[Sofaking]

Unfortunately, none of your ‘fair use’ arguments stand up against the first law that gets violated in EVERY case, which is copying the song or movie clip from it’s original source into your editing system. The Millienium Digital Rights Copyright Act of 2001 (I may have the exact name wrong) was drawn up in response to the pervasive pirating of music and movies on the web. Lawmakers went an extra step in setting up a felony at the point of digitizing. Just read that little FBI warning at the beginning of every DVD on the shelf…
This new law has been used on multiple occasions to go after COLLEGE STUDENTS WITH NO MONEY. They have even sued the parents of 12 year old girls who illegally downloaded material to their home computers. (Google it if you don’t believe me…)
No amount of “You’ll NEVER get caught because no one cares about this minor stuff” rancor would convince me that a lawyer for one of those violated entities would ignore your “deep pocketed” corporate outfit, given knowledge of the activities. The statement that “Federal lawsuits are too expensive to pursue” only makes sense for the defendant wanting to settle out of court. Those lawyers who would dare to rip those deep pockets open to get their client’s compensated will not hesitate to drag you right into court and claim their costs as additional damage.
A standard indemnification clause would release the producer of culpability if drawn up correctly. Record contracts and other productions almost always have something of that sort to protect both the artist and the producer. Otherwise, how would the producer protect his interests if the artist were to submit an obscure song from another artist as their own work? The producer must obtain the indemnification clause to shield himself from the laws protecting other’s intellectual property.
It may be for a small audience and no one who matters may ever see it, but it’s still wrong. What if that artistic video you’d been working on for years was suddenly used to sell or promote a product or idea you didn’t agree with? You’d want to be compensated. The artists your company refuses to pay would probably feel the same way.