Apple TV can develop a variety of issues and can stop communicating with your TV, or can become unresponsive to the instructions you give. Most of the time, the issue is software based. Whatever the issue is, there are three methods that normally tend to work. The reset, restart and the factory restore option.
Restart will simply reboot the unresponsive device, and reset will erase the temporary memory to clear existing and current settings so it can start over again. Restore will download a new image of the latest firmware from the Apple Store via iTunes and install it on your Apple TV.
Solution 1: Restart Your Apple TV (If Responsive)
If you are able to use the Apple TV, go to Settings > System and click on Restart. If you own a 3rd or 4th Generation Apple TV, go to Settings > General and then click on Restart. A normal reboot of your Apple TV usually takes care of most problems that could occur. If however it does not help and you still sit there with a unresponsive or half-working Apple TV, try solution 2.
Solution 2: Restart using the Remote (Not Responsive)
If your Apple TV is unresponsive and does not take any further commands, then you will also not be able to navigate around in the menu. This usually happens due to a lost HDMI handshake and can be easily fixed with a simple reboot, done with the remote. To do just that, press and Hold the Menu and Down keys and keep holding them for 6 seconds. The white light on the Apple TV should start flashing and blink rapidly. Let go of the buttons and wait till the devices finished rebooting. This should fix it and get your Apple TV back to working again. In case this also did not help, try the last solution.
Solution 3: Disconnect the Power (Not Responsive)
When solution 1 and 2 just did not do anything, try to simply cut the power to your Apple TV. To do that, just unplug the device and leave it unplugged for at least 30 seconds. Then plug it in again and wait till it finished rebooting and check if the device is working again.
Solution 4: Factory Reset your Apple TV (If Responsive)
Go to Settings -> General -> Reset -> Reset All Settings. This will return the Apple TV to it’s factory settings (as it came when you set it up the first time.
Solution 5: Restore via iTunes (Last Resort)
You will need to connect the Apple TV to a computer running iTunes. Once connected, open iTunes and use the Restore Apple TV option to reinstall the factory image from Apple. This should normally fix all issues you previously had unless the issue is a hardware-related.