Adobe spells it out. Here’s a summary.
When to Use Progressive Download
Progressive download is a perfect use for hobbyists or websites that have low traffic requirements and only need to deliver short videos. Customers who need advanced features and control over their video delivery—not to mention displaying video to large audiences (for example, several hundred simultaneous [...]

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There’s a difference between progressive and streaming video. Do you know what it is? It’s confusing to say the least. The good news is that Adobe has a nice guide to telling the differences.
Here’s a summary.
Progressive Downloading
Pros and Cons
Keeping the video external and separate to the SWF file offers a number of benefits over embedded [...]

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