PC Gaming

I think you're being too forgiving to Google, and also pointing at the wrong problem.

The central problem isn't ad space, but the DMCA. It requires companies that host content the way YouTube does to have policies for DMCA takedown requests. Generally, this means removing content when they receive a request. The DMCA makes a form of compromise here, where hosting companies won't be liable as long as they show they're processing takedown requests in good faith.

This is exactly the same law in the US that comes into effect when your ISP gets a takedown notice. Your ISP isn't liable as long as they pass that on to you and tell you to delete what you "stole", etc.

The problem is partially Google's implementation and partially the DMCA itself. To the best of my knowledge, the three strikes system isn't something in the DMCA. That's YouTube's policy alone. ISPs generally don't operate on a three strikes system--they might choose to, but they don't have to.

The DMCA itself doesn't have any kind of mechanism for pushing back against companies that send takedown notices abusively. This means companies setup an automated system that scans uploaded videos looking for anything they can claim is theirs and send a notice. That's probably what Bloomberg did. These systems aren't smart enough to distinguish fair use from not; they have zero incentive to even try something as simple as "a five second clip of our stuff in a 3 hour video is probably fair use". The entire burden is placed on content creators to show they aren't infringing.

Until the law is changed to deal with notices sent in bad faith, this sort of thing will continue. Naturally, companies like Disney and BMG yell bloody murder any time they even get a hint of Congress trying to do that.

All this is separate from YouTube's own content ID automated system. That's a whole different set of problems from the DMCA.