Thank you for contacting Telerik support.
You can upload .mp4 files in DAM. It reads the allowed upload extensions from the following place in Sitefinity Advance settings:
Just add .mp4 in the "Allowed file extensions" checkbox and you will be able to upload/play it in DAM.
Keep in mind that for playing .mp4 video in Sitefinity, not in DAM, you need to change also the following setting to Html5 instead of Silverlight:
If you have any other issues do not hesitate to contact us!
Do you want to have your say in the Sitefinity development roadmap? Do you want to know when a feature you requested is added or when a bug fixed? Explore the Telerik Sitefinity CMS Ideas&Feedback Portal
and vote to affect the priority of the items