What makes you think that a competing hosting service is going to result in competition that benefits the users, and not the rights-holders?
The rights holders may end up playing the two services against eachother, and use the more draconian policy of one as arguments for making the other more friendly to their interests.
They have a lot more skin in the game than users do.
The problem doesn't exist to such an extent in the web-hosting world. (where there is much competition)
DMCA requests usually don't result in a website shutting down unless the webmaster is non-responsive and the claimant makes further moves beyond the first request.
It should be noted that YouTube's copyright strikes are not DMCA violations, for the reason that the DMCA has penalties for making false claims. The media cartels claim that this is an onerous burden for their enforcement division which is why they worked with Google to make sure they wouldn't be subject to legal action for taking down legitimate content.
The easiest solution would be to create penalties for false takedowns of legal content, but this would likely just result in Google being sued for trillions of dollars by the media cartels to remove such restrictions under the argument that Google is aiding in piracy.
This all happened after the big Viacom lawsuit against Google: Google set themselves up as private arbitration and gave the big media companies a massive gift of control of the platform, pretty much because they didn't want to deal with continued suits directed at them. Even though the Safe Harbor provisions basically absolved them of any responsibility, they'd still have to fight in court every time some litigious parasites sued them.
That's when ContentID and the non-DMCA takedowns started happening.
> The easiest solution would be to create penalties for false takedowns of legal content ...
You hit on this in your first sentence. And this whole arrangement with Google is specifically to side-step those penalties. Your 'easiest solution' is for Google to return to DMCA takedown requests. I agree. I want that. I think most consumers and content creators would.
I think Google could have moved plenty fast enough to ever prevent a domain seizure. I think if Google had ever had creators in mind, they'd have put some money into their legal responses to takedown requests, and they'd have also forced Big Media to play by the rules. The way I see it, it came down to Google being threatened with becoming a defendant to the infringement suits brought against uploaders. Clearly, the DMCA protects web sites as long as the process is followed, which Google could have afforded to do for awhile.
Instead, Google would rather have made their own job easier by standardizing 'requests.' There's nothing in the DMCA specifying that some standard, machine-readable format be used. To get the media companies on board with keeping the takedown request process as automated as possible, they compromised.
Even if Youtube was in the right, it would take years and multiple appeals to get to that conclusion and then Viacom still appealed so at some point Youtube just decided to settle, it was cheaper.
I believe that means that in the current legal environment it is not cost efficient to provide free hosting of third party videos, ad supported, without draconian/significant number of false positives content identification system that is made available to the biggest potential "suers". Thus, even if a competitive service would appear, if it needs to be profitable using the same format it would likely end up implementing a similar (or worse) system. But I'd be happy to be proved wrong.
Whoever is in charge of this situation dropped the ball out of fear. It cost Google plenty because all videos should have ads unless you are on a paid account.
Nobody is going to watch a video on a random website unless if it's hosted on some sort of content aggregator like Reddit. Afterwards, creators will want an easy way to monetize on the content aggregator. Next, you'll just have Youtube with extra steps.
The rights holders may end up playing the two services against eachother, and use the more draconian policy of one as arguments for making the other more friendly to their interests.
They have a lot more skin in the game than users do.