A specific and sophisticated phenomenon confirmed by investigations in 2024 and 2025 aligns with your query.
The "fake movies" you are seeing are primarily "concept trailers"—fake promotional videos for non-existent blockbusters (e.g., Titanic 2, Bond 26, Back to the Future 4) created using AI and deepfakes of celebrities.
The "pay algorithm" promoted them because of a controversial loophole: Major Hollywood studios were secretly claiming the ad revenue from these fake videos rather than taking them down.
The Core Mechanism: How the "Pay Algorithm" Was Weaponized
Normally, when a user uploads copyright-infringing content, a studio issues a "takedown" to remove it. However, in this case, studios including Warner Bros. Discovery, Sony Pictures, and Paramount reportedly used YouTube's "Content ID" system to claim the monetization instead.
Creation: Channels like Screen Culture and KH Studio used AI to stitch together clips of celebrities (e.g., Henry Cavill as James Bond, Margot Robbie in Avatar) into convincing "trailers" for movies that do not exist.
Algorithm Boost: Because these videos generated high engagement (millions of views) and the rights holders (studios) were actively claiming the income, YouTube's recommendation algorithm treated them as high-value, safe content to promote to wider audiences.
Profit Splitting: The creators got exposure and subscribers, while the studios collected the ad revenue from the millions of views. This financial incentive prevented the studios from issuing copyright strikes, effectively allowing the "fake movie" ecosystem to thrive.
Key Players and Examples
The Channels: The two primary offenders identified were Screen Culture (1.4M+ subscribers) and KH Studio.
The "Movies": Viral examples included a Superman reboot starring actors who had never been cast, a Squid Game season 2 featuring Leonardo DiCaprio, and a Top Gun 3 teaser.
The Celebrities: Actors like Henry Cavill, Tom Holland, and Dwayne Johnson were frequently "deepfaked" into these roles without their consent. This led to severe backlash from SAG-AFTRA (the actors' union), which called the practice a "race to the bottom" that exploited human likenesses for quick profit.
The 2025 Crackdown
Following an exposé by Deadline in early 2025, YouTube was forced to act.
March/May 2025: YouTube demonetized Screen Culture, KH Studio, and their subsidiary channels (Screen Trailers, Royal Trailer).
Policy Violation: YouTube cited policies against "repetitive content" and "misleading metadata" rather than copyright infringement, likely because the copyright holders (studios) were technically consenting to the videos by claiming the revenue.
Distinction: Fake Trailers vs. Deepfake Scams
While the above explains the "pay algorithm" promotion of fake entertainment, there is a darker parallel category:
Investment Scams: Deepfake videos of celebrities (like Elon Musk or Steve Burton) appearing to promote crypto scams or giveaways. These often appear as paid ads or live streams. Unlike the "concept trailers" which are entertainment-focused (albeit misleading), these are malicious fraud designed to steal money.
Summary Table: Why You Saw These Videos
| Component | Role in the Ecosystem |
|---|---|
| The Creator | Uses AI/Deepfakes to make "Concept Trailers" for clicks (e.g., Titanic 2). |
| The Studio | Warner Bros/Sony/Paramount claimed the revenue via Content ID instead of deleting the video. |
| The Algorithm | Saw high engagement + "Verified" revenue partner (Studio) -> Promoted the video to millions. |
| The Outcome | Users were misled into thinking fake movies were real; Actors' likenesses were exploited. |
- https://www.theverge.com/news/639440/youtube-ai-fake-movie-trailer-crackdown-monetization
- https://www.imdb.com/news/ni65210158/
- https://deadline.com/2025/05/youtube-suspends-ad-sales-fake-movie-trailer-channels-1236393362/
- https://www.pcmag.com/news/youtube-cracks-down-on-channels-profiting-from-fake-movie-trailers
- https://www.youtube.com/watch?v=GHDxZcy19R4
- https://petapixel.com/2025/04/02/how-movie-studios-cash-in-on-fake-ai-movie-trailers-on-youtube/
- https://www.pocket-lint.com/youtube-fake-movie-trailer-crackdown/
- https://deadline.com/2025/03/youtube-ad-revenue-fake-movie-trailer-screen-culture-1236354143/
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- https://www.pastemagazine.com/movies/youtube/youtube-fake-movie-trailers-problem-ai-cracking-down-demonitization-channels-art
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- https://www.reddit.com/r/movies/comments/1kkon51/youtube_takes_further_action_against_fake_movie/
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- https://gizmodo.com/youtube-cracks-down-on-fake-movie-trailer-channels-making-money-2000600973
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- https://the-medium.co/p/the-market-signal-youtube-demonetizes
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- https://www.androidpolice.com/youtube-fake-movie-trailer-channels-crackdown/
- https://www.tubefilter.com/2025/03/31/youtube-kh-studio-screen-culture-ai-trailers/
- https://www.cnn.com/2019/12/13/tech/youtube-fake-accounts-viral
- https://www.youtube.com/watch?v=e_dWxpWBoAk
- https://www.youtube.com/watch?v=FHgrFjXDPyk
- https://tech.yahoo.com/entertainment/articles/youtubes-fake-movie-trailer-conspiracy-195737395.html
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- https://www.nbcnews.com/tech/tech-news/deepfake-scams-arrived-fake-videos-spread-facebook-tiktok-youtube-rcna101415
- https://www.scamwatch.gov.au/about-us/news-and-alerts/scam-alert-fake-celebrity-online-investment-scams
- https://www.youtube.com/watch?v=pHxWd7Qdtuw
- https://www.accc.gov.au/media-release/its-a-scam-celebrities-are-not-getting-rich-from-online-investment-trading-platforms
- https://www.axios.com/2024/05/28/celebs-ai-scams-wellness
- https://www.securities-administrators.ca/news/canadian-securities-regulators-new-capability-disarms-more-than-3900-fraudulent-investment-websites/
- https://mashable.com/article/youtube-ai-video-ads
- https://www.getsmarteraboutmoney.ca/learning-path/crypto-assets/red-flags-of-crypto-fraud/
- https://www.reddit.com/r/TwoBestFriendsPlay/comments/1kkssui/youtube_takes_further_action_against_fake_movie/
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