Slow streaming of rentals and purchased content

We seem to be experience slow streaming from our Apple TV2. The last movie we rented on our account we were unable to watch "instantly". After ~5-10min of initial download of the Hunger Games we were able to watch 5 minutes of the movie and then it stalled. After waiting a further ~5-10 minutes, we gave up, and ordered the movie on demand (in 1080p HD) from our cable provider with instant and stall-free streaming.

Our Apple TV is connected to our Time Capsule through ethernet cable and is directly connected to our cable modem

Our internet subscription provides speeds of 40-50 megabits/second consistently. I have set the HD content on the Apple TV to 720p to hopefully mitigate this issue.

What do you think could be the problem?

Are there any solutions?

We are begining to question the use and benefit of the Apple TV if we are unable to use it effectively.

We also experience the slow streaming experience from purchased content. We have purchased some TV shows through iTunes and have tried to play them from the Apple TV and it seems to take an excessively long time to queue up (~5-10 minutes).

Looking forward to some helpful suggestions.