The content hosted on Youtube cannot be 100% hosted legally. It is impossible to believe that you can find a full album of Pink Floyd hosted on Youtube and that’s a legal thing.
This is an extract from the support page of Google:
Videos removed or blocked due to YouTube’s contractual obligations
YouTube enters into agreements with certain music copyright owners to allow use of their sound recordings and musical compositions.
What is the bottom line here? Is Youtube big enough to be allowed to publish full albums of Pink Floyd? Or does Youtube pay a dime to Universal so they are allowed to publish the audio content?
My question is: If Youtube can go away Scot’s free with this, why can’t the fediverse? If we start to host massive video/audio content, what will happen to the fediverse?
The short answer to both is likely, yes.
Google has a lot of money and can prolong court cases, you’ll notice most copyright bullies tend to go after the small fish so they can get a precedent before using it against the bigger fish. What protects them the most is that they have installed their copyright system, Content ID, which allows Universal to upload hashes for their content and it will then hunt for any video with that in it, at which point the automated system is designed to block the content or leave it up if that’s the publishers wants or monetize the content and send the money to the publisher.
The owner of those instances will likely be sued, if their server host doesn’t kick them to the curb first, probably both.