The effect of DRM is to prevent the user from doing things that would otherwise be technically possible, such as copying. Once the software has decrypted the media, it can do whatever it wants with it. It is just so designed that what it wants to do with it is not the same as whatever the user wants to do with it.
Free or open-source software give the right and the ability to the user to modify what the software does. So if a feature is missing (save a backup copy), the user can add it (or pay someone to).
I piece of software cannot at the same time: * be able to decrypt a video * be able to be changed at the users' will * be prevented from doing certain things the user wants.
If you merely write a piece of open-source software that lacks the ability to save a copy, you merely have a missing feature that can be added by anyone who wants to fork it, you are not preventing copying.
If the decryption is done in hardware, the problem is the same, just shifted. If people have the ability to change the hardware, then we're back to square one, and if they don't, then it's not a free/open-source system.