Apple TV is great if you have an Apple Ecosystem. Phones automatically trigger search boxes when you go to search. Can airplay easily (like if you want to show someone a picture or YouTube video). The interface is sooo smooth and responsive.
But if you aren't willing to use the ecosystem (like having an iTunes server) then you might not find it that enjoyable. Videos must be in MP4 format with either AAC stereo or Dolby Digital (or both). It wont play DTS, or any HD audio. If you rip your own movies, you will want to use Handbrake. If you get movies from online sources than you will need to repackage the video from AVI to M4V. I use Subler on a Mac to do this since it's specifically designed to do this job, not sure what a Windows equivalent would be.
I have a collection of about 1400 movies on a iTunes server and have a pretty good work flow for ripping movies or sourcing online. So it's not an issue for me and I'm used to it. But you aren't going to be able to just dump whatever media you want into iTunes and it just work. You MUST curate your library.
Apple TV will play h265 4K content that you may find online. Again though, you will have to at the very least transcode the audio into 640Kb/s 5.1 Dolby Digital or you can keep E-AC3 if the file has it.....which is rare. I then use Subler and combine the original video stream from the file and replace the original audio with the transcoded audio (a 2channel AAC stream and a 5.1 Dolby Digital stream).
I like Apple TV, we have 3 in the house. But in order to do all that it does, you have to supply it with consistency. The HTPC and other stuff will give you freedom to do whatever, but at the expense of not being as streamlined.
I also have Plex running on my Mac in order to feed our Roku TV's in the house as well as to watch movies away from home, and Plex is totally inferior to iTunes (in my experience...Plex fans feel free to rebut).
I wouldn't say one is inferior to the other, IMO it comes down to how much effort you want to put into it and what features are important.
Appreciate the rebuttal.
Looking back at the statement I made, it was too broad, and was harsh. I meant in regards to the UI. In capability, PLEX is pretty amazing and surpasses iTunes in several ways. When I log in to the PLEX server it has all kinds of random playlists that I don't want and they in turn show up on the clients. I also really like the Smart Playlist function on iTunes that allows for nested conditional statements....I personally haven't come across any software that matches that yet.
An example, I add comments to my music files with something like "4 Star, 90's". And then I create a Smart Playlist called 90's that says add anything with 4 star in comments and 90's in comments. And it auto updates as I add/remove songs or update comments. And then any time I rebuild the server or library, I can instantly recreate my playlists without having to rely on like/star database.
Of course, we'll see if Apple can screw all this up with the upcoming overhaul of iTunes and breaking it up (for MacOS at least).