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I loaded up the Dolby test file encoded in DD through iTunes home share. Worked as expected with each channel producing the right sound and getting 5.1 surround out. Are your files encoded in Dolby Digital/AC3? Is your receiver at least lighting up in Multi Channel In or something to that effect?
My movies are coded correctly and play perfectly on my ATV3. The receiver doesn't even show MultiChannel In, it shows Stereo and only my left and right channels play sound, the center, sub and surrounds get no love. I am baffled.
 
When on Auto my Pioneer receiver shows it's receiving PCM 7.1 for movies (Netflix, HBO, purchased movies) surround sound comes out from my side surround speakers and not my rear surround speakers as the ATV is only decoding 5.1. I have not found a title with 7.1 channels to test. When playing music, Hulu, Showtime only get stereo sound but can set the receiver to upmix to Dolby Pro Logic IIx and I get sounds from all speakers.

When on Dolby Surround - when playing (Netflix, HBO, purchased movies) surround sounds come out from all speakers and receiver shows it is decoding Dolby Digital 5.1, however when playing stereo sources music. Hulu, Showtime the receiver also displays it is receiving Dolby Digital 5.1 but sound comes out left & right speakers and can't upmix to Dolby Pro Logic IIx.

In the specs it does show ATV 4th generation can decode Dolby Digital 5.1 & Dolby Digital Plus 7.1
 
I have not found a title with 7.1 channels to test

Terminator Genisys on iTunes is supposedly is 7.1 per the listing specs, but my system isn't 7.1 so I can't confirm. That's the only 7.1 title I've found so far.
 
I'm having sound issues I see other people are having too. Set up the ATV4 connecting HDMI to my Denon receiver just like the ATV3. Go to play music and it doesn't default to Stereo as the ATV3 did. Also, playing any of my own movies or anything from Netflix, HBO GO, etc. doesn't send Dolby Digital surround to my receiver. Tried changing the Audio settings to Auto and Dolby Surround, restarted the ATV, same problems. It just doesn't work. Plugged my ATV3 in and everything works perfectly. Hardware/software issue? It's bothering me.
 
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Movies I have ripped into iTunes from DVD's. So I go into the 'Computers" app and go into my Movies section. I have tried many and all are playing as stereo.

I have an older denon myself that doesn't do HDMI switching. I ran HDMI to the TV then optical out. I was only getting stereo signal. I went into sound settings the apple tv and changed surround mode from auto to Dolby Digital, just as the thread starter suggested, and the receiver would switch to DD when the source material was encoded as such.
 
I have an older denon myself that doesn't do HDMI switching. I ran HDMI to the TV then optical out. I was only getting stereo signal. I went into sound settings the apple tv and changed surround mode from auto to Dolby Digital, just as the thread starter suggested, and the receiver would switch to DD when the source material was encoded as such.
Thanks. I got it sorted out last night. It was a setting on my Denon I was missing. Changed the setting and now stereo comes thru as such and dolby comes thru as such. I am a happy camper.
 
OC513: What was the setting? I haven't changed anything on the receiver side and would like to know. Thanks.

in my case it was a setting on the Apple TV. Settings - > Audio & Video - > Surround Sound - > Dolby Surround

was set to Auto initially and only sent over stereo signal. Receiver will switch over to DD now if the content is encoded with it.
 
Right. I tried both Auto and Dolby Surround, restarted the ATV and the receiver. Same exact thing happens. Plugged the ATV3 in and all the right things happened. Don't know what's going on there.
 
OC513: What was the setting? I haven't changed anything on the receiver side and would like to know. Thanks.
The input I was using (Blu Ray) had never been used before and wasnt set up correctly. When I changed the setting to Movie, instead of Music, it started working perfectly and even switches back to stereo when I play music. This is on a Denon AVR.
 
Interesting. I'm pretty sure I tried every combination of settings and it still hadn't worked properly. I'll play with it after work. It definitely isn't working as the ATV3 was where I had the Audio set to Auto and the receiver just took the source be it Stereo music, Netflix Dolby Digital, my own ripped movie Dolby Digital, etc.
 
