Mosseri explains that the loss of quality is not critical, and if a video becomes popular again, its quality is improved.
“In general, we want to show the highest-quality video we can. But if something isn’t watched for a long time — because the vast majority of views are in the beginning — we will move to a lower quality video. If the video later spikes in popularity again, then we will re-render the higher quality video,” Mosseri said.
Later in the thread, answering the question of whether such a system has an impact on smaller creators, he wrote that video quality matters more to the creators themselves than to the viewers.
“The quality shift doesn’t seem to matter much in practice as it isn’t huge and viewers appear to care more about video content over quality. Quality seems to be much more important to the original creator, who is more likely to delete the video if it looks poor, than to their viewers,” explains the CEO of Instagram.