YouTube Red's new terms of service have some users feeling, well, red

Oct 29, 2015 11:26:41 AM

Wondering why you can't find content from places like ESPN or Grantland on YouTube anymore? It all has to do with the site's new YouTube Red premium service, and yup, you guessed it — a terms of service update.

Last week, the online video giant unveiled plans for a premium service designed to compete for users and dollars with Netflix and Spotify called YouTube Red. For $10 a month, users will be able to access unlimited streaming music, videos without ads, and a smorgasbord of original YouTube content through the update to the website. It's an experience designed with users in mind, bringing about much requested features such as being able to play music with the YouTube app closed on an iOS device. However, creators are viewing the changes as an attempt by YouTube to make more money off of their content without just compensation — and a terms update is at the center of the issue.

YouTube has a number of "content partners" that are compensated to host their video live on the site. Many of these partners, such as Grantland, earn a cut of the ad revenue generated by their content. For each of these partners, YouTube gave a simple ultimatum: accept the terms update and allow your content to live on YouTube Red, or have it pulled from all YouTube sites. It's a classical contracting case where one party has lost all leverage due to YouTube's dominance of the web-video marketplace. Here's TechCrunch on the issue:

"In theory, if YouTube presented an offer that made creators more money without a significant loss of control, they’d happily volunteer. But the coercion involved  It sets an alarming precedent about how YouTube and Google might work with creators in the future. Being the defacto video platform of the Internet affords it enormous strength behind its threat of removing their content if they don’t play ball. So what’s to stop it from altering the deal any further?"

This strategy likely will work for the video giant on individuals such as performers and DIY instructors that use the site as their primary source of income. They've got no other option and likely don't have the big legal guns to fight the service's new terms. But, what happens when YouTube meets a conglomerate of equal size and legal weight in Disney & ESPN-owned Grantland? 

Well...

Grantland

When YouTube says that 99% of creators are on-board, they're not wrong. But it's an important 1% that are still holding out from accepting the site's terms update. Don't expect that to change any time soon.

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Kyle Robbins

Written by Kyle Robbins