This is a myth it seems to me. As far as I can tell, YouTube makes money. I'd be interested in sources that show otherwise, but not speculative sources.
Video needs huge amount of storage and network capacity.
Google is one few players, who don't need pay for their Internet, they change most of traffic by mutual settlement free peering.
If you go with making your own youtube, then you are seriosly disadvantaged by that.
Secondly, they can buy their disks directly from manufacturer, probably using bidding. So, even their storage costs are much lower, than you can hope.
>It generated $15 billion last year not including 20 million Premium subscribers.
To clarify, that $15 billion is revenue and not net income/profit. Since Alphabet Inc didn't reveal the internal costs for Youtube, it means we still don't know if Youtube is losing money, or breaking even, or making a profit. So the gp's question of "how do we know it's making money?" is still unanswered.
Another example to help differentiate revenue vs profit: Tesla "generated" $24 billion in revenue last year but it didn't "make money" because they still lost $862 million.[1] No profits.
It doesn't help that the journalist of your The Verge article further confuses readers by incorrectly using the phrase "bottom line" instead of the "top line".[2] Revenue is actually the "top line". Net income/profit is the "bottom line":
>, that the company has revealed how much money YouTube-hosted ads contribute to the search giant’s _bottom line_. On an annual basis, Google says YouTube generated $15 billion last year and contributed roughly 10 percent to all Google revenue.