@johnpowell YouTube scales by not doing things it doesn’t need to. At most a video needs to be encoded at upload and then into separate files for different resolutions. After that it’s just serving streams- a matter of network bandwidth, not CPU. If you have the storage and network bandwidth to stream 10,000 videos concurrently, you might have enough cycles to encode 100 videos left over :)
Also, your $40 a month server might be better than my (old) computer, but I had the use of the whole thing. If you are getting dedicated hosting on a machine like that for $40 a month, then I’d like to know where! I feel sure you’re on either shared hosting or (hopefully) a VPS.