The issue you show occurs when you fail to add the videos to the export file list.
You can check your export files and you will notice that there is no file:
"../videos/Movie1.mp4"
The PowerPac does not add this automatically. Instead you use the menu item,
PowerPac > Add folders to export tree
The following dialog will open:

- Image 1.png (82.09 KiB) Viewed 6438 times
Click to insert folder and pick your video folder. All of its contents will be automatically copied including any sub-folders.
Now when you export, your [videos] folder will be included along with all the files inside the folder. When you run your web application, the mp4 file should be found and play as expected.