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The first step in becoming a professional is developing the ability to say “no,” and the willingness to walk away from a project.
You’re involved in a can’t win situation; you’re being jerked around by several people and relationships and have no control over the situation. Here’s what I would suggest: tell the band that you’re finished, that there’s nothing more you can do and that you’re unwilling to spend more time making changes to the project. They’ve approved the rough cut and that’s what you’re going to deliver.
In the future, on the band’s projects, or any other project for that matter, say you’ll do their video’s for $XXX per performance. It doesn’t need to be much at first, but with this you’re now entered into a business transaction. Since this is now a business, have a contract that spells out exactly how this is all going to work: what you will do, what the time-line will be, under what circumstances and to what extent changes to the rough cut can/will be made. The contract doesn’t have to be elaborate, but it must spell out exactly what your obligation will be. This way there will be no recriminations in the future; both you and your clients will know what’s expected.
Under no circumstances release any of your work until you’ve been paid! And don’t associate your name with any of the work — i.e., nothing about you in the end credits — unless it’s of a quality that you’re proud to call your own.
In the end, the band may be surprised by the “new you,” and your friend, who is taking advantage of this friendship, may get upset. Still, walk away from this gig; there’s nothing in it for you as things now stands except continuing aggravation and frustration. If, as you say, the video quality is terrible, little you can do will provide you with useful examples of your work on an audition reel.