Isn't this just an arms race that they can never win? Regardless of source, encryption, format, etc. If a frame of a movie eventually makes it to my video card's buffer, I can get at it, right? There is no end-to-end encryption from source into my brain.
I can only see this just being a colossal inconvenience for users, developers, and many many innocent applications.
The end game would be decrypting it in the display device (better have a movie conglomerate approved video card and display device so everything supports the drm!) + one of the many solutions lately that can cause recording devices to (voluntarily at the device level, not at the user level) turn off.
Then of course you just use a non-broken recording device and record it but it'd be potentially very hard to get a purely digital signal out of a system like that (unless they mess it up, which they will).
And in the end pirates will continue getting to it an alternative way or cracking the drm and as you say, users are the ones inconvenienced.
I can only see this just being a colossal inconvenience for users, developers, and many many innocent applications.