Is there a recommended way to configure streaming video from the sharepoint site to the LMS system?
If I upload them as multimedia, my understanding is that they are then downloaded to a person’s PC as the view the content?
Potentially, you could set up a web server or use BLOB storage for these videos. Browser permissive file handling should be configured on a web application level to be able to stream videos.
The setting can be found in Central Administration>Manage web applications>Manager web application General Settings>Browser file handling