Playing MKV file from local HDD is never a problem for WD TV Live Hub. The problem is MKV streaming over the Internet, like this post-
“I can watch every other file format on my pc through the network on my new WD Live Player but for some reason it says file unsupported when I try and play a .MKV movie?
I can take the same file and put it on my external hard drive and plug directly into the WD Player and it plays perfect …. but not through the network for some reason!!!
Please help me figure this out cause the whole reason to upgrade from the first WD player to this one was to watch all my .mkv movies without having to transfer them to my external hard drive and watch it that way!” – from AVS forum
Basically, with DLNA media devices (e.g.WD TV Live Hub, Popcorn Hour NMT) there are certificates given to each product that receives DLNA approval. The problem is that .mkv is not one of the media options that are categorized because it’s not a sanctioned format (not like WMV, MPEG, etc.) Besides, MKV is a flexible container format which can store just about anything (H.264, DivX, MPEG, any sort of audio, even menus and subtitles) while WMV, MPEG is more or less complete formats so they know what to expect while with MKV’s you really can’t tell without checking the contents itself.
Although most people meet with very limited success streaming .mkv files from NAS to a DLNA-certified HDTV, it is reported that many have good luck when streaming H.264 .mkv with AC3 audio. DTS audio in .mkv may results in av sync problems so it is advised to be converted to AC3 or AAC before streaming MKV. Anyway, the best way solving this problem is streaming .mkv while transcoding the file on the fly with media server like Tversity. Despite that, you may receive error message when streaming .mkv to WD TV Live Hub. In that case you’re suggested to convert .mkv to DLNA sanctioned format, e.g. H.264 .mp4. The following guide tells you how to convert .mkv to H.264 .mp4 video with AAC audio included for streaming to WD TV Live Hub(click to find a detailed guide).