Optimise function not working

I have just started using Plex server on WD MyCloud Ex2 Ultra NAS

I need to convert a number of Videos currently stored in 1080p H264 Mpeg4 files with bit rates around 24Mb/s to reduce the data rate as the google Chromecast playback device stutter and the NAS cannot support transcoding.

So I tried to use the OPTIMISE function, it processes the videos and creates a new folder with the new file in but it is completely unchanged no matter which settings I chose (I tried optimise for Mobile, TV and Custom 720p 8Mb)

A second problem… when I tried a 2nd conversion of any file the optimise progress window says its complete but NO file is produced.