It's easy enough for a user to record a video and upload it to YouTube. It's even easier for that user to use a song that may be under copyright in that video. Say for instance, you upload a video and use some background music from your favorite artist. That song is under copyright, and the record labels - as well as the musicians they represent - want to get paid royalties for their music appearing in your video. As they should. The music industry has sort of had the DMCA (Digital Millennium Copyright Act) on their side, but they now argue that it is outdated (passed in 1998) and changes need to be made.
The music industry believes that the DMCA protects YouTube while musicians aren't being fairly paid. A bit ironic seeing as YouTube is what has helped many musicians get noticed and often times, signed by these record labels The DMCA is pretty vulnerable to abuse, particularly by bots designed to get around the law. To give you an idea of how badly things have gotten out of hand, Google is now handling about 75 million DMCA requests every month just for search. This is compared to about 8 per month that the company handled back in the early 2000s. Needless to say, things need to be changed. However, some do think that if the law becomes a bit stricter, that it could affect a whole lot more than just YouTube.
However, the DMCA also enables a "new form of piracy", according to Recording Industry Association of America's chief executive Cary Sherman. Universal Music put together a team that did nothing but search for unauthorized copies of Taylor Swift's "1989" album after it was released, and sent about 66,000 takedown notices. YouTube is doing its part to keep piracy down, as much as they can. Their ContentID system is working well, with about 99.5% of copyright claims being done through ContentID.
While YouTube may be doing a good job at removing pirated content from their platform, they have recently come under fire for not paying enough in royalties. This is due to streaming music becoming more and more popular as of late, and being a major source of income from music for labels and artists. Although YouTube isn't the only one that is being accused of paying so little to record labels and musicians.