Recording the rental contract has to be made very cheap, but the government, the guarantor of all contracts, can establish standards for recording digital contracts. An important issue is that people should be able to buy and sell contracts. Another is that people should be able to keep contracts in their own private devices. Verifying such contracts should be something that any playback device should be able to do, by some automated means. I think designing such a system would be very easy for a good cryptographer.
Advertising permits all fair uses and generates income for artists.
Nagging permits fair uses, and can be placed in even the simplest legitimate open-source software to comply with the regulations. The artistic work itself can be in clear, and copied and viewed by public-domain programs. It is simply required to have an identifying tag. Automatic nagging is like publisher's access to manuscripts. The form is inconvenient, but the content is available for evaluation.