Hello,
VLC is able to do the same as VLS. I guess there could be a problem with the setting of transcoding. VLS streams the file "more simple way" (I guess) and with VLC you use "possibly problematic" transcoding feature.
Try to find a problem, try to use all possible transcoding options and if you were not successful, you could write a bugreport about broken transcoding options to developers.
Or you can use VLS
Albert