Most of my movies are in mkv format. All 1080p with DTS. The codec is h264. So I know Apple TV supports h264 natively but the DTS will be transcoded to DD. Will the video be transcoded and lose quality or will the atv play it natively?
There will be a container change to M4P but otherwise no change in quality as long as you have it set to be 1080p and at least 20Mbps (there are very few MKV's out there that are a higher bitrate than that. The audio will convert to DD as you stated.
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