I was there when YouTube became a thing, and I was running a music video-hosting website that I had built myself (on top of phpBB, even). We were encoding videos in Windows Media and RealPlayer formats.
There were LOTS of funded competitors to YouTube between 2006 and 2009, including Viddler (who paid Gary Vaynerchuk a small fortune to host his WineLibraryTV show there exclusively), DailyMotion (which is still alive today, although no longer a threatening contender), etc.
In 2009 I had a coaching business and was buying marketing courses and software which would deploy your videos across 40+ different video websites (including Google Video which was a separate thing until they acquired YouTube and merged those), and YouTube wasn't yet amounting to 50% of our video traffic.
I think you might be mistaken with the bold statement above.
