I suggest you try what you have now. The encoding of the video is, well, widely discussed so I'll share a tool I use and will not duplicate the prior discussions for now.
Hi all, I have a LG 55LM640T-ZA 3d tv, and I would like to play tv programs/movie files through a USB or an external hard drive. Which is my better option? Ideally would like to get a external hard drive but what I would like to no is can I go for any brand/type/ size etc.. what would be y best option. Also can the LG's play avi files or do they have to be certain types to play? I heard something about only playing mkv's with ac3 sound? I hope not as most of my files are .avi's.