A video server receives an uploaded video and determines whether the video contains third-party content and which portions of the uploaded video match third-party content. The video server determines whether to degrade the matching portions and/or how (e.g., extent, type) to do so. The video server separates the matching portion from original portions in the uploaded video and generates a degraded version of the matching content by applying an effect such as compression, edge distortion, temporal distortion, noise addition, color distortion, or audio distortion. The video server combines the degraded portions with the original portions to output a degraded version of the uploaded video. The video server stores and/or distributes the degraded version of the uploaded video. The video server may offer the uploading user licensing terms with the content owner that the user may accept to reverse the degradation.