This makes no sense. He seems to talking about the cost of having to store multiple formats. However, the only reason they have both WebM and H.264 is because they spent $100 million to acquire WebM. They could have simply not bought WebM, saved $100 million, and they would not have the storage problem.

It would make more sense if it is about the licensing cost of H.264, for the encoder they use and for their commercial streaming of H.264 video (does it count as commercial when they are not charging users for the video, but are monetizing the site with advertising?).

However, given the cap on annual license fees under the H.264 license, what they spent to acquire WebM would have covered their YouTube H.264 license fees through the remaining lifetime of the H.264 patents.