Reddit is preparing to ask visitors to log in. On its third-quarter earnings call on Wednesday, October 29, the company said it will move mainly toward a logged-in experience, a major change for a site that has long let anyone read its posts without an account. TechCrunch, Engadget and 9to5Google all reported the plan.
What is changing. Reddit will test the logged-in-only model in select markets outside the US in the fourth quarter, and it has no timeline for a worldwide rollout, according to TechCrunch. CEO Steve Huffman said the company is still working out exactly when logged-out visitors would see a hard prompt to sign in. Reddit says logging in does not mean giving up anonymity, and that its incognito browsing mode is being rebuilt.
Why Reddit is doing it. The company points to two reasons. The first is data protection. Reddit says it wants to guard its content against AI scraping and strengthen its hand in licensing deals with AI model providers. Huffman was quoted as saying that most unauthorized access to Reddit’s data happens through logged-out visits. The second is money. Reddit says logged-in users account for more than 80% of its monetization, and they give the company more data for ad targeting and personalization.
The traffic problem. Reddit said search referrals fell by more than 1 million per week on average in October, and Huffman blamed Google’s AI search features, saying AI Mode does not send traffic to Reddit or to others. The company warned that if the trend continues, daily active users could fall by a low double-digit percentage in the fourth quarter. A decline in referrals matters because search has been a main way new visitors find Reddit threads.
The numbers behind it. TechCrunch reports that global daily active users were flat from the previous quarter at 130.3 million, while US daily active users fell from 53.2 million to 50.7 million and were down 2% from a year earlier. Revenue still rose 53% to $895 million, above analyst expectations of about $875 million, and net income rose 74% to $283 million. Advertising revenue grew 54%, and non-advertising revenue, which includes AI data licensing, grew 35% to $48 million. Reports citing Reuters said Reddit’s shares fell about 18% in extended trading after the warning, a figure TechCrunch’s article did not include.
Why it matters. Reddit’s position shows a wider shift in how people find information. If AI answers in search keep people from clicking through, sites that rely on search visitors have to build direct relationships, and a log-in requirement is one way to do that. It also changes who can read the site without an account. Researchers, journalists and casual readers who reach Reddit through search may find a sign-in wall instead, and that raises a question about the open web that Reddit has not yet answered.
What to watch. Look for which markets get the first tests, how the hard sign-in prompt works, whether Reddit’s search referrals recover, and how the company’s data licensing business develops as it tightens access.
Sources: TechCrunch, Engadget and 9to5Google. Figures are as reported by Reddit and those outlets.
Social media app icons on a smartphone screen (representative image), Wikimedia Commons, CC BY 2.0
