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The bigger issue is monetization. YouTube is popular in no small part because creators are trying to make money.
There’s plenty of room for creators who don’t want monetization or can monetize things themselves by utilizing product placements (if the platform were popular enough).
The biggest problem is federation (or lack thereof). I’ve looked at A LOT of instances, and most of them either don’t federate at all, or only federate with a handful of other instances, as opposed to Lemmy or Mastodon that federate with thousands of others…
This means it is deeply segregated and discoverability is virtually nada, not to mention the default algorithms are completely useless and uneditable.
This is all true, but they would still have to say goodbye to the ad revenue from YouTube. However little that might be.