I know (believe me, I know) that bandwidth is expensive, but I'm also pretty sure YouTube's margins leave plenty of room for competitors to come in with less-effective monetization schemes and still turn a profit. There's no reason a host couldn't put ads on videos hosted under some kind of free tier, after all. I'm quite sure we wouldn't end up with no free hosting. Worst case, I think it'd tend to be quality capped to SD-quality or something, and that's worst-case.
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