Pretty much. Based on my limited experience, I will most likely never go back into the mainstream music niche on YouTube unless I am forking out $25,000+ and creating a record label, but the return on investment isn’t there. When doing it right, you have to sign small Soundcloud artists and bank on them blowing up under you. Problem is, why would any artist sign with you compared to a more established label, or even better, a cheap distributor like CDBaby or RePostNetwork. If you don’t sign them, and they blow up, a record label will sign them and destroy your channel in the process.
It is definitely possible to make it work if you want to make a quick buck, but it isn’t easy. The reality is that you are most likely going to get terminated eventually and have to start all over. Whether that is within 1 month, 6 months, 1 year, or 2 years, it will happen. If that is something you don’t care about, then all the power to you. Many people see YouTube as an opportunity to make a quick buck, which it can be. But the real money is from doing it legit, and if you are trying to make a quick buck you are going to get beat out by people doing it legit 99/100 times over a 3 to 5 years period when you have to start all over and they are trucking along.
Like Nova said, it is possible to adjust the waveform by multiple semitones to temporarily bypass the automated copyright system, but if your video gains any decent traction it will get manually flagged. Plus, viewers usually hate when the song is altered and off pitch, and therefore they usually aren’t going to subscribe to you and come back.