h264 is designed for streaming and forwards playing movies, that dont require fast random access to each frame.
it is totally unsuitable for use with any media server that needs quick access to any frame within a clip. like other mpeg based formats mpeg1, mpeg2, and mpeg4, it uses forwards and backwards interframe compression. which might reduce the movie size - but it useless for this application - it leads to long frame decode times, and poor performance with any kindof looping.
do not use h264. do not even think about using h264.
