I got an new Apple TV (3rd generation hockey puck), and I was watching a movie downloaded from iTunes. An hour and a half in, WHAMO, seized up. After going through reading an encyclopedia of posts, I took the extreme of shutting down my Macbook Pro AND my Apple TV. That worked for the next hour.
In addition, my Airplay screen mirroring did not work either. I have all new hardware, all new software….what gives? I had three clues: 1) 1 hour, 2) AirPlay mirroring never worked, 3) a router that gets hammered by the neighbors.
More reading, until I found a comment about connections and the ATV going to sleep.
So, I decided to go to the Apple TV Settings -> General, and changed Sleep After from 1 hour to Never. All of a sudden, restarting the movie went perfect, noticeably quicker. For fun, I tried AirPlay mirroring, and it also worked perfectly.
I’m not planning on leaving the Apple TV on all the time. I’m not saying this is a “fix.” I’m just posting that this was a simple solution that worked. If this fails me later, I’ll post again. Otherwise, if you find this post, and no update, give it a shot, it takes 10 seconds, no rebooting.