1.) Locate this folder on your PC...
C:\Users\(your computer name)\AppData\LocalLow\Departure Interactive\Denizen\

2.) Notice there are some folders here. One is called "Music", and another is called "Videos"

3.) Copy MP4 video formats in the "Videos" folder (I managed to try out a few other formats. Along with MP4, you can use AVI and MPG/MPEG seem to work fine, however I could not get MOV files to work, yet it shows you can possibly use MOV format. For the record, I was trying out an old MOV file format from an old 1995 CD for Windows 3.1 which has MOV video files. FLV files will not show up on the list. I doubt other formats work, but I will further investigate this. The formats I have not tried are WMV, MKV, and other odd formats. )

4.) Copy MP3 files in the "Music" folder

5.) Start Denizen, once you're in the game, go to the store that sells flatscreens and stereos and buy one of each

6.) Once you have purchased a flatscreen and stereo, head to your home and place your flatscreen and stereo where ever you would like in your home

7.) Once you have placed a flatscreen, walk up to the flatscreen and use your flatscreen and it will give you a list/menu of movie files you have copied in the folder mentioned earlier, choose a file and the movie will play

8.) Use your stereo and it will give you a list of MP3 files you have copied there, choose a file and the song will play

9.) Enjoy.

This ability was possible on build version 0.25.5. I am mentioning this for reference in case the devs decide to remove this feature in future builds for some reason. I don't think they will, but you never know. It is still in early access.