Similarly to most of you, I started having this problem after the last update (or the one right before that, can't remember). The "1" is stuck there telling me I have to "update my ID settings" and I've tried everything I could possibly try but it's definitely the software. Interestingly, this problem leads my TV provider to reply with a message of "you have reached the maximum streams, disconnect one of them..." when the only thing playing is the TV, so it would appear the Apple TV is connecting to something but when it logs out and it's time to log back in again, it drops the connection/won't connect properly. Only after a total reset of my internet, signing out and in several times (probably erasing cache), etc. will the Apple TV work and let me watch TV on my TV.
However, and funny enough, I can watch all the TV I want on my ipad and I can AirPlay to the AppleTV without any problems whatsoever, so obviously the problem is localized to the AppleTV itself and in it, it's something to do with something that was recently changed in the software. You can reach your own conclusions but I think the latest OS for apple TV needs a fix and fast