Well, first of all, it would have to be a codec unique to one player or to players authorized by the content provider. That means it can't be the standard MPEG or WMV that Vegas has access to. This way people downloading the videos won't be able to watch them in any player they choose, save them, open them, use them, etc.

Secondly, there must be header information contained within the file that specifies the viewing rights granted by the user's license. This information might possibly contain payment status, duration of the license, number of views permissable, number of views so far, etc.

Thirdly, there must be a database stored somewhere that keeps a list of the user's licenses and expirations. The player would consult this database before playing each file and determine if it has been paid for or if the user has a valid membership. It would also update the number of plays if appropriate. This database may be stored on the content provider's server if the provider is super-snoopy and wants to closely watch what the users are doing. However, this would mean that the users must be online to watch the videos and that would probably be an unacceptable requirement. Alternatively, the database would be stored on the user's computer so it would always be accessible. Perhaps the player software would rat on the user and transmit current stats to the provider when the user goes online periodically.

Come to think of it, Microsoft seems to have been doing this with DRM and MediaPlayer for a few years already. I won a few song downloads from MountainDew bottle caps. I had to register for the download service and "cash in" the codes on the caps to be able to download and listen to the songs. Pretty neat promotional idea. They even catered to a huge variety of tastes and i found some old Benny Goodman stuff that i enjoy. Of course, i could only play these files in MediaPlayer after i had agreed to all of Microsoft & Pepsi's terms and also downloaded the license key for each.