My 3rd generation Apple TV (with iOS 5) has some problems streaming media. First noticed it with NetFlix; the stream would pause for about 30 seconds every couple of minutes. iTunes Match had a different problem; after playing about 10 minutes of music, the screen would go blank (my TV started searching for different inputs, so I think the Apple TV’s output signal completely died), then return to the Apple TV home screen. I haven’t had any problems using NetFlix or iTunes Match on my computer, so I assumed the wifi (an Airport Extreme) and Internet connection weren’t to blame.

Finally seem to have tracked down the problem (or at least, one of them): it’s something in the Dolby Digital output. Go into Settings/Audio & Video/Dolby Digital and change the value to Off. I have my Apple TV hooked up to a receiver via an optical cable, so I’d turned this setting on to get surround sound. Since disabling, I’ve been able to listen to entire albums on iTunes Match for the first time—they had never made it past the 10 minute mark before. Here’s hoping a software update will fix this issue and restore the surround sound feature…

Update: Spoke too soon—just dropped the audio stream again, though it’s definitely not happening as consistently as before. *sigh*.