Google is making money hosting these videos, and users are freely uploading them. A competitor would have to scrape/download them, store them, process them all at their own cost, along with having much less metadata available (Which videos are most viewed, which segments, what do people repeat, what do people skip, what do people watch after this video, which video generates the most ad revenue, etc.)
This isn't certain. Google do not break out Youtube revenues nor costs. Hosting this amount of videos, globally, redundantly, the vast majority of which are basically never watched, cannot be cheap.
It's entirely plausible that Google's wider benefit from Youtube (such as training video generation algorithms and better behaviour tracking for better targeted ads across the internet) are enough to compensate for Youtube in particular losing money.
