> The system is so inefficient that it finances almost the complete operation of Alphabet/Google.
Since Youtube is wildly unprofitable, Alphabet/Google has to be funneling in money generated from other sources. Thus, Youtube is funded by ads, just mostly not from the ads on Youtube.
It was mentioned in a private email that the only reason YouTube exists is that Google's servers happens to have a lot of free disk space in the days before SSDs.
Since Youtube is wildly unprofitable, Alphabet/Google has to be funneling in money generated from other sources. Thus, Youtube is funded by ads, just mostly not from the ads on Youtube.