Digg rival Reddit gives Freemium model a whirl

Reddit, a social news aggregation site like Digg — with a smaller but seriously loyal audience — has decided to turn its week-long donation drive into a formal business model by launching Reddit Gold, a premium membership that includes new privileges.

The site, gobbled up by publishing empire Conde Nast (of Vogue and Vanity Fair fame) in 2006, has been unable to convince its owners to funnel more money into the company to support its staff and expanding number of servers. As a result, it called for donations, and unsurprisingly — considering how tight-knit the Reddit community has become — 9,000 people responded.

This success proved that the site has a following that is willing to pay for the service, especially if they are compensated with cool new features and privileges. So now, instead of donating whatever you feel like to fend off Reddit downtime, you can choose to upgrade to a Reddit Gold membership for $3.99 a month or $29.99 a year (if you sign up now).

The 9,000 Redditers who already donated will get their membership fees prorated to $2.49 a month, and two free months of service.

So what does Reddit Gold actually give you?

  • You can choose to get rid of all of the ads and sponsored links on the site.
  • You can more easily keep track of your friends and what they are posting to the site.
  • You can append notes to your friends’ screen names to more easily remember why you like them and how long they have been your friend. All you have to do is hover over their screen names to see these notes.
  • Sortable user pages so that you can see which of your posts to the site got the most comments, or the most upvotes. You can even see which of your comments got the highest ratings and most replies.
  • A lifetime pass to, as the site puts it, “any secret members-only clubhouse that may or may not exist.”
  • One more as-yet-unannounced benefit.

Reddit claims it has 8 million unique monthly visitors and gets 400 million monthly page views, but third-party traffic measurement sites like Compete, Quantcast and even Google Analytics show much smaller numbers, which has hobbled the site’s advertising revenue.

Considering its user base, Reddit may be the perfect environment for a Freemium model to take off. But it’s interesting that a company like Conde Nast, which is essentially seeing its print ad revenue in free fall, would refuse to prioritize one of its more innovative web portals — one with a built-in audience that seems pretty committed.


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