VLC is a very powerful media player which has tons of options and can play almost every media file. In this how-to I will demonstrate how easy it is to set up an HTTP audio/video stream. VLC supports other streaming methods (RTP, UDP, …) as well, but HTTP is the easiest and most compatible one.
Another great thing is that VLC is available for all major operating systems. This how-to is based on the Windows version (1.1.11), but I have also tried it on Mac OS and it worked just as well. However, for some reason the menus look completely different and the options might have slightly different names. So if you want to set up your stream on Mac OS or Linux things will look a bit different.
Setting Up The Stream
To open the streaming wizard click [Media] –> [Streaming...]
Click the [Add] button and select a VLC playlist (filetype: xspf) that you have created before. You can also select one audio or video file instead but multiple entries will not work.
Click [Stream], check your source/input file again and then hit [Next]
If you want to have your stream played back locally while it is being streamed, check the [Display locally] option which is located on the [+] tab. Alternatively you can just open another VLC instance and connect to your own stream later on. In the dropdown box select [HTTP] and then click [Add]. You can change the port and path if you want to but the standard configuration is fine as well. If you select [Activate Transcoding] your input data will be re-encoded on-the-fly. Make sure that you apply a compatible profile: for an audio stream [Audio - MP3] would probably be good, for a video stream you might wanna choose [Video - H.264 + AAC (MP4)] instead. Maybe you have to trial-and-error a little bit to find the optimal settings. But keep in mind: to re-encode a video stream you need a powerful computer and depending on the output stream’s quality you need a corresponding bandwidth. However, if your input stream already is in a compatible format you can leave the transconding option unchecked. Finally, click [Next]

In the last step just leave everything as it is and hit [Stream]
Now your stream is live and other computers can connect to it. Depending on the display locally option you will see/hear your stream playing or not. Apart from that you can verify that your stream is playing by looking at the progress bar; it should be moving.

Connecting To The Stream
Click [Media] –> [Open Network Stream...]

If you’re on the same computer from that you are sending the stream, enter http://127.0.0.1:8080 and click [Play] to connect to it. On another computer that is located within the local network you have to use the LAN IP of the sending machine. Outside this network (from within the internet) you have to use the external IP of the sending machine (the router’s address); this however will only work if the router is NATing properly.

Now the stream should be playing. The progress bar won’t move but in the bottom-right corner the time should increase indicating how long you have been connected.

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