Interesting. I'm pretty sure I tried every combination of settings and it still hadn't worked properly. I'll play with it after work. It definitely isn't working as the ATV3 was where I had the Audio set to Auto and the receiver just took the source be it Stereo music, Netflix Dolby Digital, my own ripped movie Dolby Digital, etc.
Mine wasnt either until I changed that setting. Hope it works for you as well. Are you using a Denon or Marantz by chance?
 
So you have the ATV4 set to Auto and on the receiver you changed the Audio setting to what exactly on the HDMI input the ATV4 is connected to?
 
From another posting about surround sound and the 9.1 Beta. There's definitely something wrong with the device or the software.

john991 said:
Anyone try the 9.1 beta of tvos yet?
Click to expand...
It's much better as far as speed and fluidity. But it messes with your surround sound if you have one. Had to downgrade just for surround sound functionality.
 
I'm also strangely getting the surround sound 7.1 with files that don't have that I don't have that either.

Wish they would have fleshed more of this stuff out first.
 
And from the Apple forums:

Hey guys,
You're not alone, and no it is not your systems! I have several un-resolved bug reports filed with Apple on the Apple TV 4 not being compliant with Dolby Digital audio. (I have a couple of surround sound music apps in the iOS and tvOS Stores, and this has been a real kick-in-the-pants for me to deal with, to put it mildly.)

Just chiming in to say you got to send Apple your feedback on this (Phone, feedback, bug reports, etc.) so they will know that there is a problem going on.

Cheers
 
Haven't tried Plex yet. I am having the problem with my own files (music and movies), Netflix, HBO GO, Hulu, Showtime Anytime. Basically every app I use to stream media.
 
So you have the ATV4 set to Auto and on the receiver you changed the Audio setting to what exactly on the HDMI input the ATV4 is connected to?
I held down the "Movie" button on my remote and chose Dolby from the pop up menu. Since I did that its working perfectly. Prior to that all sound, no matter what source, was coming out as stereo, only left and right channels; no sub, center or surrounds. It was like I had to tell that input I would be throwing different sources at it. I had never had anything plugged into that input before the ATV4. Hope this helps you resolve it.
 
I entered HDMI hell last night when I had everything going pretty smoothly and then opted to try to use my Denon X2000 as audio source in the ATV 4 settings, not thinking ahead that would just kick on the airplay interface on the Denon.

Somehow trying to get back to ATV, it completely jacked up HDMI settings so that EVERY. SINGLE. BUTTON PRESS. made it switch from the HDMI input it was on and I had to switch it back. I could swipe on the apple remote, but any press made the HDMI switch.
ATV3 would work perfectly fine back in the chain but had to factory restore the ATV4 and it still did it, so must have been Denon somehow. Finally futzed around in the Denon HDMI settings and got it kinda working normal (maybe some HDMI-CEC) setting but still not sure.

May have to download latest firmware on Denon and factory reset it to start over. It was horrible.
 
Add me to the list of people seeing the same issue. I'm 99% sure it's the Apple TV not outputting in the correct formats and not an issue with people's AVR.

When set to "Auto" my AVR shows 7.1 PCM as the input if the source is surround sound (DD or DD+). If the source is stereo, then it switches to 2.0 PCM.

When set to Dolby Digital, everything comes out as Dolby Digital 5.1 including stereo content. Stereo content is output to the left and right front channels, but since the AVR sees it as DD 5.1, I can't use Pro Logic II or other options to process it for surround.

Ideally Apple will update the Apple TV so that we have the option to output DD and DD+ as bitstream and stereo content as 2.0 PCM.

However, there might be a couple of reasons why Apple is decoding the bitstream internally and outputting surround as PCM:

The Apple TV can now do Dynamic Range Reduction (They call it "Reduce Loud Noises"). If the Apple TV outputs the direct bitstream they would not be able to do this and it would be up to the AVR to handle this feature (called "Late Night Mode" on my Onkyo).

