Zencoder outputs to S3 temporary storage, but not back on to public file system on my site.

Concerning the site: cosystudios.com/shakeldimes.com

So far I have the video module installed (7.x-2.9) & zencoder API(7.x-2.9), along with the video presets which I have webm, flv & mp4 selected.
I have created a video field in my content type (Service) and setup the configuration for zencoder correctly.
Playback is via flowplayer which appears to be working correctly.

My full access zencoder API has been copied across and i see that the storage for completed encodes has changed to a per field selection.

On upload of a video and submission of the node form, I can see in my Zencoder API requests I have 3 successful jobs linking to my 3 file type webm, flv and mp4 along the following lines

REQUEST:
{"api_key":"c62f883e952169c265b63a2eddb65e9c","input":"http:\/\/cosystudios.com\/shakeldimes.com\/sites\/default\/files\/videos\/original\/Basic%20orientation.mp4","output":{"format":"webm","video_codec":"vp8","quality":3,"speed":2,"size":"640x480","aspect_mode":"preserve","upscale":1,"audio_codec":"vorbis","audio_quality":"3","deinterlace":"detect","audio_channels":"2","revert":"Revert","notifications":{"format":"json","url":"http:\/\/cosystudios.com\/shakeldimes.com\/postback\/jobs"},"label":"video-135","filename":"Basic_orientation_webm_1362670335.webm","public":true}}
RESPONSE:
{"outputs":[{"url":"https://zencoder-temp-storage-us-east-1.s3.amazonaws.com/o/20130307/1895...","label":"video-135","id":80940975}],"test":true,"id":40380163}

As you can see, its being posted up on amazon temp storage,
Im not intending on storing video on my own S3 at the moment as it didnt seem that important yet since im not trying to build youtube and ideally i want to get the appropriate files returned back into my public storage after conversion (presumably this has something to do with the postback handler?

I appear to be missing a vital step in the process here. At some point post job, is the drupal video module suppossed to copy to the video off the temporary S3 storage and put it in the appropriate folders in public files. (I can see that video/converted & video/thumbnails have both been created and they contain a folder "135" appears to correlate with the above job, but no files are in this folder and they are never copied over.

Is this something that is handled using "rules"? .. if so how am i to setup this action?
Or possibly zencoder needs write access to files/videos/ and is moving the files to temporary storage because it doesnt have it, but how do i do this?

Have I just missed a final step in the setup?

Best regards to the video team,