Converting VHS Tapes to Apple TV

Hi,
I'm trying to preserve a lot of footage of ballet stage performances from VHS tapes - about 120 hours worth. I've read through all of the forums about converting to DVD, so I've got that. What I'd really like to do is preserve them on an external hard drive and view them on the TV by streaming through Apple TV -- but only if I can preserve the quality.
I've imported one 50 minute tape through a Canopus ADVC-110 into DV format in iMovie. I've tried exporting to Quicktime or mp4 using numerous default compression settings with unacceptable results in quality (compared to the quality of the DV in iMovie). Now I'm trying to export to Quicktime using H.264 with a max bitrate of 4800 bps (Apple TV max is 5000 bps). I think this is as good as I can get, but the estimated time to completion is at 12 hours and keeps growing (I've got plenty of harddisk space and all other applications are closed).
So I'm guessing that in order to accomplish my goal, I need:
13 GB/hour storage = about 1.5 TB (ouch, but I can deal)
120 hours for analog to digital conversion (acceptable)
12 hours or who knows how much longer x 120 hours to compress? (unacceptable)
Am I missing something here? Is there a better way to preserve video quality as an .mp4, .m4v, or .mov file? Or should I just give up and burn everything to DVD?
Any suggestions appreciated. Thanks in advance.

Welcome to the forums.
A few thoughts about your desired objectives:
a) Will you want to edit the footage in future? (Keep the original tapes and/or use a digital format with very little compression - like .dv, and/or export the converted video to miniDV tape since it is full quality but smaller physical size)
b) Will you want to share footage with others? (DVDs are hard to beat)
c) Do you want maximum flexibility? (see (a)
If you're happy with the .dv option for flexibility and/or editing, then the challenge you look like you're facing is how to view your video. Obviously, Apple TV is one option, DVD is another. For video conversion, I've had good experience (speed and quality) with Visual Hub, Roxio Toast, and the free MPEG Streamclip. Processor speed is important for video conversion, so you probably want to use your fastest computer.
You might check whether DivX format is supported via Apple TV. It's a high quality but very compressed format - good for viewing/not good for editing in future.
To establish a workflow, I'd create a short test video of representative footage and then monitor how much time it takes to convert into the various video format options.
John

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