This will keep costs down but I am not sure cost of transcoding is the major barrier to entry? I think the network effect (everyone is on YouTube) had already made disruption pretty difficult!
Things like youtube run on super-thin margins. Bandwidth and storage costs are massive, compute costs quite big, and ad revenue really quite low.
A competitor would need either a different model to keep costs low (limit video length/quality, the vimeo model of forcing creators to pay, or go for the netflix-like model of having a very limited library), or very deep pockets to run at a loss until they reach youtube-scale.
I'm still mystified how tiktok apparently manage to turn a profit. I have a feeling they are using the 'deep pockets' approach, although the short video format might also bring in more ad revenue per hour of video stored/transcoded/served.