Dolby has a real time encoding process called Dolby Live. This is used on all gaming consoles and it allows the multi-channel audio, which changes dynamically during gameplay unlike a movie that never changes, to be output as a Dolby Digital 5.1 bitstream. However, I don't believe that Dolby has a solution to encode Dolby Digital Plus 7.1 in real time yet. The Apple TV needs to be able to encode the audio in real time in order to add the system sounds (beeps and such when you navigate the menus).

I believe that when the new Apple TV is in Auto mode, it always decodes the bitstream, processes for "Reduce Loud Noises" if enabled, and mixes in any system sounds before outputting as 7.1 PCM or 2.0 PCM.

When the Apple TV is set to Dolby Digital mode, the Apple TV decodes the bitstream, processes for "Reduce Loud Noises" if enabled, and mixes in any system sounds before processing with Dolby Live and outputting as a Dolby Digital 5.1 bitstream.

Anyway, that's my best guess as to why the system behaves the way it does now. If that's the case, I'm happy to have an option that will allow me to forego the "Reduce Loud Noises" and system sounds if I can have the Apple TV output a bitstream.
 
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Add me to the list of people seeing the same issue. I'm 99% sure it's the Apple TV not outputting in the correct formats and not an issue with people's AVR.

When set to "Auto" my AVR shows 7.1 PCM as the input if the source is surround sound (DD or DD+). If the source is stereo, then it switches to 2.0 PCM.

When set to Dolby Digital, everything comes out as Dolby Digital 5.1 including stereo content. Stereo content is output to the left and right front channels, but since the AVR sees it as DD 5.1, I can't use Pro Logic II or other options to process it for surround.

Ideally Apple will update the Apple TV so that we have the option to output DD and DD+ as bitstream and stereo content as 2.0 PCM.

However, there might be a couple of reasons why Apple is decoding the bitstream internally and outputting surround as PCM:

The Apple TV can now do Dynamic Range Reduction (They call it "Reduce Loud Noises"). If the Apple TV outputs the direct bitstream they would not be able to do this and it would be up to the AVR to handle this feature (called "Late Night Mode" on my Onkyo).

Dolby has a real time encoding process called Dolby Live. This is used on all gaming consoles and it allows the multi-channel audio, which changes dynamically during gameplay unlike a movie that never changes, to be output as a Dolby Digital 5.1 bitstream. However, I don't believe that Dolby has a solution to encode Dolby Digital Plus 7.1 in real time yet. The Apple TV needs to be able to encode the audio in real time in order to add the system sounds (beeps and such when you navigate the menus).

I believe that when the new Apple TV is in Auto mode, it always decodes the bitstream, processes for "Reduce Loud Noises" if enabled, and mixes in any system sounds before outputting as 7.1 PCM or 2.0 PCM.

When the Apple TV is set to Dolby Digital mode, the Apple TV decodes the bitstream, processes for "Reduce Loud Noises" if enabled, and mixes in any system sounds before processing with Dolby Live and outputting as a Dolby Digital 5.1 bitstream.

Anyway, that's my best guess as to why the system behaves the way it does now. If that's the case, I'm happy to have an option that will allow me to forego the "Reduce Loud Noises" and system sounds if I can have the Apple TV output a bitstream.

I'm pretty sure that's what's going on too. I think the only bug is it incorrectly flagging stereo sources as 5.1. Although I'm not entirely sure it should be outputting 7.1 PCM channels for a 5.1 source.
 
I just posted on this issue as a separate thread: https://forums.macrumors.com/threads/plex-movies-surround-sound-oh-my.1935143/

Sorry, didn't realize this thread was about the same issue. As I posted in the other thread, I have all of my local files transcoded to mp4 (h.264 with audio track #1 AAC stereo and track #2 AC3 DD 5.1). I don't think the aTV4 is picking up the track #2. It just takes track #1. Did not have this problem with the aTV3, so I think it's a aTV4 issue. I just installed Plex and it picks up track #2 just fine. I do have to set the aTV4 Audio Surround setting to Dolby Digital, instead of Auto. But I think that is the way I had my aTV3 set up as well.
 
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