De sociale nieuwssite Reddit genereert inkomsten door advertenties, maar een software-ontwikkelaar berekende dat Reddit ook flink verdient aan het ‘gold’-lidmaatschap.
Reddit made around three-quarters of a million dollars from the sale of ‘gold’ in 2014, one software developer has calculated.
The social news and community site has an unconventional fundraising method: Letting users buy ‘Reddit gold’, a kind of subscription that gives them additional features — and also allows them to publicly gift gold to other users in return for a good post.
The act is known as ‘gilding’, and gilded posts publicly display a gold star icon beside it and are aggregated on a dedicated page on the site.
Since 2013, Nathan Reed has been trawling this page in order to try and calculate the total raised through gilding. He estimates that in the last month, it made $67,714 — $94.05 per hour. Casting his eye further back, he calculates that gold raised $778,528.80 in 2014, up 231% on 2013 — $235,254.39.
The figure for 2015 currently stands at $650,082.72, suggesting it is unlikely to break the million-dollar-mark before the end of the year.
Here’s how much was raised over the last month:
Reed acknowledges there are some limitations to his methodology. In an email to Business Insider, he points out that he “can’t count gold that people buy for themselves, since this doesn’t get applied to a comment.” He has “also had one or two server outages over the past few years, causing me to miss a few days of data, so the yearly numbers are not 100% accurate.”
Additionally, the data doesn’t take into account transaction fees Reddit will be paying, which will eat into the bottom line. But nonetheless, Reed says that he is “pretty confident that the numbers are broadly accurate. I’d be willing to put money down that I’m within 10% of their internal number.”
The figure pales in comparison compared to the funds Reddit has brought in from other sources. In 2014, it raised $50 million in venture capital cash, with investors including startup incubator Y Combinator president Sam Altman and Marc Andreessen from Andreessen Horowitz, as well as Peter Thiel, Jared Leto, and Snoop Dogg.
It also raises money through advertising on the site — in 2014, the company had ad revenues of $8.3 million.
So what does the money from gold buy? Not necessarily all that much. It’s unclear how much Reddit pays its staff: former CEO Ellen Pao said it offered salaries “at the high end.” Unconfirmed salaries on jobs site Glass Door rank from between $79,000 and $157,000. Reddit is based in San Francisco, where the average software developer salary is $103,367, according to Glass Door. So whatever the exact salaries at Reddit, it seems unlikely that gold can afford to pay for more than half a dozen employees per year. The company has 70 people on the team.
Reddit has long been struggling to become profitable, a challenge made more difficult by the sometimes toxic content shared on the site, and the community’s distaste for advertising. Investors seem confident it will achieve it eventually, however: Its 2014 funding round valued the company at a rumoured $500 million.
Reddit did immediately respond to a request for comment.