You know what, digging into this problem? Truly summarizes why I absolutely detest web development.
Anyway, your primary issue is that "video /mpeg" isn't going to be any mime type. video/mpeg maybe, but that's not a "standard".
video/mp4 is a "standard" type, but, chrome allegedly doesn't support it. Chrome, instead, supports it's proprietary webm "standard". (I love how they just throw the word standard around to describe stuff that doesn't actually work everywhere and therefore by definition isn't standard at all....)
Also, remember mp4 is a container format, but the support for mp4 is *only* for the actual codec. For example, most of my mp4 files are H.264, which seems to be unsupported. THe way of doing HTML5 video apparently is transcoding the file to seemingly every video format under the sun and include that as a source and crossing your fingers that the browser recognizes one of them. Double fun since some browsers will give up once they see an unsupported format, so you need to actually list them in a specific order- If the arbitrary stack overflow and similar posts are to be believed.
If I try to set up that H.264 MP4 like so:
<video preload="auto" controls="controls">
<source src="IBMClone1985_edit.mp4" type="video/H.264">
Your browser does not support the video element. Kindly update it to latest version.
</video>
And try to open that in firefox, it doesn't even tell me it's unsupported. It shows me a video player box but doesn't let me start playing, not unlike what you've described.
I should note, the reason you can open it directly is that when you directly open a video file in Firefox, it will not go through the HTML5 codecs and basically uses DirectShow directly (on Windows), which means it can then play codecs unsupported by HTML5.