> If VP9 is just 5% better, bandwidth saving itself for YouTube will be substantial
You should look at this from a business perspective: how substantial would those savings need to be to justify a billion-dollar scale investment?
VP9 codec development alone has been expensive and that's not even including the significant hardware engineering costs needed to make it competitive with the MPEG group's standards on all but the highest-end desktop computers.
Meanwhile, H.264 is a mature, widely-adopted technology and H.265 is following the same path (http://en.wikipedia.org/wiki/High_Efficiency_Video_Coding_im...) with many implementations announced.
YouTube makes money from people watching video, not from sales of any particular video codec. They're already using H.264 for everything and will need to add H.265 support for the same reason.
So if we look at this from the perspective of a business manager:
1. Make a significant investment making VP9 appealing enough to produce the widespread adoption needed to see significant bandwidth savings.
2. Use the same MPEG codecs for all visitors – dropping support for interoperability with Apple, Microsoft, etc. isn't likely so they're going to need an H.265 path either way. This has no significant upfront costs because they can use the same tools as everyone else and get the same bandwidth savings.
From that perspective, the question is really whether the HEVC license fees are going to be higher than the cost of funding VP9. There's some intangible value in having an alternative if the MPEG group gets greedy and it might help them negotiate more favorable rates, too, but I'm pretty sure none of that is enough to confidently say that Google's senior management won't consider cutting it the next time they need the right news for Wall Street.