When The Library Is Held Liable 2: AV Materials
§ 108. Limitations on exclusive rights: Reproduction by libraries and archives
(i) The rights of reproduction and distribution under this section do not apply to a musical work, a pictorial, graphic or sculptural work, or a motion picture or other audiovisual work other than an audiovisual work dealing with news, except that no such limitation shall apply with respect to rights granted by subsections (b), (c), and (h), or with respect to pictorial or graphic works published as illustrations, diagrams, or similar adjuncts to works of which copies are reproduced or distributed in accordance with subsections (d) and (e). (US Copyright Office, n. d.)
Aside from systematically copying works, a library IS held accountable for digitizing audio-visual works, such as music, pictures, graphics, sculptures, and films. However, news in any format is perfectly fine to digitize. Also, pictures, diagrams, and such within a desired item are fine to copy if the library is copying them for a patron (see Exception 4). So, music CDs and films are definitely off-limits, even for libraries, unless covered by Fair Use.