I would say the problem is that the user base are low value users. They're the sort of people who will do a mass protest because one for-profit company wants to charge another for-profit company money. Advertisers don't want to advertise to them, seriously. Any other company with a different user base with that amount of users and traffic would be making a billion a year easily. Probably multiple billions. But Reddit users are low value. There the sort of people if a company tries to engage with them with just be hostile. This means the amount of money Reddit can charge for ads isn't that high. Which means the companies advertising on Reddit are generally on the lower end of the scale or it's just a tiny part of a bigger ad campaign.
So if ad revenue isn't going to do it. Then it needs to be a freemium model with subscriptions. They probably get 25% of their revenue from reddit premium. That also means, charging for the API.
The problem for many of the third party apps is they've also been running a freemium model with very low overheads due to the fact Reddit has been largely funding their freemium model. They've been charging next to nothing for their premium options ($1.50 a month) and they have massive amount of very active users. They're so big that paying a reasonable per API request fee results in a massive bill. A bill they can't pay due to a freemium model and super low fees that don't pay for the freemium users. Third party apps directly compete with Reddit, therefore it's fair they pay Reddit for the resources they use as well as the lost potential of the users they did take. Those paying for premium on an app would probably pay premium on Reddit.
Then comes in the low value users, who are outraged the free toy they have wants to make a profit. "It's too much money" - funny enough Reddit users think they're worthless - was one of the main cries. "This third party app IS REDDIT" - well if they're Reddit they shouldn't need Reddit access. A userbase who resists being monetised. Either they're monetisable or they're not. If they're not the company can't survive. What the Reddit users need/want is a non-profit.
The vast majority of users on any platform are passive consumers, they are valuable only as long as they keep scrolling and viewing ads. The ultra tiny minority of users that are valuable to the platform 24/7 are the ones that consistently submit links, generate original content or post comments that bring in a lot of the passive users. The high value users will only leave when they loose the ability to upload to, and interact with, their favorite communities.
High value users are a completely different demographic.
Realistically, there are a large amount of people who don't care about the protests. They're going to be creating content. I wouldn't be surprised if the people most outraged are the ones who don't even comment that often.
You're not wrong: reddit probably needs to raise their income, which means monetising their users more.
The biggest issue most vocal users (including many mods and developers of third party apps like Apollo) have, is that the prices are much higher then the expections reddit set beforehand and that everything was only communicated 30 days in advance.
If reddit wanted to keep third party apps, but have them pay for the users use of reddit, they could have implemented a transition plan. Or make it work another way. Or charge a realistic amount (you yourself state reddit's users are low value, but reddits is asking for $20 million per year in missed monetisation just for Apollo's users, which is very high value).
Instead, reddit seems to approach this aggressively, signalling through their actions that they intend to kill off all third party apps. That's what the the subs going dark are protesting against. Especially since reddit's own site and app are of significant lower quality.
I'm not sure how to read your message exactly. If you mean the teenage warez leecher type who doesn't care about wider ramifications for the ecosystem, then sure, not high value. I would hesitate to put the protesters in this category wholesale.
Otherwise wealth correlates somehow with both caring about your interests, and caring about abstract causes, for different reasons and often not in the same people. This is why 1) businesses catering to affluent people are often more cautious about the cheapest tactics (even if they ultimately go for the same results), 2) there is so much public faux political idealism from companies.
So if ad revenue isn't going to do it. Then it needs to be a freemium model with subscriptions. They probably get 25% of their revenue from reddit premium. That also means, charging for the API.
The problem for many of the third party apps is they've also been running a freemium model with very low overheads due to the fact Reddit has been largely funding their freemium model. They've been charging next to nothing for their premium options ($1.50 a month) and they have massive amount of very active users. They're so big that paying a reasonable per API request fee results in a massive bill. A bill they can't pay due to a freemium model and super low fees that don't pay for the freemium users. Third party apps directly compete with Reddit, therefore it's fair they pay Reddit for the resources they use as well as the lost potential of the users they did take. Those paying for premium on an app would probably pay premium on Reddit.
Then comes in the low value users, who are outraged the free toy they have wants to make a profit. "It's too much money" - funny enough Reddit users think they're worthless - was one of the main cries. "This third party app IS REDDIT" - well if they're Reddit they shouldn't need Reddit access. A userbase who resists being monetised. Either they're monetisable or they're not. If they're not the company can't survive. What the Reddit users need/want is a non-profit.