Reddit Reintroduces Award Program: What It Could Mean For Future Monetization Prospects

Zinger Key Points
  • Reddit reintroduces its award system which was previously ended by the company in 2023.
  • Many users have been upset with Reddit's handling of the situation among other management decisions.

Reddit Inc RDDT, a retail investor favorite, has performed well since its IPO in March. The company has never turned a profit, and as Reddit continually looks to monetize its platform, a change in its award program could be a sign the company is looking at other ways to improve the platform.

What Happened: The company will relaunch its award program, according to a post on Wednesday by the Reddit Product Team. The system allows users to buy awards to financially support original content posters; a portion of the proceeds goes to Reddit.

Originally, the company sunsetted the program in 2023 in an attempt to reduce clutter. In the updated iteration, users bought “golden upvoted” directly using cash instead of using “coins” as an intermediary.

“While the golden upvote was certainly simpler in theory, in practice, it missed the mark,” the announcement said. “It wasn't as fun or expressive as legacy awards, and it was unclear how it benefited the recipient.”

The awards will be disabled in subreddits related to trauma and addiction support subreddits.

Now Read: Is The New Meme Stock Rally Led By GME, AMC A Repeat Of 2021? Vanda Research Says No: ‘Chances We Reach That Stage Are Low’

Why it Matters: Redditors were previously not happy about the program’s end.

“In other words, you’re removing a popular feature and charging the same amount for premium. I’m so glad that this is the ‘problem’ Reddit is diligently working to solve instead of the myriad of other issues,” commented one user under the 2023 announcement post.

A quick read-through of the more recent update showed Redditors were still upset with Reddit’s management of the situation. It remains yet to be seen whether the program will result in an increase in revenue for the company.

RDDT Price Action: Reddit traded at $57.12, down 4.48% on Wednesday at the time of publication

Also Read: Shifting Gears: Tesla, Rivian Accelerate In EV Market, Lucid Hits A Bump

Photo: Ink Drop/Shutterstock

Market News and Data brought to you by Benzinga APIs
Posted In: EquitiesNewsSocial MediaMoversMeme StockmonetizationRedditRetail InvestorsStories That Matter
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!