You need to go to the plugins section on the editor & install it.
Well, technically you don't need to, but it gives you an action part method for adding in-scene videos easily.
Anyway, here's 3 different examples taken from Simon's
luadocs web page...
addMovie(Objects["Object0"],"vispath:test.mp4")
addMovie(Objects["Object0"],"vispath:test.mp4",false,1)
addMovieScaled(Objects["Objekt0"],"vispath:test.mp4",2,2,false,1)
& here's the available parameters for each function:
addMovie(object, path, loop, blend)
addMovieScaled(object, path, scaleX, scaleY, loop, blend)
quick note: blend makes the video semi-transparent. If you filled it mostly with a specific color then that color would probably end being masked out. I'm not really sure how it works, but apparently Daedalic used this in-scene video thing for their The Pillars of the Earth game for the snow particles that were playing in various scenes.