I worked on a project that did this from 2015 to 2019.

Can store encrypted files in S3 or any file host, but would need clients to understand how to encrypt/decrypt. Using encrypted DM, we can convey necessary secrets to decrypt that only the two parties would have. Once decrypted nothing prevents them from saving local to share so it's not DRM, but it's very doable for both static files and video with seek support. Starting point here is defining the NIP standard

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