Except that's not what Reddit is doing here. They're charging 3rd party clients ~21X what they lose in ad views, pricing them completely out of the market.
Otherwise I will ignore this claim because we simply don't know what ad revenue per user is, and we don't know what Reddit's projected future revenue per user is, which I would also expect to be covered by this pricing.
To look to the Twitter example, even when I used a third party Twitter client before Elon came onboard, old Twitter were regularly playing silly games with issuing auth tokens to third party clients, for all of the same reasons.
At this stage I view third party clients as nice to have for major free web service APIs, with the expectation one day it will probably stop working. Reddit doesn't owe anyone a public API, as much as I will miss third party clients (big Narwhal user here).
And maybe they will soon learn that they are not owed an audience.
Credible citation needed
EDIT: Okay I see the 20x figure in the article
If the API is solely for your own consumption, this can be simpler, and of course third party clients are harder to monetize as the kinds of ads you can serve are going to be restricted to what you can force a third party client to receive and render.
If the number of users on third party clients is really low, all of the above can carry more weight in internal business case style discussions too.
My fellow mods and all prominent users I interacted with (the vast majority of them not from tech as it was not a tech focused community) were all well aware of 3rd party clients, and many used them.
This is very anecdotal, but amongst Reddit more "intense" user base, I would be surprised if 3rd party client usage was low.
I wonder how many power users, heavy users, or content generating users use unofficial apps. The passive lurkers are great for ad revenue, but the people who comment make the site worth browsing.
2. It's the OP's assertions and estimations as an outsider, it's not based on any insights.
They would instead rather charge far more money for data access for things like AI training etc, Twitter have also made similar changes to their own API to prioritize high bills for AI training use cases, not third party clients. That's at least how I see this change. The high pricing for these customers also removes the need to worry about the ad tech situation as is the case in the third party clients - you can just offer them an ad free feed at these prices for the training requirements.
I suspect the internal at Reddit desire to have less third party clients may well predate the AI discussion too, given almost all companies in this position eventually want to wind down those clients as history has shown again and again, for all of the reasons discussed in this thread.