I have the same issue.
I have 2 iPads and 3 iPhones and the same issue on them all.
I have about 500 movies, half of which do not work and says 'WATCH'.
I have been to the Genius bar but of course it's 'nothing to do with them'.
My account has been in 'Trouble Shooting' mode for almost 4 months with Apple and no fix. I've been given the work arounds but that's not what I want. I want it to work as advertised.
I wrote an email to Tim Cook, who didn't respond personally but one for 'his' advisors did. He's very nice but can't help either.
They keep giving me free rentals, which is not what I'm looking for.
Is there anyone on this forum who can help?