Here's another interesting question posted by a classmate:
Can schools show non-educational movies to students as a "reward" or as an indoor recess activity?
Here's what I found:
If the school or library owns the tape/DVD and they have purchased or received PUBLIC PERFORMANCE RIGHTS with the tape/DVD, then they can show the movie for whatever purpose they want.
If they don't own public performance rights , then legally they can only show it in curricular situations. Some schools purchase an "umbrella license" which allows them to show non-educational films and videos from lists of producers.
I thought that was interesting. I don't think teachers give it much thought as to whether or not their school has purchased the performance rights. In many schools, it's really up to the media specialist to keep on top of this.