They understood the Dmca brilliantly so they did bulk cheap content purchases and hid behind the Dmca for all non licensed content which was "uploaded by users". They did bulk purchases of cheap content from some studios but that was just a fraction

Of course their risk of going advertise revenue only was high and in the beginning mostly only cam providers would advertise

Our problem was that we had contracts and close relationships with all the big studios so going the Dmca route would have severed these ties for an unknown risk. In hindsight not creating a company which did abuse the Dmca was the right decision. I am very loyal and it would have felt like cheating

Now it's a different story after the credit card shake down when they had to remove millions of videos and be able to provide 2257 documentation for each video