Well the title says it all. I produced/directed/edited a music video for a long time friend and client.
Here is the original video YouTube - ‪Tex and Rook "Take a Picture With Ya"‬‏ (http://youtu.be/wY1OlJXMOdM?hd=1)
Here is the stolen copy: YouTube - ‪Ana Arzu starring in Tex and Rook's Take a Picture With Ya‬‏ (http://youtu.be/SKzUd0QOMs4)

The client is upset about it, but I and the clients own equal rights to the video (part of my payment, among other things, I'm thier manager) They have left it up to me to decide on what to do.

We hired models for the video as you can see. The stolen copy was stolen by one of the models company or the model herself. I am not sure. The stolen copy looks like crap. I think they recorded it by aiming another camera at the screen. They definitely did not get a copy on dvd.

All the extras in the video signed releases etc. Even the girl that may have stolen the video.

I'm thinking I should leave the subject alone because its more exposure (though limited) for my artist, and my video. But it looks so crappy though. What would you do?

hmmm... mighty pretentious going from "extra" to "star"... particularly if there's a model release specifying the "role".

I'm guessing this is someone's idea of a "show reel"? It does appear to have the copyright headers at the begining, so other than the quality and the dubious aspirations of the budding "starlet" in the title, it's a little tough to figure out the "copyright" violations.

If it were me, I think I'd make contact, offer a limited use license to Ms. gonna be famous, provide a proper copy and politely suggest she alter her "credit" to properly promote herself, whatever her actual role was ("star" is reserved for the actual artists I presume?).

I am shooting in the dark, not knowing the roles and relationships of the people involved, didn't watch enough to figure out who "Ana" was... but presuming that things are cool all around, that'd be my "take".

Your theory of any exposure is good exposure is probably sensible... I just suspect that "starring" bit is where there's some potential problems, and that's where something needs to be addressed?

I'd send them an email explaining why it isn't cool, asking them to take it down and tell them to redirect to your original copy if they want to show it to anyone. Wouldn't spend much time on it. More exposure is good, but not if the quality is terrible.

Thank you for ya'lls advise :)

If you don't vigorously enforce your copyright rights this time, it may put you in a poorer position to enforce them in the future. Exposure for your client or not, the fact remains that this is an unauthorized copy and even if the model or her company don't directly profit from it, the fact that it is of lower quality than your official release damages you and your client by exposing your client to the public in a less favourable light. Your client would rightfully want the public's perception of them to be based on their best quality work, not some inferior quality copy.

Steve's point about enforcing your copyright is important - one of the principles of IP law is that you have to act to protect your IP if you find it being infringed, or potentially "lose" that right in the future.

That can be as simple as granting a limited license under specific terms, but you should absolutely establish a "paper trail", even if it allows for what's being done on a "single case" basis.

I'm presuming that the "starlet" is using this video to "showcase" her talents, and in so doing is hoping to get more work (profit) from it. Whether that has any value or not, I didn't watch enough to see... BUT, you now need to take at least SOME action, having become aware of the situation.

I see a couple options, one, send a Cease and Desist for unauthorized use, and force her to take it down period... probably won't be happiness there... OR, make a quality copy available for reasonable consideration (even $1...), specify in detail how it may be used to further her career, and get it all in writing so that "paper trail" is established.

I'd take the general approach of being as nice as possible about it, but address the issue so that if this time or in the future it comes up, you can show you take your copyrights seriously.

Send YouTube a "Take Down" notice. You have to hunt through the site to find out how but once you find the info its easy.