YouTube is not a good service. It's traditionally been poorly designed and often redesigned in ways that just shift the shit around rather than actually fix people's problems. It's community is downright terrible and practically unmoderated. The only time they've actually attempted to fix that, they decided to institute the most heavy-handed policy possible by forcing a sign-up to another Google-owned social network that had a real name policy. But there's one very big issue that YouTube and it's users have had since the very beginning: copyright law.
From the beginning YouTube and traditional content owners have never gotten along well. Early incarnations of the site were havens for people to repost content they didn't own, much like Facebook's video platform is today. But the site was also popular enough to be valuable to social network marketeers. This led to some rather... hilarious instances where the legal arm of a TV network would take down videos posted by the marketing arm of their own company. Some TV networks decided to make their own competitor to YouTube, before reframing it as a Netflix competitor a few years down the road.
All of this culminated in a rather protracted copyright lawsuit against the company. It's important to keep in mind that, like all other online content providers, YouTube relies on the DMCA OCILLA notice-and-takedown procedure to provide safe harbor for their service. However, in Viacom's opinion, this wasn't good enough. And, in an uncharacteristic move of a Google-owned company, YouTube decided to acqueice to the demands for a stronger copyright enforcement system. How did they do this? Simple: they licensed content identification systems and used that to determine what uploaded content was infringing.
You see, at this point in time YouTube was trying to attract content creators to their service. Unlike other Google services, they can't just pull other people's content, but they instead have to have people push it to them. And, in order to legitimize the video service in the eyes of both the law and the public, they needed to change the kinds of things being uploaded to YouTube into something that worked better. People who actually made content for a living were not going to touch ad-supported online video if they were going to be sitting right next to actually stolen content.
Or, in other terms, copyright infringement on YouTube became an Existential Threat.
Since then, a few things have changed. The amount of infringing content on the service has fallen significantly, of course. But it hasn't necessarily attracted the kinds of traditional media content that YouTube was aiming for when they started cleaning house with Content ID. Yes, YouTube now had a wider array of traditional content they could monetize. But nobody in traditional media really considers YouTube, even now, to be their flagship video distribution platform. Instead, the vaccum has been filled with video blogs, reviews, and plenty of grey-area videogame content. And that latter one has led to a sort of cold war scenario.
You see, while video game publicity is increasingly driven by YouTube content, most of these videos fall somewhere between fair use and infringing derivative works. This has led to a situation where most game publishers aren't interested in wholesale removal of their games' video content, but definitely do have an interest in controlling that coverage. (Well, that and third-parties that are able to abuse the Content ID system to monetize works they don't own, but that's a different issue.) So over the years since the institution of Content ID and now, we've had occasional blips of legitimate rage as various shades of grey-area videos are taken down by publishers with an interest in controlling the narrative.
Apparantly, however, this Existential Threat must have shifted in YouTube's eyes. They've announced recently that they will start identifying certain fair-use cases and refusing to service takedown notices on them. They will go further by providing up to $1,000,000 worth of financial backing to defend against lawsuits relating to their videos. And, in fact, this has actually been a policy in the works for a while, being applied ad-hoc in certain cases, and is now becoming official. Essentially, YouTube is taking a position of valuing their content creators and the content they produce more than their own legal protection.
This is great news.
For the record, I don't believe this will solve all of YouTube's copyright woes. Fair use is shaky ground in any context and a lot of things that should be fair use aren't. Let's Plays, for example, would pass most standard fair-use criteria, but only in certain cases. In order to actually prove if they count, you would need to find and fight a protracted copyright battle with harsh consequences. Also, this legal representation relies on a facet of US copyright law that simply doesn't exist anywhere else. The result is that certified fair-use videos are going to be region locked and only available in the US, primarily to deny legal standing in other regimes where this excuse doesn't fly.
Also, none of this applies to YouTube's Content ID system. That system is an entirely homegrown affair with no legal repercussions for enforcing or not enforcing it beyond their contractual obligations with the multi-channel networks that have access to it. We are still going to have to deal with third-parties with dubious claims to the monetization rights of other people's work. We are still going to have to deal with people who create content specifically to exploit flaws in the Content ID matching algorithm. We are still going to have to deal with the shaky legal ground on which Let's Plays stand. We are still going to have to deal with Nintendo deciding that they are in the right for taking down speedruns of ROM hacks.
But maybe that will change. The legal climate surrounding more creative fan projects is going to have to change before YouTube can be more confident in defending them. However, the Existential Threat remains. While YouTube was successful in removing blatantly stolen content from their platform, the main draw of their service relies on transformative derivative works that are not always so-to-speak licensed. They thrive on grey-market material that is just so much more interesting despite, or perhaps because, of being transgressive from a copyright standpoint.
That's why the YouTube Music Key service was, and now YouTube Red is, interesting in the ways that other music streaming services weren't. You wouldn't be getting those services for mainstream licensed music (though Google's other music streaming service for that was also included). Instead, the main draw is the heaps upon heaps of remixes, mixtapes, collaborations, promotional content, and other things related to the music you would otherwise be listening to. Google Music can get you Skrillex's back catalog but YouTube Red can get you twenty different creative, semilicensed remixes of those songs.
I don't see the mechanic by which YouTube could actually do this, but it would be nice if they and we had the resources to engage in the legal battles necessary to expand the case law surrounding fair use to new kinds of media that simply didn't exist 20 or even 10 years ago.