The issue is that he’s looking at baseline costs of $2.50 per month per user, just for the Reddit API. This doesn’t factor in other API call costs, server costs, etc. Add on other stuff, plus the 30% cut to Apple, and you’d need to charge somewhere in the range of $50-60 per year.
This is also assuming usage doesn’t change much. If usage changes dramatically, the costs can increase substantially, as it’s nearly 25 cents per 1000 API calls. He’d need to keep tabs on it, cut off high usage users on a regular basis, and likely go with a monthly (not annual) model and adjust prices frequently.
The other option is to just charge users per API request with a markup, meaning heavy users could easily be on the hook for $20 or $30 per month or more just for using Reddit.
Would have to be a variable month to month cost like you suggested. Some would pay nothing, but the heavy users would be an expensive monthly fee, or watch the numbers and find a middle ground. My guess is the Apollo users are on the high end of calls per month compared to the people not using Apollo.