Is that what happened? The plug for State Farm at the end makes me think they did an end-run around the label and got somebody else to pay for the video, thus the record company doesn't own the video and they can embed it? (But then they'd still own the rights to the song, so maybe not)

Maybe the label was alright with embedding if they could do a sponsorship deal to sub in for the otherwise lost revenue. (Recall that YouTube only pays the label for video views in a YouTube-hosted page.)

You may be right. I've been searching for some evidence of either case, but haven't found any yet. I had figured that the video being embeddable had meant that the label had listened to Damian's previous post.