From their forums:
We introduce a great upgrade to video playback experience for our iOS and Apple TV apps! Up to now, we rely on Apple's AVPlayer for video playback. It was an easy solution, but very limited in many aspects. But now we have supported MPV 3: the same highest video player we have in Plex Media Player, which will result in sharper video output and improved text support.
The new player is still experimental and we plan to make it available to everyone, but for now it is available to Plex Pass Holders as a Preview Preview. You can turn it on and off at any time in Settings -> Advanced.
With this new video player, the apps can play many more video formats without re-encoding. This also includes a new custom VCR user interface in the Apple TV app that supports support for thumbnails, correct audio and subtitle playback during playback, and some other things we'll add in the near future. We have also gained more control over our playback pile.
Finally. I've been waiting for this for a long time.