At the core of the dispute is the Content ID system that YouTube built nine years ago in an attempt to turn videos uploaded by users into a business opportunity for copyright owners, while boosting its own advertising revenues. YouTube says Content ID works nearly perfectly to help record labels protect their music and make money from it, and keeps getting smarter.
But many in the music industry say the system isn’t automatically identifying many of their recordings when users have altered or combined them—or occasionally for no apparent reason at all. Furthermore, labels charge that Content ID doesn’t scan the YouTube channels managed by major TV networks and smaller networks such as Fullscreen and AwesomenessTV, many of which feature amateurs covering popular songs.
Source: Industry Out of Harmony With YouTube on Tracking of Copyrighted Music – WSJ