I am relatively new to this point of view. Because I have neither participated nor created in any contest. But I will help you by giving an example with different views.
If you watch a running race, it has 8 lanes. No matter how many crores of players participate in the contest there will be 8 finalists and only 3 will end up on top. This doesn't mean that the remaining people who has participated in the contest are not the bad runners. But the point is at that particular second who is best.
Now coming to the second view Imagine you dont want to disappoint crores of people who has participated the race. But the organiser has to choose the best 3 and the Initial prize pool is already distributed for the best and the finalists. For those who are not the finalists they will also get travel allowances and participation certificates where so many factors involved. It depends on promotions, donations recieved, ads revenue and so on.
Now that you have two scenarios with different points of view. I guess you are the best to decide the right choice for you.
You may be new to this point of view @kcherukuri but I still appreciate your feedback.
YoursPiotr