At an early point in the development of the Internet, I was called in as a software consultant to prepare a technical recommendation on how to stop people stealing music using the Internet. The Internet, I told them, is the world's largest digital copying machine, and the only way to stop it from being used to copy music would be to build an anti-Internet of equal size. Since that is entirely impossible and ridiculous, you need to stop trying to figure out how to constrain distribution, and instead use it to your advantage to make money *by* distribution.
I was not asked back to complete that project.
Thankfully, Google figured out how to do exactly that. It made deals with the major licensing agencies. It added a way to automatically identify content so copyright holders could be properly credited. It gave copyright holders the choice of either suppressing their content or taking the ad revenue. It took several decades, but eventually it became clear that it made much more sense -- and much more money! -- to let Google allow the content but redirect the revenue. This wasn't always perfect, but it's getting better. If you are a premium subscriber, part of your fee gets distributed to copyright holders in the same way (and that's one of the reasons the fee is so large, comparatively.) Google itself takes a rational administrative cut, similar to the cut that managers and agents have taken in the business. And, they're working on adding a content creator subscription model, so that directed subscriptions can be sent to creators, and not just ad revenue shares.
Again, this has not been an easy transition. Some copyright holders, especially music, continue to hold onto the belief that they can make more money working outside YouTube. It's still way too easy to game Google's copyright Content ID system.
But the people at Google are pretty smart. YouTube is a global phenomenon, for good reason.