Make the ads less awful is one way. Figure out a better way to analyze the video so you can put the ads in reasonable places, or let the uploader specify ad breaks. Limit the length of ads. Prevent repetitive ads within a certain timespan. Let users block particular advertisers. If the ad experience wasn’t so terrible, I wouldn’t block them.
Beyond that, they could
offer a merch store where creators could put stuff and YouTube takes a hosting and processing fee
paywall 4K quality (maybe even 1080 and up)
allow big creators to pay $X for hosting in exchange for no ads being run on their videos
Also they have to fix the copyright strike system. They could even make money off of it by charging claimants for copyright claims and holding the money in escrow until the review is completed, with that money going to YouTube if the claim turns out to be fraudulent or being refunded if it’s legit.