YouTube has paid out more than $1 billion to copyright holders though Content ID.

The popular video sharing service introduced a system that automatically scans user-uploaded videos for copyright infringement, called Content ID, in 2007. If the system finds a video that may contain unauthorized material it notifies the relevant copyright holders and gives them the option to either take the video down, or monetize it with ads.

“All of the big US TV networks and movie studios” are among the 5,000 organizations that use Content ID, according to the Financial Times (paywall). Major record labels like Universal Music, gaming companies like Nintendo, and popular YouTubers whose videos are regularly re-uploaded to the site, like Hank & John Green, also use the system to police the unauthorized use of their content.

Most consumer-aware organizations immediately saw the value of Content ID and chose to monetize and track unauthorized uploads of their content instead of taking it down. With more than $1 billion now paid out to copyright holders, YouTube has become an important source of secondary income for many companies. This as proven particularly lucrative for large music publishers such as Sony BMG and Universal Music Publishing Group, who often find popular songs in their repertoire included in hundreds of thousands of YouTube videos. At that scale they are, by far, the biggest beneficiaries of the system.

While the benefit to copyright holders is very clear, Content ID draws regular criticism from content creators for its inability to recognize when the use of copyrighted materials has been authorized by the copyright holder, or when content is used under “fair use,” which allows for the limited use of copyrighted material for criticism and parody, among other purposes. It appears that YouTube intentionally designed their system this way to avoid liability. However, in 2012 they completely revised their policies to protect users from frivolous Content ID claims and the seizure of ad revenue by forcing copyright holders to file a formal DMCA take-down notice if a user appeals the match. This gives creators the opportunity to assert their rights under the fair use doctrine. There have also been many cases where content has been erroneously matched to copyrighted material by Content ID. YouTube has continued to refine the system to make it more accurate, and now incorrect claims are largely a thing of the past.

Content ID was introduced after Viacom launched a landmark $1 billion copyright infringement lawsuit against YouTube in 2007. The suit claims the site was engaged in “brazen” copyright infringement by allowing 150,000 videos containing unauthorized Viacom content to be viewed more than 1.5 billion times. Over the years, the suit merged with dozens of other similar cases. However, while the litigation was ongoing Content ID helped appease copyright holders by providing a happy middle ground between both Google’s and the copyright holder’s best interests. After numerous rulings and appeals, mostly in YouTube’s favor, Viacom and YouTube finally settled their suit outside of court in March, 2014.

Content ID has become a model for automated copyright infringement detection, and similar systems have been introduced by SoundCloud, Facebook, Vimeo, and countless other companies that rely on user-generated content.