This is to do with the most recent graphics driver I think. I upgraded today to NVIDIA's Webdriver 378.05.05.05f02 when it was prompted by my computer and iTunes works fine now (when you download the video).
Edit: Issue has been fixed in NVIDIA's Webdriver 378.05.05.05f02
I would like to report this issue too.
On a clean install, iTunes videos do not work at all. If I go through the steps previously, it just worked fine. Now after 10.12.4 it plays for a couple of seconds and the video turns black...
I upgraded to version macOS 10.12.1 (16B2338c) (beta 3) and needed to update the NVIDIA Graphics driver to the latest one.
To get NVIDIA graphics to work I had to use Flat Package Editor to edit the WebDriver-367.15.10.05f01.pkg file.
Extract Distribution file to desktop and open it in...
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