Reddit CEO Asks Users To Buy Revamped Membership Because Ads Are “One Of The Reasons Digg Failed”

“We could theoretically load up our pages with ads and probably make enough to cover our costs. However, that would significantly degrade the experience of using the site,” said Reddit CEO Yishan Wong in a post asking users to “Invest in Gold” â€" the site’s newly enhanced subscription program. If people pay for ad-free Reddit and new Gold features like filter saving, the site won’t end up like Digg.

Wong started his post to the Reddit blog by saying the site was booming, bringing in 3.8 billion page views and 46 million unique visitors in October. Press from events like President Obama’s “Ask Me Anything” as well as scandals like the violentacrez doxxing have upped awareness of Reddit. But all that traffic comes at a cost.

Reddit’s CEO followed up his blog post by writing on a Reddit thread that “In theory advertising revenue should/could scale with traffic, but since we never tried very hard to sell our advertising inventory, we only run ads on a relatively small percentage of our pages and they do not cover our costs. When Obama comes to “chill on the weekends,” that increases costs, not revenue.”

So Reddit was faced with a choice. Put more ads on the site, or ask more users to pay. The former comes with some big trouble for a site that prides itself on freedom of expression. Wong writes:

“See, the problem is that if your site is funded primarily with advertising, then you are beholden to your advertisers. If your users choose to post something politically or culturally controversial, you come under editorial pressure from advertisers to remove or modify it…This eventually results in a watering down of the true, authentic content on the site (remember Sears?). It’s one of the reasons Digg failed.”

Instead, Wong says Reddit has chosen to beef up what comes in Gold membership, which runs for $4 a month or $30 a year. Reddit hadn’t been actively promoting the membership plan, but with the surge in popularity, it had to start. Here’s the new Gold features, some real, some…maybe real.

• An oft-requested feature: comment saving and filtering saves by subreddit
• Ability to give gold to other peoples’ comments you really like (we call it “gilding”)
• Some upgrades and fun stuff in the members-only lounge that may or may not exist
• We might add a remote-controlled office robot you can drive. Under construction.

The whole situation is quite similar to what’s been going on over at similarly controversial anonymity haven 4Chan. After years of squeaking by on minimal ad revenue, 4Chan’s founder Moot recently asked loyal users to purchase “4Chan Passes” that let them bypass the Captcha security feature when they post.

If Wong and Moot’s pleas work, Reddit and 4Chan can continue to thrive without having to bow to advertisers. If not, two beacons of Internet culture could become a little more like billboards and a little less like the wild west of the web.

Launched in 2005, Reddit is a social news website that displays news based on your personal preferences and what the community likes. Your preferences are determined based on your history of voting stories up or down. The company was started by two University of Virginia grads, Alexis Ohanian and Steve Huffman in the Y Combinator program. Two others, Christopher Slowe and Aaron Swartz, later joined the team. Conde Nast, owner of Wired and other magazines/websites, acquired Reddit in October of 2006....

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