Any data that you use on your computer (or other device, such as a tablet or mobile phone), which isn't actually stored on that device, is said to be 'in the cloud'.
For example, you can back up your photos so that they're stored on Google's servers on the other side of the world (either instead of, or as well as, on your own devices). Those photos are then said to be 'in the cloud'.
YouTube is actually a form of cloud storage for people's videos. So, when you watch a YouTube video, you're streaming data 'from the cloud', rather than downloading those videos to your computer (or other device).
Companies which rent or sell movies online are somewhat similar to YouTube, in that those movies are stored on their own servers. (i.e. 'in the cloud'). Anyone can stream those movies but, unlike watching stuff on YouTube, they have to pay to do so. Those who choose to 'rent' a movie are given access to the download for a limited time only (or possibly for one viewing only, depending upon how the company's system is structured), whereas those who choose to 'buy' it acquire unlimited access to it. However the movie file itself isn't downloaded to a user's computer (so it can't be stored on a memory stick or anywhere else). It remains on the hosting company's server (i.e. 'in the cloud') and can only be accessed via streaming it, in the same way that YouTube is accessed that way too.
(There are actually ways of downloading YouTube videos to a computer, so that they're stored there, as well as 'in the cloud' but they're technically illegal. Similarly, there are ways to use the streams from a movie sales site to create saveable files on a computer but they're generally far harder to use and most definitely illegal. Those sites need to prevent people from simply storing movies on memory stick, etc, in order to prevent video piracy, whereby just one person could pay for a download and then share it online with millions of others for nothing ).