Video websites such as YouTube may be forced to pay more to artists and record labels to avoid "exploitation of content" under plans to shake up European copyright law.
The European Commission (EC) proposals would also require platforms to deploy technology that can detect songs or videos which have been requested for removal by rights holders.
YouTube has been widely criticised by the music industry for failing to "value the music that creates business and traffic for the service".
The new proposals - which also aim to protect newspapers and magazines for the first time - were put forward during EC president Jean-Claude Juncker's State of the Union speech in Strasbourg on Wednesday.
Mr Juncker said: "I want journalists, publishers and authors to be paid fairly for their work, whether it is made in studios or living rooms, whether it is disseminated offline or online, whether it is published via a copying machine or commercially hyperlinked on the web."
The draft directive "aims to reinforce the position of right holders to negotiate and be remunerated for the online exploitation of their content on video-sharing platforms such as YouTube or Dailymotion".
The reforms would also oblige publishers and producers to be transparent about profits made from an artists' work.
Google-owned YouTube makes money by selling video advertising and splitting profits between rights owners.
Earlier this week, a report published by UK Music on the state of the British music industry hit out at YouTube and the digital streaming industry.
In the report, UK Music chairman Andy Heath said revenues from ad-funded digital services "effectively devalue our music behind protectionist and out dated legislation".
However, the EC digital single market plans - which are the result of two years of public consultation - were roundly criticised by internet rights campaign group OpenMedia.
Digital rights specialist for OpenMedia, Ruth Coustick-Deal, said the plans would "weaken the foundation of the open internet".
She added: "The Commission decided to ignore this public feedback and EU citizens are now looking at some of the worst copyright rules in the world."