If you can recommend an ad blocker for it on Xbox, I might try it, though I generally don't like to stiff content creators.
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https://www.windowscentral.com/how-block-ads-and-trackers-xbox
However, I would recommend using a cheaper, Android-based STB and sideloading an app called "
Smart Tube Next". Once you've got that, you can watch most, if not all YouTube videos, without a single ad. It even blocks sponsors, spammy intros to videos, end sections (basically all the parts of the video that aren't actually the bit you want to see), plus there aren't any ads in the menus, etc either.
If you've got a regular Android phone, you could sideload the discontinued (but still working) "
Vanced" app. First, you download the "Vanced Manager" (which can then be used to download a few apps that work together, including the main Vanced app and another app that includes the "framework" of permissions and IDs that the main app needs in order to access YouTube/Google servers, etc).
Once either app is installed, just go to the settings and have an easy tinker to block ads. You could then try to cast your phone to your Xbox if you really wanted to, but most cheap Android boxes cost around 30-50 dollars these days so it's probably easier that way.
I think that both apps night also allow you to whitelist certain channels to allow ads too, but you'd need to check that.