People love online video these days. In some cases, it has even begun to replace old-fashioned TV watching as users connect their PCs or web-enabled set-top boxes to their TV sets and get the best of both worlds. But it's a tough world to make a living in for video sites, not only are they struggling to bring in revenue, they also have to keep content creators, aka TV networks, happy. Put all of these things together and you get another case where a video site cuts off access to a device and, surprisingly, this time it isn't Hulu, it's YouTube.

Starting with next month, users of a line of set-top boxes going by the name of Popcorn Hour are left without access to everyone's favorite chat-video site in what the manufacturer, Syabas Technology, believes to be a somewhat arbitrary move. The company says that it had an agreement with YouTube to access the content through the API the video site offers and the devices have had YouTube videos for more than a year now. Syabas claims that YouTube has changed its Terms of Service (ToS), which it was in its rights to do, so that third-party manufacturers like itself are being blocked from accessing the videos, if they don't pay up anyway.

YouTube wouldn't comment on this particular case but has issued a statement that applies to it, “Since July of 2008, YouTube's Terms of Service has restricted implementations for televisions based on our APIs. YouTube has been in active discussions with various developers on how best to implement YouTube on set top boxes and TVs. There are several companies, however, that have deployed solutions, like video scraping technology, to circumvent the rules and violate YouTube's Terms of Service. Companies that have negotiated agreements to use our APIs, like TiVo, Sony, Panasonic and PS3 are not impacted.”

The situation mirrors a similar one in which the popular video site Hulu repeatedly blocked access to Boxee, the media center software maker. In that case, Hulu was singling out Boxee and restricting access to a free stream. But if you take YouTube's word on it, in this case, the third parties have been in violation of the ToS for more than a year now. It's not clear why YouTube hasn't acted to reinforce the rules earlier but it does look like the companies knew very well that the video site might decide to do so at one point. There is a way out of this though, YouTube is happy to allow set-top box manufacturers to access the content; in fact, it already does so with several of them, just as long as they don't mind signing a seven figure check in return (via MediaMemo).