How encryption for Cinema Movies works

Most pirated copies aren't from theatrical releases; they mostly come out when the titles are available on streaming/blu-ray. DRM might be a failure in other fields, but it's working pretty well in this particular case.

I think the question remains, is it still worth it given these holes?

It presumably is, as the effort is kept up despite the cost and inconvenience.

My guess would be that the plan is mostly to ensure that when a new release premieres in theatres, going to a theatre is the only way to experience it in high quality.

It doesn't really matter all that much if the people who waits for it to arrive on Netflix gets a pirated copy; it does matter if the ones forking over $20 to see it in a theatre does, though.

A really important element of this is that much of the burden of maintaining the DRM is on the theaters, and the theaters themselves are the ones who care about protecting the theatrical release period: you might be less likely to pay them for a ticket if you can get a high-quality copy at home before the actual streaming/media release

It’s a different dynamic than we typically talk about with DRM. Most of the time DRM is something imposed on a consumer who doesn’t really want it. But in this case, the consumer is the theater and they really do want the protection.

While at the same time dealing with potentially untrustworthy employees and the prisoner's dilemma.