Adding videos hosted locally
Having good integration facilities with third-party sites around your niche content, and sharing capabilities are pretty basic features you will find in most apps today. You may still want or even need to provide your users with the ability to upload their media content to your site directly.
Uploading video files to your site means that the media is right there in your website to play, but how will you play it? Pre-HTML5 era browsers had to rely on third-party plugins such as QuickTime to play Apple's MOV format, or Adobe's Shockwave Flash format to play the popular SWF format. Due to the fact that movies are naturally not encoded in any of these formats but rather using popular codecs such as DIVX, XVID, MPEG2, or MPEG4, it required to transcode videos from their original format to SWF to be playable over the web, which then introduced demand for more resources (transcoding is a CPU-intensive task).
If all that sounds a bit scary and complex, do not worry, because...