More premium users means fewer ad slots to sell. Which should drive up the price of each ad spot. Or, as you suggest, they can cram more ads in per video, and risk repelling the audience. I wonder what the equilibrium point is.

or until revenues drop because people either watch less or avoid buying from companies that pay money to ruin videos...

or you know, just don’t use the fucking platform. last time I loaded youtube … it’s been years