The VideoLAN Forums

Most high bitrate MKV files will not play acceptably from iMac via older version AppleTV on even on local hardwired (ethernet +WiFi) networks. They will play fine only when re-encoded to AppleTV 3 standard (HandBrake). My hope is that with all that space available on new Apple TV that problem should be now resolved by just preloading the media file directly to Apple TV and playing it from there. Not sure however QT and iTunes or generally Airplay have that capability now. The question is can VLV for tvOS do that, that is download the file first in its entirety when satisfactory playing when streaming from external sources is not possible. I read somewhere that memory on Apple TV is under exclusive control of tvOS with no local (at least permanent) storage possible for 3rd party app. So is preload either temporary or permanent possible with current version of VLC?

Yes, see the Remote Playback feature of VLC. While it automatically starts playback after receiving 10% of the total file size, you can cancel playback and it will upload and store everything you throw at it until internal storage is full. Note that the Apple TV operating system may delete any stored media during storage pressure.