User content on D&D Beyond is open source
Since the sale of D&D Beyond by Twitch to Fandom.com, the licensing situation has changed (or more accurately, been added to).
The original Twitch/WotC license situation is detailed below (spoilers: it's slipshod and accidentally overreaches in an alarming way), but Fandom's licensing situation is much simpler:
Everything put up on D&D Beyond is covered by Fandom's general license, making uploaded content licensed under Creative Commons Attribution Share-Alike 3.0. (I had a moment of doubt because the license says “wiki” and that doesn't exactly describe the user-submitted portion of D&D Beyond, but it the only license Fandom has that covers user-submitted content at all, so that's as good as it gets.) That means that anyone (WotC included) can freely use anything uploaded to D&D Beyond, including in commercial and derivative works, so long as they 1) give due attribution to the creator, 2) allow the same freely-reusable license for whatever derivative work they create directly based on the user-created content taken from D&D Beyond.
Basically, WotC could put your class, monster, or whatever in one of their books, but they'd have to treat it similar to OGL material and give credit and relicense it to the reader to use in the same way.
That's not a bad license. It's basically open-sourcing any contributions. It means you don't control the content anymore in terms of restricting what others can do with it, and others can use or remix what you upload to D&D Beyond so long as they credit you.
(Although you can't restrict what others do with CC licensed content, you still hold the copyright on it and are never yourself restricted by the CC license as to what you can do with your own copyrighted material.)
The wrinkle is that the original Twitch/WotC license also still exists for anything that was uploaded before the sale in December 2018. The sale of D&D Beyond to Fandom doesn't extinguish the license that Twitch had to that content, since it was an unrevocable, in perpetuity license (see below). Although Twitch may have signed a contract that assigned their licenses entirely to Fandom, we don't know the conditions of the sale, so it has to be assumed that Twitch still holds that content under that terrible license. On the plus side, Twitch could only have a vanishingly small interest in exercising that license even if they do still hold it, so it's not practically meaningful.
So TL;DR, user-created content uploaded to D&D Beyond after Fandom bought it is open-sourced, the same way as content submitted to Wikipedia or to RPG.se is open-sourced.
For the historical outrage, read on to the terrible, terrible license that Twitch originally had on D&D Beyond uploaded content.
The original Twitch/WotC license
This section written October 2017. Any present-tense should be interpreted as referring to that time.
Presuming that D&D Beyond qualifies1 as a “Twitch Service” under the Twitch TOS, then this is the controlling license text from §8(a)(i) (“User Content”, “License to Twitch”):
Unless otherwise agreed to […], if you submit, transmit, display, perform, post or store User Content using the Twitch Services, you grant Twitch and its sublicensees an unrestricted, worldwide, perpetual, irrevocable, fully sub-licenseable, nonexclusive, and royalty-free right to (a) use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such User Content (including without limitation for promoting and redistributing part or all of the Twitch Services (and derivative works thereof)) in any form, format, media or media channels now known or later developed or discovered; and (b) use the name, identity, likeness and voice (or other biographical information) that you submit in connection with such User Content.
So far, so good: D&D Beyond has a license for the user submitted content. They're just relying on their blanket license, rather than making a D&D Beyond–specific one or adding D&D Beyond–specific provisions to it.
Notably, to address the odd mismatch with what the question naturally expected, this license doesn't involve users granting anything at all to WotC.
This is not a good license for D&D Beyond though
There are some issues with this license, when taken as a whole.
I'm not a lawyer (IANAL), but I study intellectual property as an amateur, and my understanding is that this license's highlights are
You grant an unlimited, permanent license to Twitch to use any content you submit. (S'cool.)
Twitch does not own the IP, you do. (Also fine.)
Twitch has no say over what you do with the same material elsewhere (that's the “non-exclusive” part). (Excellent.)
But Twitch can do anything it wants with it.
This includes reasonable things like
- Displaying it on their site (which is what you want them to do)
- Modifying it as needed for computers to be able to handle and transmit it (also important for the service to do what you signed up for)
… and un-reasonable things like
- Resell it unmodified (ehhh…)
- Relicense it to anyone under any terms Twitch wants (um…)
- Create derivative works that Twitch can do anything with as if they held the copyright
(🚨 AUGH NO 🚨)
- Use specific personal info you've submitted to them (and hence any fame attached to you) to advertise your content and any derivation they make of it, as if you are personally endorsing the ad (half okay, half bleh.)
This is an incredibly wide-reaching, alarmingly bad license for users, unfortunately. I don't think WotC's PR department would be happy with it, if the full implications became the subject of a loud public discussion, as it doesn't seem to meet the standards for their community relationship that WotC has established with the DMs Guild licensing.
That said, these provisions are pretty typical in the wild, for a media company whose lawyers were allowed to go into full “covering our butts” mode without any corporate oversight for the PR implications, and precedent for actually using those unreasonable provisions (apart from the promotional one for the original content) is really slight, so there's near-zero reason to take it as intent to do unreasonable things with user content.
The most they're likely to do is to do the normal uploading and displaying stuff, and maybe using some of the best in an ad or something with the creator's name and face attached. If Twitch ever gets acquired or folds, the content and full-permission license gets transferred to the new owners, if any.
The problem is four little words
Specifically, the poisonous part of that license is the four little words “create derivative works from” in §8(a)(i)(a). All those other things (modify, adapt, translate, etc.) are necessary to make sure they can adjust the content so that it's in a format that they can then serve on their website or whatever service — the whole point of the exercise. That's fine and necessary in any license regarding user content on a service that's designed to display and distribute user content. All the other provisions, by themselves, would just mean that they can display your material without meaningfully altering it for the life of Twitch or its inheritors, which is mostly what a user expects and wants when signing up.
But a derivative work is a whole other kettle of fish and breaks the license wide open. A derivative work is a copyright concept where someone makes changes to something to create something new, even though it's obviously based on the original. Copyright says that the original creator still owns the copyright on (and therefore, normally, controls) any derivative works that anyone else makes — which is why people can't just, for example, publish a Star Wars novel whenever they feel like it. But this license defangs that part of copyright entirely, and with it, pretty much anything copyright is supposed to accomplish.
The trouble is that along with the rest of the license, that effectively means that Twitch has forever-permission to do absolutely anything they want with your material, zeroing out every right and control you have under copyright when it comes to Twitch or anyone else they choose. Effectively you still have the copyright, but it's meaningless because you've licensed all control over it forever, to anyone Twitch (or its inheritors) chooses. They could take the best submitted homebrew and publish it as a hardcover D&D supplement and keep all the credit and money. They could take all the homebrew and give it to another company who then chooses some, tweaks it, and makes a new Pathfinder setting product with it. Sixty years from now Twitch could be acquired by a Virtual World service and use your homebrew to make some kind of VR RPG unrelated to D&D's branding. They could take the “Druid McAwesome” class made by some Jason Jones guy and republish it as “Druid: Jason Jones Smells And Is A Stoopidhead Edition”. Anything.
This is all really, really unlikely, but forever is a long time. So that's a thing.
It seems to (§1¶1):
Welcome to the services operated by Twitch Interactive, Inc. (with its affiliates, “ Twitch ”) consisting of the website available at http://www.twitch.tv, and its network of websites, software applications, or any other products or services offered by Twitch (the “ Twitch Services ”).