They do that: https://support.google.com/youtube/answer/7000961?hl=en
Edit to quote the full section because the cherry picked quote is misleading:
> If you dispute a claim within 5 days, any revenue from the video will be held, starting with the first day the claim was placed. If you dispute a Content ID claim after 5 days from the original claim date, we'll start holding revenue the date the dispute is made.
Someone who didn't have the rights resampled the original song and submitted it to a label (not sure that's the right term), and the label proceeded to DMCA every single video the guy had posted.
Over a thousand videos, having to gather all that info for all of them, go through the appeals process on all of them. For him it was a manual action one at a time. From the label they have an API to bulk initiate claims
You should have to negotiate a percentage fee, not assume the claimant is entitled to 100%
This is likely why the only other ‘competitors’ you see are peering based or based on a subscription model. Neither of which can really compete with YouTube which really doesn’t need to *directly* make any money
YouTube ended up in that situation for two reasons. First, the original YouTube before Google bought it was playing fast and loose with the law and was in the process of getting sued over it after Google bought them. Second, Google wants to license Hollywood content for YouTube TV etc. So between wanting to settle the lawsuit and wanting to sell their soul and become Comcast, Google agreed to do a lot of this draconian BS that isn't otherwise required by law.
A competing service that just wants to be YouTube without being YouTube TV could plausibly follow the law without steamrolling the little guy quite that much.
Which means you need it to not suck or have some other countervailing advantage which is enough to overcome that, e.g. TikTok, but without the geopolitical issues of that one.
Additionally both sides of the dispute normally still want the monetization, they just disagree about who gets the proceeds. And because of the time value curve of YouTube videos (most make something like 90% of their revenue in the first few days), demonetizing has a good chance fo essentially erasing the revenue of the video for the creator.
If the media companies had their way, everything would work like YouTube Content ID, because that's the system that minimizes their enforcement cost. What they want is to make everything Someone Else's Problem.
Like all you would have to do to, perhaps not fix, but heavily mitigate this, would be to have YouTube just... hold onto the revenue until the dispute is resolved. It's barely even a change. And most of the time, when creators do counter the claims, they're eventually dropped but again because of how that system works, YouTube has already funneled all their money to the claimant, irrespective of the determined validity of the claim. And it would discourage bullshit claims because even as low-rent a scam as this is, it is some amount of work, and if there's no payout, you necessarily reduce the number of scammers who will attempt it.
I don't know if that's a DMCA thing, I admittedly haven't researched it in a long time, but I don't see how that would put YouTube at any kind of liability. Any reader, do feel free to correct me.