Just upgraded to Safari 9 - now all youtube videos max out at 720 and don't allow for 1080 or higher resolution.
I have AT&T Uverse 50MPS so bandwidth isn't an issue. Even checked on my Macbook pro running safari v 8 and I can get those higher video quality.
Any solutions?
iMac (27-inch, Late 2013), OS X Mavericks (10.9.5)
I am experiencing the same problem: YouTube video quality using Safari 9.0 on OS X 10.9.5
It appears that the new HTML5 YouTube player doesn't work properly in Safari on Mavericks.
The simple workaround that I found is enabling the "Develop" menu in Safari (Preferences -> Advanced) and then changing the User Agent to, say, Firefox-Mac. This way YouTube loads the old Flash player that has all the video quality options including 1080p.
I had this and other issues after deleting Flash Player, and running HTML5 on YouTube. Also found that any live streams on YouTube or Twitch froze my system. I updated to El Capitan and now have not only 1080p but also 60 FPS on Youtube and Twitch. So much nicer, and content has never looked so good on a '09 MBP.
The short of it is Safari 9 on Mavericks has some issues with HTML5 Video. Update if you can. It was 100% worth it for me.
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safari 9 and youtube video quality
