THE EFFECT OF DEFENDANT'S USE ON THE POTENTIAL MARKET OF THE COPYRIGHTED WORK
"This factor is generally held to be the most important factor. This factor considers the effect that the defendant's use has on the copyright owner's ability to exploit his or her original work. The court will consider whether the use is a direct market substitute for the original work. The court may also consider whether harm to a potential market exists.
This factor is key to the whole analysis, and considers whether the new use of copyrighted content directly competes with the original work. To decide this, ask yourself if your use of copyright content would be likely to serve as a substitute for the original. In the context of online video, could someone watch your video instead of buying the original work and still obtain the same value as from the original? If the answer to that question is yes, your video is likely not fair use. If it is no, that weighs significantly in favor of your video being considered fair use.
ChillingEffects also notes: The burden of proof here rests on the defendant for commercial uses, but on the copyright owner for noncommercial uses. ... It is important to note that courts recognize that some market harm may come from fair uses such as parodies or negative reviews, but that such market harm does not militate against a finding of fair use." This means that in the context of a lawsuit, the copyright holder would have the burden to prove that your use does harm their market. This market harm must be shown to come from direct competition between your work and the original. It is not enough to say that your use criticizes the original and might make someone not want to buy it. That is still fair use.