The client can do that 100% client side, you can serve pure static files with a JS player that handles the streaming. All you have to do is chunk the video into small 2-5 second chunks at a variety of nitrates and list them all in an .m3u8 playlist file if the right format.

I know because I explored this for a hobby project of a movie I liked. See here: http://lelandbatey.com/projects/REDLINE-intro/

Use your network inspector to observe your browser requesting the individual chunks over time. Note that my server is just an Apache2 file server.

Pretty cool!

always wondered how this handles prebuffering. (i.e. max-prebuffer = chunk-size) ?