavior would be highly despised because the questioner was "not sincere enough," which almost angered the redditors' bottom line. A large number of users began to boycott the movie "Fortress" and ridiculed the publicity work done too roughly and clumsily as a publicist.
One interesting fact is that Mindfiremedia, a company that does SEO SEO, also tried to recruit employees in r/seo groups, and they posted posts but no one cared. The elite users who gathered in the group were reluctant to tell Mindfiremedia that "you're in the wrong place."
Because this is an SEO company, it should be able to understand Reddit's r/seo group atmosphere is "welcome SEO practitioners to discuss SEO technology, against employers to recruit people to advertise in the group", Mindfiremedia shows "unfamiliar with community and group rules, atmosphere" just shows that this SEO company is not good at its core business, posting to recruit people is to black themselves.
Based on the above, advertisers marketing on Reddit must face the embarrassment of being difficult to accurately reach the target users, but also have to deal with the possible brand negative storm, for advertisers with limited budgets, throwing money at Reddit may not be the best choice.
According to the current development of Reddit, in addition to advertising, the only two stable other revenue channels are Reddit coins and advanced paid subscription services.
Reddit coin is a virtual commodity that rewards users for seeing excellent content contributed to the community by other Redditors, while premium paid subscription services skip ads for an annual fee and receive 700 free coins per month.
Overall, Reddit, which relies too much on advertising and has a single revenue structure, is indeed difficult to let investors see hope in commercial monetization, and they have begun to urge Reddit to achieve further growth.
04, the struggle of the commercial road
In 2017, Reddit introduced video content for the first time and added live streaming through the Reddit Public Access Network (RPAN) program. After the project received rave reviews, Reddit bought the short video platform Dubsmash and integrated its video filtering features into Reddit.
At the time of the acquisition, Dubsmash had more than 1 billion video views per month, and 30% of users logged in and created new videos every day. About 25 percent of black American teens also use Dubsmash. Benefiting from the multi-user and high viscosity brought by Dubsmash, Reddit's overall video viewing time will increase by nearly 70% in 2021, and the number of daily active video viewers will increase by more than 30%.
When Tiktok set off a short video trend in the United States, Reddit won Dubsmash, which was once interpreted as a key signal that Reddit finally grasped the next decade, and many analysts believe that its monetization ability has finally ushered in a turning point. But on February 22, 2022, Reddit announced that it would shut down Dubsmash.
In addition, the management team is also trying to expand revenue possibilities through geographical expansion. In August 2021, Steve Huffman mentioned in an interview with CNBC that Reddit will use new funds to further expand its international influence, but the current path to internationalization of the community does not seem to be going well.
According to Statista's Statistics on Reddit desktop access in July 2021, Reddit's main traffic comes from the United States, accounting for 48.93%, followed by the United Kingdom and Canada, accounting for around 7.5%, followed by Australia and Germany.
A hidden language resistance can be seen in it. The top four countries where the traffic is mainly distributed are all English language areas, while Germany, which is in the fifth place, has a high proportion of people who can master English due to the high level of general education.
The current postings and discussions within Reddit are mainly in English, which both determines its popularity in English-speaking countries and hints at its expansion disadvantages in Spanish-speaking areas or other multilingual countries.
Against this backdrop, going to nasdaq to ring the bell may only be the last and only option.
Over the past five years, CEO Steve Huffman has been strongly obsessed with the go-to-market process. This seems to be a necessary fortress in the capital game, and it is also a vivid interpretation of the personal show. In any case, Reddit is Steve's fame, and the myth of a big man legendary in silicon valley technology circles and venture capital circles should not be easily broken.
In 2017, at the Internet Summit in San Francisco, Steve mentioned that Reddit was considering a public IPO. The media is following up on this "accidental leak" of the news. In an interview with the magazine Variety, Steve said that it is still a long way from the real listing, but going public is the company's "only responsible choice" in the future.
In 2021, in a conversation with The New York Times, Steve began to hide his anxiety about rushing to go public. He made a more subdued statement – "All great companies should go public when they have the ability". “All good companies should go public when they can.”
However, one of the revenue paths of All Reddit is likely to be an opportunity in the future.
In last year's "Reddit Recap 2021" report, users mentioned cryptocurrencies 6.6 million times in the community, and Reddit is increasingly becoming a hub for cryptocurrency enthusiasts. Therefore, Reddit may have a successful cornerstone for cryptocurrencies.
If cryptocurrencies are realized, it may not be difficult for the community to reach a positive cycle of content economy. The significance of this content testing ground is that in the future, users can swipe their cards or cash to buy Reddit's own bitcoins and spend them in this content community. For example, it is here that record musicians can sell their NFT records, earn cryptocurrency income, and the copyright can be traced.
05. The regurgitation of liberalism
In 2018, Reddit surpassed Facebook to become the third most visited site in the United States after Google and Youtube. Although it has declined since then, it is basically ranked within the top ten.
This seems like a positive sign that Reddit seems to have a cycle-through competitiveness.
Compared with mainstream social platforms in the United States, Reddit's most advantageous point is that it provides users with a relatively free, secure and anonymous space. No mobile phone number, no ID required, just an email address, you can sign up for a Reddit account.
When you browse content on Reddit, your search history is not saved. The day-to-day management of each subreddit (group) is the responsibility of the moderator, and the community is not overly involved.
But everything is dialectical. This sheer freedom has also led to a great deal of hateful, horrific rhetoric.
In 2014, then-CEO Ellen K. Pao tried to address problems within the Reddit community: the lack of regulation of hate speech, such as the fair balance between free speech and regulatory measures. But after the "Gamergate Incident" (where female game producer Zoe Quinn was revealed to trade her body in exchange for a game critic praising her for a game she made), that effort came to naught.
In a conversation between Claudia Dreifus and Ellen K. Pao in the New York Review of Books, Pao, a female manager, expressed deep unease about the phenomenon. Silicon Valley tech mainstreams generally embrace absolute liberalism, a climate that is particularly common among male executives. And they, like Steve, have been hesitant to make a "drastic overhaul" of Reddit's content regulation.
Pao's concerns are not without merit. If the Internet community or platform excessively advocates "pure, extreme liberalism" and does not interfere with the content of users' posts, the subsequent impact is extremely bad.
For example, some extremists, even supporters of Nazism, will hide their views in the real world, or at least refrain from showing their tendencies, but in the online world, they will fully expose their own orientation, and if the platform or community does not stop or interfere, they are likely to become an amplifier of some kind of voice in the dissemination of information, thus accelerating the deterioration of the situation.
When Pao decided to implement a new policy on Reddit prohibiting the release of retaliatory and cyberbullying, she suffered a massive backlash from users: more than 200,000 Redditors signed petitions to oust Pao, and the female CEO chose to voluntarily leave.
When the management team decided to let Reddit go public, similarly, some users' privacy concerns led them to revolt against community-regulated content, believing that "Reddit may no longer be a pure and free land".
But the enormous harm this freedom has done should not be ignored. If IPO, Reddit can move towards a higher degree of compliance, and a better balance between free speech and reasonable regulation should be respected by Redditors.
Perhaps, only the investor and management team will be able to change the fate of Reddit after the listing. The Redditors didn't care that much at all.
What they care about is that people who have come and left here, whether they are bright or dark, have more or less witnessed and participated in those historical moments.