Blog Post

Totlol Creator Learns the Hard Way He Can’t Build a Business on YouTube

Updated with a statement from YouTube: Over the past two years, developer Ron Ilan built a site called Totlol that features a moderated selection of YouTube (s GOOG) videos appropriate for kids. He hoped to build a business on it — and actually started charging membership fees earlier this year to avoid shutting the site down for lack of money. This week Ilan is crying foul, saying YouTube prevented him from his preferred business model, advertising, by changing its terms of service. What makes Ilan really mad is that he spoke with multiple people from YouTube about Totlol around the time of the ToS change, and none of them mentioned to him that his business was effectively kaput.

Ilan wrote an extensive and dramatic post about his relationship with YouTube, calling out members of its product and developer relations teams by name. When asked to condense his complaint over email, Ilan replied:

What has changed – In the simplest of terms – the ToS were
modified, July 7th 2008, to deprive from Totlol and/or similar sites
the ability to generate any meaningful income using the most common
methods on the web (ads/sponsorship/promotions). Under such terms the
potential for any service is very limited. Most will die. The
exceptional ones (as Totlol is) will survive, but will not
breakthrough. This was done a looooong time ago and they intentionally
hid it.

Specifically, the ToS prohibits the sale of advertising on sites that simply provide embedded YouTube videos without other content on the same page. This is similar to Hulu’s recently enforced embed policy, which stopped video aggregators like Rippol from embedding its video library wholesale. Ilan believes that the YouTube ToS allow him, however, to charge a fee, and he says Totlol has “not so few” paying users. Still, there can’t be that many users; Totlol doesn’t make enough money to keep Ilan from seeking full-time work elsewhere.

A spokesperson for YouTube said he could not comment on the complaint, primarily because the relevant YouTube employees and lawyers are off for the holidays. He did note that YouTube explicitly states it is not a service intended for children (aka those under 13) — so it’s not as if YouTube currently has a competitor to Totlol that it’s trying to promote by stamping Ilan out. Update: A YouTube spokesperson sent the following official statement:

Updates to our API Terms of Service generally take months of preparation and review and are pushed out primarily to better serve our users, partners and developers. When new Terms of Service are ready, we notify our developers through as many channels as possible, including on our developer blog.

The reason Ilan is complaining now is because he just recently looked up the ToS page on and realized YouTube’s terms changed around the time he was talking to members of its team last year.

So should anyone even try to build a business on top of YouTube? Google does offer a guide to “Using the YouTube APIs to Build Monetizable Applications,” and calls out one area of potential development as “video organization and discovery.” Within that category, it says an example of the Dipity TimeTube app which shows videos on a timeline, and suggests a travel app where users upload videos to maps of their trips. Both of these apps are different enough from YouTube’s site to be monetizable, under the July ’08 edits to the ToS. However, just filtering the site for child-appropriate content is not.

Though Totlol is (of course!) a derivative site, it provides an alternate view of YouTube that’s useful, and different from what YouTube offers itself. And in the end, that’s exactly what an API should encourage developers to do.

11 Responses to “Totlol Creator Learns the Hard Way He Can’t Build a Business on YouTube”

  1. “Specifically, the ToS prohibits the sale of advertising on sites that simply provide embedded YouTube videos without other content on the same page. “

    Isn’t there a simple workaround to this? Simply let users comment (unique content) or pull keywords about the video and display related Wikipedia articles or something?

  2. youtube is no evil..
    maybe it was totlol way to make big use of google’s bandwith with videos and powerful marketing on youtube

    abuse of any website will lead to that
    but they didnt’ broke, did they?

  3. timekeeper

    “He did note that YouTube explicitly states it is not a service intended for children (aka those under 13)”

    So why does Sesame Street have a user page on YouTube (launched July 2008):

    For the nostalgic value for the 13+ crowd?

    I guess the “Do no evil” mantra is just for Google and not its subsidiaries.

    It seems that Google/YouTube find interest in this demographic and may be planning something of their own.

  4. Why doesnt he just use another video host or better yet create some written content on the pages that his YouTube videos rest upon?

    The only thing YouTube is providing is traffic and a nice place to find his work. He has as much opportunity to get traffic as any other site…I dont see what the deal is here.

    • @timekeeper – Yes, they say it’s for the nostalgic value.

      @Adam – YouTube is providing all the content hosting and the world’s largest library of videos to draw from. Creating written content seems like a good idea. Another would be getting licenses to host kids’ content himself.

      • “getting licenses to host kids’ content himself.”

        That’s what we’ve done for, licensing over a thousand hours from over 25 different video producers and sharing revenue with both them and our distribution partners.

      • timekeeper

        Nostalgia? Ha!

        That’s not the response you get when you talk to Sesame – They’ve been mandated from the top to get on YouTube to reach their demographic and not the older audience for nostalgic reasons.

        Nothing like talking out both sides of your mouth just to make a buck.

    • Actually YouTube isn’t providing any traffic to him as is a front-end for/filter of YouTube videos not a producer of them. It’s worth highlighting here that since all of the content resides on/streams off of YouTube servers his hosting costs are minimal. There are other sites like that are doing the same thing.