I guess, you are using a video in a format that isn't supported by your browser. I just tested it and it works fine with a testvideo. Since I am on Firefox, I downloaded this sample video and uploaded it to the document library: (or you can use the url directly, should work too)

http://techslides.com/demos/sample-videos/small.ogv

The tricky thing here is that companies like youtube check which browser and OS you use and provide the video in the right format. Liferay can do that too, you need to install xuggler. When xuggler is installed, it will create "copies" of the video in various formats to support the various possible clients out there.

But I am not sure, if the video widget handles that correctly. Could be, but maybe not. If not, you would need to clone the video wiget and add support for multiple formats yourself.

But just try it first. Maybe you don't need all that and e.g. just need to support Chrome. Then it might be sufficient to tell your editors, that they have to upload the video in webm format.

Notice that serving larger videos from DL risks that you always download the full video, in the resolution that your author chose. Streaming providers like youtube deliver small chunks, adapt to available bandwidth and screen size, and only download those chunks incrementally - if you only watch 5% of the video, there's no need to download the full video. And for large videos that might occupy a connection for a longer time - especially when a client is bandwidth constrained.

Olaf answer about sending whole video when using Xuggler is wrong.It just sends the video portion browser asks using http partial responses so it should work perfectly fine and scalable.

And what Christian said about Xuggler is mainly right and wanted to clarify video client when using Xuggler should work fine for all browsers and devices as it uses native HTML 5 video player