Playlists are usually treated as tidy shelving for a channel. Their real effect is on what happens after a video ends, which changes where the channel's traffic originates.
The end of a video is a decision point
When a video finishes, something must play next, and by default that choice is made by recommendation from the entire platform rather than from the channel.
A viewer inside a playlist has that decision made differently. The next item is the next entry in the sequence, which keeps the session inside the channel rather than releasing it.
Across many viewers this converts a share of exits into continuations, and continuation is the mechanism by which a channel accumulates watch time faster than its individual videos suggest.
Ordering carries more weight than membership
A playlist is a sequence, not a folder, and the order determines what follows what. Placing the strongest entry point first is less important than choosing what plays after it.
The second position does the most work, because it receives viewers who have already committed and is the item that establishes whether the sequence is worth continuing.
Sequences built in publication order often perform poorly for this reason, since the earliest videos are usually the weakest and sit exactly where a newcomer arrives.
Playlists surface as results in their own right
A playlist has a title and description and can be returned by search independently of the videos inside it, which gives a channel a second kind of entry point.
These entries tend to match broader queries than individual videos, because a viewer looking for a whole subject rather than one answer is well served by an ordered set.
That broader match is why a playlist can attract viewers who would not have found any single video within it, and why naming it as a subject rather than a label matters.
Older videos are the main beneficiaries
Individual recommendation favours recent material, so a channel's archive receives progressively less distribution regardless of quality.
Placing older videos into sequences alongside current ones restores a path to them, because continuation ignores publication date and simply follows the order given.
Where playlists actively hurt
Grouping loosely related videos produces sequences viewers abandon quickly, and a set that is consistently exited early is worse than no set at all.
Very long playlists have a similar problem. A sequence that clearly cannot be finished discourages entry, and a shorter, coherent run is usually completed by more people.