To make things simpler only the mp4 format would be accepted. Streaming is planned to be implemented by the browsers themselves which would make loading videos a lot faster.
A project like this would probably only implement a basic solution like is already seen in Vidy rather developing complicated workarounds.
A developer may want just want to make enough to pay for something important like university while working on project like this in their spare time.
I believe payment is made only on completion of the project or after certain goals would be reached, so even in the event the project were to fail no one would lose much other than the developer themselves in time. Also I was taking a look at and have a good idea of how the code work on the network side already and would be more than happy to go into it in more detail if a the proposal was accepted.
I completely understand and this is further evidence for your support for the SAFE Network and to challenge ideas that you think are wrong or misleading.