There's a much simpler solution. I understand the matter of simplification for those in your household who like the AppleTV interface, however you can easily cutout the AppleTV and simplify everything to just a Synology DS and a Mac Mini, run
VLC on the Mini with a direct link alias to your Synology Movies folder, and run the movie file in
VLC. Done. Restricting yourself to Apple's formats will only be regrettable down the road as your digitized media will be lossy, creating as lossless an encode/transcode as possible will "future proof" your media.
As I had a lot of Blu-Ray media and 2 Mac Pro's, I wanted to achieve as lossless an encode/transcode as possible. I spent 6 months using one Blu-Ray and learning everything I could on
Handbrake (the BEST and only app you should ever use for film encoding). I studied the forums carefully and produced many various encodes of the same Blu-Ray movie using Handbrakes "Advanced" settings. I played each film on the same system (at the time was a Pioneer Plasma, I had two side by side) and compared it to the original. I was finally able to get a Blu-Ray film with DTS-Passthru with additional audio tracks down to 4-10GB's. (
NOTE: The first audio track of any movie needs to be stereo for iDevice's, then AC3/DTS/etc tracks can follow, as many as you want).
Once I was satisfied with the results, I saved the preset and made another for 720P. It took me about a year, a few rips a week, for my 1000+ film collection to be digitized. The problems with using the current AppleTV are lack of full codec support. This was especially important for DTS sound on Blu-Ray files. In no way was I going to reduce the quality of my movies to appease Apple's formats; they're limiting and years down the road you will regret it.
The best option was to use a Synology DS and a 2012 Mac Mini connected to my AEBS using CAT6 cables (CAT5e should work fine for most, but if you have CAT6 cables, use them). On the Mac Mini, I only have iTunes and
VLC on the dock and created a shortcut to the Movies folder from the server on the desktop and as a Stack on the Dock that automatically mounts when rebooting the Mac Mini (if you have to).
VLC (free) is the best media player for Mac and Windows, highly recommend it. I placed each film in its own folder with the name of the movie, so scrolling through Finder in OS X is simple. No need for a GUI other than OS X. HDMI goes into my Pioneer AVR and feeds into my flatscreen. Using Harmony Smart Control (or Universal Remote RF/IR systems) makes it easy for anyone to open a movie on the Mac Mini. Best of all, each film has subtitles, numerous tracks such as commentary and full pass-thru surround sound tracks, all of which can be selected in
VLC. Set
VLC as your main media player (select a film, "Get Info", then "Open with" and select
VLC, do this for every format: mkv, m4v, mp4, mov, avi, etc).
Bottom line:
- Synology Server (best as it's browser based DSM 5.x software has many free packages that allow streaming away from home using "Quickconnect")
- Mac Mini
- CAT6 cables
Synology will host your media, configure your Mac Mini to auto-mount it upon boot and create links to the Movies folder on your server to the Mac Mini.
Use VLC for your media player.
Do not encode/transcode your media based on Apple's spec's. Long term you will regret this as you will lose quality.
Create as lossless a rip/transcode as possible using the free app "
Handbrake" and spend time finding what settings work best for your needs and save the final preset. Rip your media (use pass-thru for audio, make sure first audio track is stereo for iOS, then add as many as you want). Include subtitles (Subler is the best app for seeing what a movie file contains, movie files are just "containers" that hold your audio, video, subtitle and chapter info. You can add or remove such without recoding the file), and done.