A wave of digital piracy is once again crashing into Hollywood — this time from YouTube’s own backyard.

Despite years of beefed-up copyright enforcement and billions paid out through its Content ID system, YouTube has become an unlikely home for pirated versions of summer’s biggest blockbusters. Disney’s Lilo & Stitch remake, which grossed $361 million globally during its May debut, was watched by over 200,000 viewers — illegally — via a bootleg upload on the platform, according to a new report by ad transparency firm Adalytics.

The revelations are a sobering reminder that the cat-and-mouse game between tech giants and content pirates is far from over. Researchers uncovered more than 9,000 suspected copyright violations, from new theatrical releases to Netflix originals, live sports broadcasts, and even full seasons of hit TV shows — all generating more than 250 million views combined. The kicker? Many of them were monetized by advertisers like Disney, HBO Max, Hulu, and Focus Features, often without their knowledge.

According to screen recordings and metadata collected by Adalytics and reviewed by The New York Times, YouTube’s algorithm even recommended some of the pirated content — including Captain America: Brave New World — via its homepage carousel. The clips were often edited or cropped to dodge detection, or uploaded and removed within hours, a tactic meant to milk ad impressions before takedowns.

A YouTube spokesperson confirmed that channels posting pirated versions of recent releases were removed but declined to say whether the company profited from ads served before the removals. “Mistakes do occur,” the spokesperson said, calling the Adalytics report a promotional effort for the firm’s own business.

The Motion Picture Association’s chief content protection officer, Larissa Knapp, didn’t mince words. “At one point, the anti-piracy work between studios and YouTube worked,” she said. “Now it seems like some of the stuff may have gone off the rails.”

YouTube has positioned its Content ID system — which flagged over 2.2 billion videos last year — as a robust defense against piracy. But under U.S. law, the burden remains on rights holders to police infringement, not the platform itself. That loophole, protected by the DMCA, has long frustrated Hollywood — particularly as the ad dollars keep flowing, even on illicit streams.

The study has also renewed concerns among media buyers. Quote.com’s Erich Garcia noted that his insurance comparison platform routinely had ads show up on videos that later disappeared, often with no visibility into why. When YouTube scrubs removed content from advertisers’ dashboards, it becomes nearly impossible to know where those dollars went — or why the content was pulled.

As generative AI and synthetic media accelerate, the stakes are only getting higher. For now, pirates are simply outpacing enforcement — and reaping the ad revenue in the process. Whether YouTube can plug the leak without alienating advertisers or rights holders may determine how long this storm lasts.