...when you have to make new peering agreements, build new pipes or create special infrastructure just for one content provider that doesn't pay you a cent...
An ISP can upgrade their equipment for free to receive YouTube traffic via peering or they can upgrade their equipment and pay for transit to receive the same traffic. Given that the traffic is going to be received anyway, peering is by far the cheapest way to accept it.
And if we imagine a world where there were 100 niche video sites instead of YouTube, the total bandwidth would probably be the same but ISPs would be paying for transit to receive it. Google and Netflix's economies of scale benefit ISPs as well.
An ISP can upgrade their equipment for free to receive YouTube traffic via peering or they can upgrade their equipment and pay for transit to receive the same traffic. Given that the traffic is going to be received anyway, peering is by far the cheapest way to accept it.
And if we imagine a world where there were 100 niche video sites instead of YouTube, the total bandwidth would probably be the same but ISPs would be paying for transit to receive it. Google and Netflix's economies of scale benefit ISPs as well.