Microsoft designed the Video app on the Surface to pull you into its two storefronts: The Movies Store entices you buy or rent movies, and the Television Store sets the hook for TV shows. To make sure your wallet’s available, you can only use the Video app when logged in with a Microsoft account.
To open the Video app and browse its wares, follow these steps:
1. From the Start screen, tap the Videos tile.
The Video app appears, as shown in the figure. The app immediately confuses things by changing its name to Xbox Videos. That’s because the Video app lets you play videos to your Xbox game console, if you have one, so you can watch your movies on the big screen.
2. Browse to the type of video you want to watch.
The Video app offers four main sections:
My Videos: Scroll to the hidden area beyond the screen’s left edge to see videos living in your Surface’s Videos library.
Spotlight: Time-dated offers often appear here, letting you buy movies before they’re released to DVD, for example.
Movies Store:Tap any tile to browse trailers, buy, or rent movies.
Television Store: Television shows appear here. (Some shows offer a free episode, usually a season opener.)
3. Tap a video’s tile to see more about it.
A window appears, with buttons that let you buy the video, see more about it, watch its trailer, or, in the case of TV shows, buy a season package or individual episodes.
4. Watch a video.
Tap a movie or TV show tile from the storefronts to rent, buy, or download the video to your My Videos section. The app charges the credit card associated with your Microsoft account, or prompts you to set one up.
Tap any video in your My Videos section to begin watching. Swipe up from the screen’s bottom to expose buttons for pausing, playing, and skipping forward/backward. The Play To button lets you play the video through your Xbox 360 game console, if you have one.
Source from: http://www.dummies.com/how-to/content/how-to-watch-movies-on-your-surface.html
Additional Tips: If you do not want rent or buy movies from the Video app, you can also transfer some personal video or movie files to Microsoft Surface RT from your computer.
Once I got some video files on my computer and want to transfer them to Surface RT for playback on the go. While, the Surface RT video format is limited to MPEG4, H.263, H.264 and WMV, so MKV, MOV, MPG, MPEG, MTS, M2TS, MOD, TiVo, VOB are not recognized by Microsoft Surface tablet. I need to format these files first. Brorsoft Video Converter is the app I’m using to help me get rid of the problem. It helps me convert any video to Surface format like MP4 at ultra fast speed with the best quality video.
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P.S. If your movie is still on a DVD or a Blu-ray, you can get Blu-ray Video Converter Ultimate, which can help you rip Blu-ray/DVD, and convert various formats of 720p/1080p HD videos in MKV, AVI, TiVo, VOB, MPG, MTS, etc. to your Microsoft Surface RT, Microsoft Surface Pro and other Android/Windows/iOS tablets/phones for smoothly playing. If you are on a Mac, iMedia Converter for Mac is the alternative.