What you describe is more or less what Plex does. Plex chooses not to transcode the entire file ahead of time so that it doesn’t waste time/energy in case you don’t need the entire file. Say you start watching a file that would be 5 GB in size if you add up all the chunks, but you stop watching after 10 minutes. By only trnscoding slightly ahead of time, there isn’t too much waste. You can change how far ahead the transcoder works. Settings \ Transcoder \ Transcoder default throttle buffer
However, that only impacts the server side. In order for the client to playback the chunks, these need to be stored in the player memory (aka the player stack). The amount of memory reserved for this is set by the app and is limited, typically in the MB range, so it can only hold a few chunks at a time. It physically cannot hold more data to be able to buffer ahead of time. That’s the way the protocol works. The protocol was designed for live playback, which doesn’t expect data ahead of time so it’s not possible to create a giant memory stack. Transcoding media on-the-fly is not a common thing to do and there isn’t a protocol I’m aware of designed for this. Plex uses HLS since it’s the best fit.
