Videoly is a content discovery service (as allowed by YouTube's Terms of Service), not a video distribution service. The thumbnail that appears on the website is simply a link to a video that can be played via YouTube's embedded video player. Embedding videos via YouTube’s embeddable video player is permissible for online shops according to YouTube's Terms of Service.
1. Video content from YouTube is allowed for use if the video player provided by YouTube is utilized. This complies with YouTube's Terms of Service. Using the standard player, YouTube plays the video content, not the individual website. Videoly never shows content marked by the uploader as non-embeddable.
2. For users of the service, Videoly guarantees that by placing YouTube videos onto their website via Videoly, they are not incurring any liability towards YouTube or the uploader of the videos.
3. From a copyright perspective, the uploader of the video has agreed to grant a license to YouTube to utilize the video. By uploading a video to YouTube the uploader also grants a license to third parties to access the video via YouTube and to use it as enabled by a feature of YouTube, such as an embedded YouTube player.
4. The uploader of the video is legally responsible for the content they upload. YouTube operates on a clear copyright policy in relation to any content that is alleged to infringe the copyright of a third party. In case a video shows copyright-infringing content: YouTube does not claim non-infringement, they simply remove infringing content following the copyright owner’s notice. If Videoly becomes aware of concerns regarding content, Videoly removes the video from the widget.
Here is a link to YouTube’s Terms of Service: https://www.youtube.com/static?gl=GB&template=terms and
to YouTube's copyright notice: https://www.youtube.com/t/copyright_notice