Yes this is why I bought an AppleTV to get the proper Atmos PCM stream from any major streaming service.
But the amp is displaying Atmos/PCM when receiving eARC sound stream from the TV app. How is this possible ?
PCM signal carries already decoded Atmos over HDMI cable. This means that TV app unpacks (decodes) the file, plays video and sends audio wherever you set it to, built-in speakers or via ARC/eARC to AVR as PCM signal. AVR does not do decoding here, just receives and converts digital audio signal (PCM) sent from TV into analog, amplifies it and sends to speakers. Both lossy and lossless audio, stereo or multi-channel, could be sent as PCM signal. The
content of PCM signal depends on what original movie file contains in itself and device capability on either end of the chain.
Now, if a streaming video file contains lossless audio and is handled by internal TV app, lossless audio cannot be sent out from TV's app, as TV's chipset, where apps are installed, does not have wider, native eARC output channel, so bandwidth is not enough to push Atmos over DTHD or DTS:X out of the app. It is enough though for Atmos over DD+. Whatever the internal TV app can output over HDMI cable, it is still PCM signal, regardless. ARC channel is 2-3 Mbps and eARC has bandwidth ~37 Mbps. Perhaps TVs chipsets in 2022-2023 will bake native eARC channel into boards. They should, finally. That's why Plex app on TV cannot output lossless soundtrack and Plex on Shield or other external source can, as it is connected to usual HDMI input on AVR, so full bandwidth, or to TV's HDMI input and lossless audio bypasses internal TV's chipset via eARC.
Streaming online services provide Atmos over DD+, as it saves bandwidth and effort. Lossy (still good though) Atmos over DD+ takes 2-6 Mbps and lossless Atmos over DTHD takes 6-18 Mbps of bandwidth, so more work for encoders. Streaming files from home server or NAS should be played through external device connected to TV+eARC or AVR directly to get lossless Atmos.
PCM is separate from codecs. It just a digital representation of analog waveforms. Audio is generated and manipulated in PCM. Both PCM and Bitstream are capable of producing the same audio quality, and the only difference is how your setup decodes the compressed file. Compatibility with devices and supported frequencies are bigger factors to consider than sound and transmission when choosing between PCM and bitstream.
Lossless soundtrack from external sources:
1. Player set to PCM - player decodes files, converts into (L)PCM signal and sends it over HDMI cable to AVR
2. Player set to Bitstream - player reads files from UHD disk and sends raw unpacked signal over HDMI to AVR for decoding
Below is a diagram of LG C9 chipset. It shows why internal TV apps cannot output lossless audio. I hope this answers your question.
