Youtube's algorithm will always favour the already popular?

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Seems like it, which to me really seems to be a harbinger of its future possible death, as if those people suddenly stop posting and the algorithm only promotes their content, then in the end everyone leaves if nothing is new and what is new isn't seen...

YouTube's suggestion algorithms are definitely a mystery.

Within the last several years there have been periods where something I haven't been able to determine led it to flood me with suggestions for; boxing, hiphop, horror movies, and more that I do not have and have never had an interest in.

One thing I do have an interest in is trains, and there is a YouTube channel named Virtual Railfan which has live feeds from a number of locations.
Its YT pages allow chat and it is almost daily that someone from somewhere around the planet comes in to chat saying, "Why am I here, why did YouTube suggest this to me? I'm not in to trains, have never watched a train video."

The chat moderators have even tried to find out the why of it, and the thing has even happened to them on their own YT viewing.

All they had been able to come up with, the last time I noticed commentary on it, was that it happens and it is a mystery.

For my videos it's more clearly straightforward: never recommend.

The ways of The Algorithm are mysterious and ever-changing. Even successful pro YouTubers complain of being suddenly abandoned by it and having to figure out what to change to get recommended again. There are also complaints that it favours people with a large output, boosting creators who can churn out vast quantities of generic "content" and excluding creators who do more labour-intensive, high quality work and so can't post as often.

When YouTube is good, nothing -- not the theater, not the magazines, nor the newssites -- nothing is better.

But when YouTube is bad, nothing is worse.  I invite each of you to sit down in front of your favorite monitor and stay there, for a full 24-hour day, watching YouTube video after YouTube video, without a book, without a magazine, without a newsfeed, or a video game to distract you.  Keep your eyes glued to that monitor until you pass out.  I can assure you that what you will observe is the vast wasteland that is YouTube.

You will see a procession of television re-runs, shaky and out-of-focus pirated movies with poor audio, self-important influencers, comedies featuring unbelievably stupid people performing unbelievably stupid stunts, violence, cat videos, dog videos, hamster videos, violent newsreel footage, stupid criminals getting caught, stupider cops getting caught, people falling off skateboards, people setting themselves on fire, et cetera, ad nauseum, and a seemingly endless supply of ignorant and delusional conspiracy theorists -- many cajoling, offending, and screaming incoherently.  But most of all, boredom.  True, you will see a few things you will enjoy.  But they will be very, very few.  And if you think I exaggerate, I only ask you to try it.

You will see.

I get hooked on it sometimes, and find myself glued to videos not much better than what you describe for several hours straight. But other times, I go "I'm bored, let's watch some YouTube".... and I cannot find anything on there I can face watching more than 30 seconds of.

Yep.
Not only YouTube, but basically every other platform out there.