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I would recommend taking a look at the troubleshooting steps found in the article below.
This is what fixed it for me: I changed the native format it defaulted to when double-clicking the file, from Windows Media Player to iTunes.
So, I guess I would say to check that. When you go to the .m4v file and double-click it, what program does the file load in? If it doesn't load iTunes, or load In iTunes, then that could be your problem. At least that's what I found.
Instructions for Windows:
1. Right-click the video file -- it has an .m4v extension -- and select Properties
2. In the Properties dialog, near the top, where it says "Type of file:" and then "Opens with:", click the "Change" button.
3. In the "Open with" dialog that displays, select the iTunes icon and click "OK" (or click "Browse" and navigate to the iTunes.exe, if iTunes isn't in the list).
Result: That action changes all of your .m4vs to automatically load iTunes when you double-click. Once I did that, any movie I play from iTunes always plays.
Let me know if you have questions.