[cyanide911]

Not sure what they do, but it's entirely possible to build a solution where all image/video content is stored on-blockchain as well.

>If so, how do they solve the problem of people downloading the blockchain being liable for illegal content added by other users?

Divide each file into N shards, make sure every miner has no more than N/2 shards of any file at any point in time. You only 'get' a complete file if you specifically ask for it.

[sanderjd]

I'm not a lawyer, but I believe it is unlikely this solution will hold up in court.