If you're interested in how the sausage is made, I believe Netflix uses Microsoft's Smooth Streaming[1] to accomplish that (I know they use it for the in-browser client, but am not 100% positive about the native mobile apps). Smooth streaming is an under-appreciated tool, IMO. Given its power, you might reasonably assume it would be complex and expensive to set up, but it's a free extension to IIS if you have any recent edition of Windows Server and is amazingly simple to get up and running with your own video.