YouTube began supporting HDR playback in late 2016, but there were not compatible smartphones to play back the HDR content. Since that time, the LG G6, Galaxy S8, Sony Xperia XZ Premium, LG V30 and Note 8 have all been released or announced with hardware-based HDR support. Now, it looks like last year's Pixel phones will be joining the party.
Android Police reports that the Pixel and Pixel XL now use software-based decoding in order to process HDR content, at least from YouTube. This leaves off other services like Netflix, which has been adding more and more HDR content lately.
Hardware-based decoding would perform better (and work with other services), but software-based decoding is a good way to support current devices. Android Police notes the next generation Pixel devices will include hardware-based HDR decoding, so those would presumably work with Netflix and other services. YouTube doesn't have a ton of HDR content, but there is a channel dedicated to HDR for those with the right hardware.
Have you tried YouTube HDR? Let us know down below!