How to enable direct play?

I finally got my media automation all set up on my unread server, which runs Plex. My client is a shield TV. When I went to play a movie on the TV it told me I was initiating an indirect play. How can I make it be direct play? I read some thread that suggested allowing unsecure connections on the local network. Is that the best solution? The server and the client are both hooked up to a same Ethernet switch.

On another note, my server has an i36100 and 8 gigabytes of RAM. I've allocated 3 GB of RAM for transcoding, is that enough for one 1080/10mbps stream?