I had this same issue with on one of my Ethernet connected Apple TV Gen 3. I think the issue occurred after the last update, but why only on one and not the other? The main issue it caused me was that I was no longer able to search within Netflix (although I could browse and play movies and TV). Also I could not access my favourite Podcasts but again I could browse and play them.
After a lot of resets and restores, I was able to resolve the issue by disconnecting the Ethernet cable, and connected to WI-FI (the first time I had used WI-FI for my Apple TV's), restart the Apple TV and allow it to Activate amazingly it activated immediately. I was now able to search in Netflix and use my favourite Podcasts.
Once I had confirmed it was working I reconnected the Ethernet cable and it's all still OK.
I'm hoping that Apple resolve this fault before it happens to me again.
Amazing. Thank you for posting.
Upgraded software and was unable to activate or connect to photo streaming. Once I disconnected the wired LAN and reconnected through WiFi everything connected. Who knew?
Glad you did.
5 stars to whoever figured this out! Soo gald I stumbled on this post! Been pulling my hair out for days trying to get my ATV to stop acting up. Couldn't search in Netflix, couldn't get past "Activating..." when renting movies, and other wierd crap. UNPLUGGING THE ETHERNET and then doing a factory reset did the trick! Thank you Thank you Thank you.