Apple TV bandwidth problem

Plex Apple TV app connects to Plex server as remote connection. Throttling bandwidht and forcing transcoding. Although both server and Apple TV are on the same network.

Only have this problem when connected via ethernet. If I disconnect the ethernet cable from my Apple TV and connect via Wifi the connection is recognized as local and videos play at original quality. So, how can I connect via ethernet and have the connection recognized as local instead of remote?

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