./vlc --sout "#transcode{vcodec=FLV1,acodec=mp3,sameplerate=44100}:std{access=http{mime=video/x-flv},mux=ffmpeg{mux=flv},dst=0.0.0.0:8080/stream.flv}" ~/media/aladin.avi --loop -vvv --color -I dummy

Patch from Olivier Houchard. Thanks.