Thank you for the clarification! I was certain that there was a clear ruling for format shifting; I might have misread it then.
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I take no position on the subject. It's almost certainly a derivative work, but it may be a fair use.
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From what I've seen in my own personal involvement with fandom, the views of TPTB vary greatly on whether it's fair use. Sme forbid it, others encourage it, or at the very least employ a DSDT policy. I certainly believe it is, but then I admit to not being objective about it.
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That's one of many factors considered in a fair use analysis.
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There are many new films, shows and books I've come to enjoy and spend money on because of fan recommendation or fanfiction, so I would definitely say it's not competing but complementing the original market.