Reddit is preparing to require all users to create an account and log in to access the platform, a move confirmed by CEO Steve Huffman in a letter to shareholders released on Friday. The shift marks a significant change in how the social media giant operates, aiming to secure user data and improve advertising metrics as organic search traffic declines.
Declining Search Referrals Drive Policy Change
Huffman highlighted a sharp drop in Reddit’s visibility through search engines as a primary catalyst for the new strategy. In the third quarter, search referral traffic “was down meaningfully,” according to the letter. The decline was most pronounced among logged-out users and web visitors, a trend that has persisted into the fourth quarter.
Data provided by Huffman indicates that search referrals dropped by more than 1 million per week on average during October. If this rate of decline continues, the company projects that daily active unique users (DAUqs) could fall in the low-double-digit percentage range from the current base of 130 million DAUqs. This potential drop contrasts with a 12 percent year-over-year increase in DAUqs during Q3.
The CEO noted that “logged-in and app DAUq are our most valuable users,” and the company intends to focus its efforts on retaining and engaging this specific demographic. By requiring login, Reddit aims to reduce its dependence on external search engines and encourage users to engage directly with the platform.
Testing Begins in Non-US Markets
Reddit will begin testing the logged-in-only requirement in select non-US markets during the fourth quarter. Huffman stated that the company will use these initial tests to determine the final structure of the experience before rolling it out globally. He compared the move to transitions made by other major ad-based platforms, noting that the company is “moving quickly” to become a “direct daily habit for every Internet user.”
This announcement follows a series of changes implemented over the past year to consolidate user activity on Reddit’s official apps and website. Earlier this year, the company began testing a requirement for mobile web users to open the official app. Huffman noted that only about 13 percent of eligible mobile web users currently see the conversion prompt, indicating room for expansion.
Additionally, Reddit has tightened access to its legacy interface. As of July, users must be logged in to use Old.Reddit.com. More recently, the company blocked access to Old Reddit for users who have not logged in within the previous six months. These measures, combined with the 2024 decision to make third-party API access expensive, effectively shuttered most third-party applications.
Financial Performance and Data Protection
The strategic shift comes as Reddit reports strong financial results for the third quarter. The company posted a net income of $283 million, a 74 percent increase year over year, driven by $895 million in revenue, which rose 53 percent compared to the same period last year.
Huffman explained that the logged-in-only model will provide more signals for ad targeting, leading to higher engagement and better insights for advertisers. He also emphasized that requiring login helps protect Reddit’s “extremely valuable corpus of data” and allows the company to better adapt to emerging regulations worldwide.
Advance Publications, which owns Condé Nast, remains the largest shareholder in Reddit. The company has not yet specified a global launch date for the mandatory login requirement, stating that the current testing phase will inform the final rollout plan.
Source: Ars Technica
