It would be ideal if you downloaded that video and hosted it on your site.
Well, yes, it would. Technically, that file is
hosted on our site. It is just the main www.* domain which is on the same server as our test site. The test site is just a subdirectory / subdomain off our main site.
The thing is, we are adding this plugin to one of our web site demonstrations for web development with WordPress. That particular demo is for churches who may want to put their church services on-line in text, audio and/or video format. They would almost all be using shared hosting with limited space for storage. The resolution we suggest is paid 3rd party hosting for video and audio content. There are some reasonably priced options for that and they supposedly handle streaming one's videos well.