So you're watching sportsball, and your team wins. The stadium fills with confetti, and the broadcast starts to look like total crap. Why does confetti make the players on your expensive TV look like Minecraft characters? The answer lies in the nature of digital video compression. As Tom Scott explains, 99 times out of 100, the videos you've watched online or on TV are compressed, even if it's HD or 4K or whatever else. That's not a bad thing! Compression makes files much, much smaller — as anyone who's edited raw video can attest. Compression is why we can have hundreds of channels to watch, and why streaming works at all. And the various methods for video compression are really, really smart.
To massively oversimplify the process, a raw video has specific instructions for every pixel in every frame of a video, while compressed video finds ways to simplify those instructions by looking for patterns in the video. For instance, if the video has a blue background that never changes, instructions are written for it once and then simply told to repeat. This trick ends up saving huge amounts of space. The available bits are spent on things that move around, optimising quality towards the important stuff in the frame.
The problem with confetti — or snow for that matter — is that the algorithms that compress video have a difficult time making predictions about where each of those little scraps of paper are going. This starts to eat up all the available bits, eventually resulting in loss of quality. It's not a problem with uncompressed video, but trying to stream files of that size would feel like going back to the dial-up days.