Reddit Business Model – How Does Reddit Make Money?

People spend hours and hours browsing the internet. If you’re the one who spends maximum time on the internet then you would have heard about REDDIT. The interesting and latest stuff is posted and discussed on Reddit.

Reddit is the growing platform

  • Top 5 most visited website in the United States
  • 430+ million active users per month
  • Over 130 thousand communities
  • 30 billion monthly views
  • 17th most visited website around the world

Many businesses are promoting their products or services on Reddit. As the platform consists of a large number of audience. Simply put, the Reddit website has been actively attracting the advertisers as the platform strives to take advantage of its wide range of readers to build its brand. The company has owned one of the leading websites but unfortunately, the platform has not earned $100 million every year. Reddit is searching for multiple ways to make money. The team have come up with great ideas such as advertising on the website. Also, increasing the number of display ads. On the other hand, Reddit is making good income through mobile advertising and sponsored opportunities.

Let’s dive into the topic.

What is Reddit?

Reddit is the leading news aggregation platform and an excellent social discussion site. Reddit was introduced by “Steve Huffman” and “Alexis Ohanian” in 2005. It has become a popular destination for discussing various topics such as gaming, politics, technology, celebrity gossip and more. It has gained popularity in the year 2008 for online content rating. 

Back in September 2011, Reddit became a subsidiary of “Advance Publication”. It is one of the leading media companies in the United States. After one year, Reddit has become a successful independent business with Advance because of the largest shares.

According to Reddit founders, the platform is the one-stop destination to know everything about the latest and popular things on the internet. Whether the news is related to the latest mobile launch of an Apple or best sports player. Everything is covered under the Reddit platform. Simply put, Reddit is a community where millions of people discuss specific topics. Users can post, vote or interact on everything that is existing and interesting around the world.

Enough said!!! Let’s discuss Reddit’s business model, How does Reddit work and make money.

Reddit Business Model

Just like popular social media platforms such as Facebook and Twitter, Reddit is making good income through advertising. Later, Reddit has introduced various business segments such as premium membership, Reddit gifts and Reddit coins to earn extra cash.

How does Reddit Work?

It’s no surprise that viral, interesting and latest news or information on the internet is available on Reddit. The website is created in a strategic way therefore individual discussions are conducted according to the specific topic. For example, if users are discussing the latest technology in the market, these users are grouped together individually, these are called “Subreddits”. It has dedicated webpage, subscribers and moderators. Here these communities are created by any person. The person is responsible for the post content. They can include text, images, audio, graphics, links and videos. Also, they can even comment on other posts and vote the posts according to their interest. 

Creating a Reddit account is simple and easy. It means, becoming a Redditor does not require additional skills or take much time to get started. Since Reddit has millions of subreddits, the platform could be the best place to interact or vote on any topic. The platform has a good number of loyal followers and a wide range of user base. Millions of people spend their quality time on constantly browsing through Reddit never-ending posts. 

Reddit is the ever-growing community available online. There are millions of posts, links, videos, images and other content posted on the Reddit website every day. “The community of the people and by the people”, the posts that get more votes will be displayed on the top of the webpage. Also, Reddit displays the new content to stay up to date with the latest news.

How does Reddit Make Money?

As mentioned earlier, Reddit is earning money by displaying advertisements. There are other business segments that are generating good profits for Reddit. Let’s discuss them.

Advertisements

Reddit is the open destination for the advertisers who are planning to spend their quality time on research. At Reddit, an advertiser can display their ads according to their choice. They can display on the home page, target page on a subreddit as the sponsored link. Reddit is making an income by displaying these advertisements.

Reddit is selling its advertisement space from 2019 onwards. Currently, there are two advertisement ways

  • Managed ads
  • Self-serve ads

The advertiser needs to pay $30,000 on managed ads. The self-serve ad cost is starting from $5 per CPM. 

The price may vary from $5 and $0.75 per 1000 page-views. This can exceed $20,000 according to the number of page-views. Simply put, the higher the page-views the higher the income. On the other hand, Reddit is earning income by serving Google AdSense ads on the sidebar. According to analysis, Reddit has earned over $100 million annual revenue through displaying ads in 2020.

Premium Membership

Premium membership is popularly called as Reddit Premium. It is the subscription membership plan. Get subscribed to this program and enjoy extraordinary benefits.

  • Reddit is offering
  • Ads-free experience
  • Get Reddit coins every month
  • Gain access to the exclusive community
  • Premium badge on your account

Reddit Premium subscription plan is available at $49.99 per year. The monthly plan is available at $5.99. The premium plan is offering eye-catching features such as 1000 coins as a sign-up gift, ads-free experience and 700 coins every month.

The amazing advantage of choosing Reddit Premium is getting “Coins” every month. These coins are used to show appreciation in terms of the award.

Reddit Gold

If you’re a regular user of Reddit then you might have noticed the platform is offering an excellent feature i.e Reddit Gold. It is also a premium membership program available for Reddit users either to purchase coins or gift them to others. Many businesses are choosing Reddit Gold to reward users for participating and engaging in their campaign.

Reddit Gold is an amazing option to improve Reddit experience. As the membership program is providing extra benefits such as

  • Turn off ads
  • More comments
  • Access to private subreddit
  • Categorizing comments
  • Save the comment
  • Gain access to custom themes

The Reddit Gold plan is available at $3.99/month and $29.99/year.

Reddit Coins

Coins are Reddit virtual good!!! When you like a post, you can reward by giving Reddit Coins. There are three types of coins available on Reddit – Silver, Gold and Platinum.

Giving an Award is one of the ways to show appreciation for their contribution. People can award just by clicking on the button “Give Award”. The option is available below the post.

If you’re a Reddit Premium member, you will get 700 coins per month, but sometimes these coins might not be sufficient. Therefore you can purchase Reddit Coins whenever required.

  • Silver award – $0.4
  • Gold award – $1.99
  • Platinum award – $5.99

Keep a note, you cannot transfer these coins to other Reddit users. All you have to do is reward them the coins.

Reddit Gifts

Who doesn’t love to send or receive the gifts? Whether you’re an adult or teen, gifts could be the most exciting thing for you.

Have you ever heard about Reddit Gifts? Of Course YES. It started in 2009 by introducing the “Secret Santa” program around the world. Reddit Gifts is an excellent exchange event for gifts. Here people can randomly match by Reddit. When people have identified a common factor, they can exchange the gift with one another on a special day.

  • Signup and get matched
  • Give the perfect gift
  • Receive your Secret Santa gift

However, Reddit will not charge anything from its users. Registration is completely free. Millions of people are getting registered and exchanging gifts. Reddit Gifts is the freemium service. But Reddit is offering a premium membership program for the Reddit Gift members. The elite users of Reddit Gifts are considered as Reddit Gifts Elves. Reddit Gifts premium plan starts from $3 per month. 

Reddit Products

Did you know Reddit is making money by selling products? Yes!!! Millions of users are buying branded products from Reddit. The website is selling high-quality t-shirts, stickers and more.

Wrapping up

Reddit was introduced by two college friends “Steve Huffman” and “Alexis Ohanian” in 2005. The platform is the one-stop destination for the learners. Reddit is the best place for endless conversations, real human connections and more. No matter whether you’re looking for breaking news or the latest technology in the market, Reddit is the home for you. Over millions of users across the globe are performing various activities such as post, comment and vote in Reddit communities. Reddit has earned over $100 millions in annual revenue in 2020. The new aggregation website is making a good income from various business segments. It includes advertisements, Reddit gold, premium plan, Reddit coins, Reddit products and Reddit gifts.

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