I'm having this problem as well on my GS3 I'm running likewise 4.2 with ktoonz kernel. It seem if I stream or download the video the problem is the same, it stops at 9 seconds. I decided to see if this problem was localized only to the google play movies app so what I did was find out where the movies were stored and opened one with a different player. In this case I used MX player, however it did the same thing. The same thing happened when i moved the file to my pc and tried it with vlc. This leads me to believe that the downloading/streaming process is somehow being affected. That being the case I tested my tablet which is an acer iconia a500 running tegraowners omni rom and their kernel. Streaming works, so what im going to do is download a movie and then move it over to my phone and see if it will play then.
edit: Ok nope neither the pc nor my phone will play the movie file from my tablet, however the tablet plays it just fine. drm crap i guess...