I've got this, too. I just bought this thing last summer, and it's infuriating that the picture is so terrible, since watching vids is about half of what I use it for.
I've tried all of the options listed below,
- System Preferences-->Displays-->Color-->Color LCD.
- System Preferences>Displays>Display>Toggle off Automatically adjust brightness, and toggle off True Tone, Then click Night Shift and try turning that off.
I've done all of these things, and none of it helps.
I'm betting it's a processing or rendering problem, because when I do a screen cap, it comes out just as clean as you please.
I also notice this issue doesn't show up on a movie I just watched on iTunes. Hmm.....
I've also noticed that it cleans up a little bit when I jiggle my mouse, or otherwise interact with the computer while the vid is playing. It's almost like it waits until it thinks you're not paying attention, and then starts truncating the image quality.
The article linked below by chris_g1 Community Specialist is completely useless. As far as I can tell, I'm the only one on my network, and I'm running ethernet, not wifi, which is supposed to be faster anyway.