App Inventor for Android only permits video files under 1 MB and limits the total size of an application to 5 MB, not all of which is available for media (video, audio, and sound) files. If your media files are too large, you may get errors when packaging or installing your application, in which case you should reduce the number of media files or their sizes. Most video editing software, such as Windows Movie Maker and Apple iMovie, can help you decrease the size of videos by shortening them or re-encoding the video into a more compact format.
You can also set the media source to a URL that points to a streaming video, but the URL must point to the video file itself, not to a program that plays the video.