IPhone 5s playing video from iCloud takes up all free storage space and phone to crash

Hello All,
Traded in my 32GB iPhone 5 for a 16GB iPhone 5s today. Using the iPhone's built in "Video" app and streaming videos purchased in iTunes will sometimes cause the phone to freeze and fill of the phone's free space until the indicates free bytes in usage says 0. It seems like it is a software glitch as the phone works perfectly fine everyone else. I'm running iOS 7.0.3. I've also tried restoring the phone, which hasn't help.
Has anyone run into this before or have any suggestions?
Thanks.
Regards,
Chris

I've encountered the same issue tonight. Decided to purchase a movie and NOT download it to the iPhone 5S, but instead play it from the Videos app...which supposedly streams it from iCloud.
Half way through the film, a message informs me that I have low storage space. I check storage - 0kb.
I throw away 1.2GB of old apps and various pics / vids in my camera roll, then finish the movie. Just after watching, another message pops up...that 1.2GB was consumed as I watched the rest of the film.
It's almost as if the film was downloaded to the phone...taking up space (what was the point of "streaming" it from iCloud if it was going to take up such a great amount of space on the phone?) But it wasn't in my videos app as downloaded. I was missing 3 - 3.5 GB of space. There was no way to clear the cache. I tried everything (and I used to work for Apple as a highly competent iOS technical support advisor, so I DO mean everything).
In the end I decided to stop fooling with it and just erase the contents of the phone and restore to a backup.
But this is a SERIOUS bug in this system. I know "streaming movies from icloud" was a new feature with iOS 7...I hope they resolve this. Until then, I'll download movies if I want to watch them.

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