Ive noticed that videos that would otherwise be direct streamed, will be transcoded when one choose to use SRT subtitles with them. What is a little weird is that (atleast from my experience) is that if I turn the subs off, the movie is still being transcoded. Not until I start a different movie, stop it and restart the initial movie without subs, is it being direct streamed.
Ideally, the app would support overlayed SRT subs but I guess that would be up to Sony. If thats not supported, the app should atleast switch from transcoding to direct streaming as soon as one turn the subs off.
It would also be beneficial if the app itself tells us how its playing the movie. For example in the Play/Pause menu one can toggle while the movie is playing.