Use of copyright-protected work by non-faculty in a nonteaching situation fall within Fair Use.
Buying a book, videotape, or music CD only gives the purchaser limited rights to content.
However, the four factors need to be applied more stringently. Just because the activity takes place in a nonprofit educational setting does not mean that any use is fair. When applying the four factors, it's important to consider:
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If the use is for news, criticism, commentary and parody, or in some way transformative, such as quotations used in a paper or short clips in a multimedia product
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If the copyright-protected work is fiction, nonfiction or personal expression
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How much of the copyright-protected work will be used? what portions will be used?
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If the permission to use the work is available for purchase.
One of the key misconceptions concerning copyright is that of purchase. Many people believe if they purchase a book or videotape, then they have the right to do with it what they want. In one sense, they're correct. They can do whatever they want with the plastic case and mylar that the video is recorded on. However, buying a book, videotape, or music CD does not give you the right to perform or display it publicly. There are separate licenses that must be obtained before a copyright-protected work can be performed or displayed for the general public.
Another consideration is the audience. If the work is performed or displayed in a public place where anyone can view it, then the use is probably an infringement.
It's a better idea to limit access to events where copyright-protected work is to be performed or displayed to those in the immediate college community. In addition, copies of multimedia productions that use copyright-protected works may not be made available to the general public. It is an infringement to sell copies of music, video or interactive multimedia CDs that use popular music unless you have permission through licensing.
The option for non-instructional use is to get permission from the copyright holder through licensing. There are film companies that grant limited use for public performance of motion pictures. It can cost a couple hundred dollars for a few days. In addition, there are music licensing groups that grant licensing for the use of their products. For print materials, the Copyright Clearance Center is a good place to start.