Hi,

This is probably a limitation in Unreal 5, that Unreal 5 in DirectX12 can not playback your virtual screen's video format.
I suspect this based on this forum thread: https://forums.unrealengine.com/t/media-textures-wont-display-video-in-ue5-preview-1-while-using-directx-12/503980
Your virtual screen will probably work if you target DirectX 11 in Unreal Project Settings:

Also, we suggest using Aximmetry to play the virtual screen's video: https://aximmetry.com/learn/tutorials/for-aximmetry-de-users/setting-up-a-virtual-screen-in-the-unreal-scene/ this way you shouldn't run into your error and you can use DirectX12. And this way Aximmetry provides several ways to modify and control your virtual screen's video.

Warmest regards,