Reddit is tightening control over its public data, emphasizing that any entity wanting to utilize this information must strike a formal deal with the company, CEO Steve Huffman revealed on Wednesday.
Why It Matters
Publicly available data is critical for developing advanced AI technologies like ChatGPT and Claude. Reddit's move aims to ensure fair compensation and control over the use of its vast user-generated content.
The Big Picture
Platforms and publishers hosting significant amounts of content are rapidly implementing measures to prevent unauthorized data extraction without proper compensation, as Axios' Sara Fischer highlighted.
Key Developments
Reddit introduced its first-ever Public Content Policy on Thursday, setting clear guidelines on how external entities can access and utilize its user-generated content, particularly for AI and commercial purposes.
- Open Internet Stance: While Reddit supports an open internet, it opposes the misuse of public content.
- Policy Statement: "Reddit believes in an open internet, but not the misuse of public content," the new policy states.
CEO's Perspective
Huffman emphasized that commercial entities should pay for data access through tailored agreements, similar to mergers and acquisitions.
- Conditions for Use: Businesses must agree not to use Reddit data to create competing platforms, perform background checks, archive deleted content, or train AI systems that generate spam.
- Researcher Access: Free access might be granted to researchers or platforms like the Internet Archive but with specific restrictions.
Strategic Outlook
Reddit is open to its content being used for AI training, provided it is under clearly defined terms.
Collaborative Partnerships: We're only entering agreements with people we believe will be collaborative partners," Huffman said.
Ethical Concerns
Huffman hinted at unethical data practices by unnamed entities and expressed a willingness to disclose these actors to the FTC in the future.
- Future Disclosure: "I look forward to that day. ... And I will happily tell our friends of the FTC who those people are."
Broader Implications
Reddit's proactive stance makes it one of the first major social platforms to explicitly address the derivative use of its user-generated content.
- Message to Stakeholders: This policy serves as a clear signal to businesses and users regarding the responsible use of Reddit's data in the evolving AI landscape.
Revenue Insights
Huffman doesn't foresee this becoming Reddit's primary revenue stream despite the focus on data agreements.
- Revenue Growth: In its inaugural earnings report as a publicly traded entity, Reddit reported a 39% year-over-year increase in advertising revenue, totalling $222.7 million, constituting 92% of its total revenue.
- Data Revenue: The commercial data category, previously minimal, surged to $20 million in Q1, noted Huffman.
Conclusion
Reddit's new policy on data use sets a precedent for balancing open access with ethical and commercial considerations. It aims to protect its content while fostering beneficial collaborations in the AI and tech industries.