Overall it seems that quite a few Vimeo users were surprised to see their service had one of the worst terms:
“I’m distressed to find where the two sites I use the most (YouTube and Vimeo) are listed.” — Tensegrities
“Interestingly, current darling of the video hosting world Vimeo doesn’t come out too well [...]” — Machinima for Dummies
“[...] the best sites are the most restrictive.” — CoPress
“Boo Vimeo! I always got the feeling they were pretty filmmaker friendly [...]” — OTTfilms forum
“Netribution’s (until now) prefered site Vimeo comes off the worst” — Netribution
Jim Mortleman commented this with advice to video hosting services that “[in order to be successful] you need to be clear that you’re not going to hijack [a user's] work” – a statement in line with Lawrence Lessig‘s remarks at approx. minute 40 of his OFC conference keynote. While undoubtedly true, I believe there is a broader concept that should be targeted first, without which the legal terms are mostly irrelevant: the User Experience.
Although the importance of the legal terms might rise in the future, e.g. through growing user awareness or some services trying to monetize on their users’ content as Jim suspects, this just underscores the importance of providing a good user experience in my view. Assuming that the legal terms do matter to users, the ability of a service to win new users – as well as to not negatively surprise existing users – will then not only depend on the user experience in regard to a service’s video features but also on whether a service is able to convey the meaning of its legal terms. Providing difficult to understand legal terms will leave users with no better impression than a video player that is difficult to use, even if the legal terms would actually be very favorable for users.