This is not legal advice. You shouldn't be trusting legal interpretations from an unqualified, Canadian secondary school student. I advise you to seek professional advice from a qualified person.

The question you've asked here, is whether programmatically looping a song results in a derivative. The question at stake is a general one: when does manipulating a work result in a derivative?

First things first, we need to figure out what a definition of a "derivative work" is. The license of the work you are using says the following:

"Adaptation" means a work based upon the Work, or upon the Work and other pre-existing works, such as a translation, adaptation, derivative work, arrangement of music or other alterations of a literary or artistic work, or phonogram or performance and includes cinematographic adaptations or any other form in which the Work may be recast, transformed, or adapted including in any form recognizably derived from the original, except that a work that constitutes a Collection will not be considered an Adaptation for the purpose of this License. For the avoidance of doubt, where the Work is a musical work, performance or phonogram, the synchronization of the Work in timed-relation with a moving image ("synching") will be considered an Adaptation for the purpose of this License.

Ooh. Fun stuff.

Looking at this, there's a bit of a conflict here.

The license, in it's last sentence in its definition of "Adaptation" states that the concept of playing music with an image qualifies as an adaptation of the work. But when is a musical work "in sync" with a visual display? Unfortunately, I'm not aware of any case law that touches upon this, but, in my opinion, it could be reasonably interpreted that the musical work must be synced to play at specific points in relation to the animated display. While a musical work may be played at the start of the animation of a display, it is no longer in sync if either work does not change based on the status of the other work. In other words, if the position of playback for the musical work doesn't depend on the animated display, or vice versa, than it's not an adaptation. But of course, that conclusion is not definite.

The conflicting part here is that an adaptation includes the definition of a "derivative work." The license doesn't really define the term, and naturally, we'd look on to statutes and legislation to find a definition. However, does programmatically looping a musical work qualify as a derivative work?

The Supreme Court of Canada thinks not. In Théberge v. Galerie d'Art du Petit Champlain inc., they wrote (and I quote):

[73] I should note that while there is no explicit and independent concept of “derivative work” in our Act, the words “produce or reproduce the work ... in any material form whatever” in s. 3(1) confers on artists and authors the exclusive right to control the preparation of derivative works...

That, along with most of the judgment, brings us to the conclusion that for a derivative work to be made, there must be a reproduction. For this to take place, the work must be reproduced in a material form. However, no new material work is produced when looping a musical work, meaning that programmatically looping a song does not qualify as a derivative.

Does this apply to the United States?

It is repeated many times in the Canadian judgment that the American definitions are much more expansive and broad. Again, I'm not largely familiar with American case law, but I would imagine that the results be similar, the work was never transformed in any way, but rather just played repeatedly.

Conclusion...

Since no new work is being transformed, it is my opinion that there is no derivative work.