"They wouldn't sign contracts without DRM, because for some reason they think DRM works"
DRM absolutely works, just like the 'war on drugs' actually works.
If Netflix allowed mp4's of content to be downloaded, and there were 'no DRM' in the world, there'd be an explosion of 'piracy' (or pick a nicer word). 'Not paying for anything' would be absolutely normative. Netflix would not have a business model, neither would the creators who make stuff for Netflix. Just as if opioids were freely available, your mother who just had jaw surgery and took '3 pills' might want a few more, and a few more, and a few more ... and most of your little cousins at Uni would experiment, and probably one of them would become addicted to the 'Heroin Cola' or 'Heroin Cigarettes' or 'Heroin Vape' or 'Heroin Cookies' that are available every corner store and advertised heavily. Everyone, at some time in their lives would be victim to opioids, it'd cause problems. So they are illegal, and controlled, and you need a prescription in some cases, and the availability is very narrow for most people, they don't have ready access, the legal consequences are rough, and so 'most people' never bother.
The game of 'DRM' (and hard drugs) is not to 'stop all' so-called piracy, it's to keep a limit on it.
This is a game of Supply and Demand, not a game of absolutes.
As it stands, in 2019 - if you want to watch films, you pretty much have to pay HBO, Netflix, Cable, iTunes for most high quality stuff.
'Bit Torrent' for example, is a fairly ugly experiential barrier for consumers, and it helps prove that DRM works - not the other way around. 'Bit Torrent' is way beyond most people's material capability, moreover, you kind of have to really look for stuff, know where to find it, possibly wait forever for stuff to download, you expose yourself to all sorts of creepy stuff and spyware - it's a 'bad experience'.
The state of DRM today is that it's not exactly easy or convenient for regular people to get a copy of the latest Avengers in decent quality - the evidence for this is easy: because they are paying for it (otherwise they would not).
Of course, the economic realities of that system can't be ignored either: if there is no money, there is very little content.
Podcasts and a lot of decent music would survive, but anything that required production wouldn't.
As for Google, Netflix et. al. - they are 'all in on it'. We can't point the finger at one point in the value chain.
Google does things because entities like Netflix will need it.
Netflix does it because content producers need it.
Content creators need it because they have to pay writers, directors, actors, set designers, and of course take a big risk every time as most content that's made flubs.
I understand ideals such as 'freedom of information' etc., this is fine, we should always be talking about DRM, but the level of cognitive dissonance on this issue is painful.
It's very expensive, and very risky to make such content, and frankly, there are very few making huge money from it. If we want that stuff, we have to pay for it. There's no way around that.
Edit: I worked with the music industry in developing a content delivery system (it didn't work out). Yes, it was shocking the level naivte and lack of understanding going on there, which is partly why we dropped the project. There were (and continue to be) some really difficult things about that industry that made it ready for destruction (among other things). Specifically how the unions have worked out their 'rev-share' agreements with respect to minimum revenue per song, etc.. Instead of % rev-share, they have hard minimums like 15-25 cents for certain entities (i.e. writers/composers - this was 10 years ago I fail to remember the group). This poses some ugly realities on price points, but also 'bundling' of music. I suggest that the 'real market value' of most songs, even in a 'fully DRM'd world' is much less than $1. Because of those 'ancient' pacts written by the Moses's of Music Industry, which nobody seems to have enough leverage to influence - it's nary impossible to sell or distribute music cheaply back in the day. If the labels, writers, composers, performers had of 'adapted their model' it's possible they may not have been wiped out, granted, as I noted below, music is different than video.
We have to look at Google's decision in the context of the entire value chain: points of consumption, distributors, producers, and the various creators etc..