YouTube's Bandwidth Bill Is Zero. Welcome to the New Net (2009)

How does this pair with Netflix's announcement that they're slowing down their streaming in the EU?

Something I've thought about is that Netflix gets paid a single subscription fee, and in return they have to provide unlimited video streaming for a month. There is no incentive to keep you watching other to make sure you stay interested enough in subscribing again for the next month.

Youtube, on the other hand, gets paid for every video you watch through advertisements. There's no limit on how much profit that can be made from a user in a given month, and so there is a heavy incentive to get you to watch as much content as possible, as there's no cap on the maximum profit possible.

"Google's traffic is approaching 10 percent of the net's traffic, and that it's got so much fiber optic cable, it is simply trading traffic, with no payment involved, with the net's largest ISPs."

Clever, so it really isn't free, it's like they bought an ISP and are spending all it's revenue on the cost of bandwith.