The Financial Times reported on Monday (paywall) that YouTube has paid out $1 billion to copyright holders in a program that allows them to monetize unauthorized use of their copyrighted material.

YouTube introduced ContentID in 2007 to scan user-generated uploads for copyright infringement. When ContentID finds an upload that may have unauthorized copyrighted material on it, it alerts rights holders and gives them the option to either have the video taken down or to place ads on the video and make money off those views.

Over 5,000 copyright holders, like music labels and TV and movie studios, participate in the program. “All of the big US TV networks and movie studios” are included, the Financial Times notes. Over the last seven years, $1 billion has been paid to those participants, in some cases making unauthorized uses on YouTube an important revenue stream for the rights holders.

While ContentID agreements have been a good compromise for Google (which owns YouTube) and copyright holders who would otherwise want to sue the pants off the company, it hasn't been so great for average users. ContentID has often come under fire from users for erroneously flagging “fair use” content, which allows for the use of copyrighted materials for commentary, criticism, parody, and educational purposes, among other things. Still, in 2012 the company reformed its ContentID policies to protect its users from frivolous takedown requests by making the copyright holder file a formal DMCA takedown request if the user disputes ContentID flagging. "That matters because there are legal penalties (albeit relatively modest ones) for filing bogus DMCA takedown requests," Ars wrote at the time.

Once content has been flagged for infringement, the appeals process is still weighted towards the rights holder. This creates frustrating situations in which a video uploader has done nothing wrong but is still penalized or forced to subsidize the copyright holder with ads on the uploader's video.