Optical cable from Macbook to Hi-Fi. No Audio

Hi Guys
Help required. I want to listen to my Itunes and movies from my macbook via my HI-FI speakers. I've connected a Sandstrom digtial optical cable from the macbook (white) to my Panasonic SCPM29 HI-Fi (with optical out) but there is no audio coming out of the speakers. Input is set to AUX on Hi-fi.
Helpful pictures included.
Any ideas
Thanks
Sandstrom from macbook
Reverse of Hi-Fi with sandstrom cable in optical out port

I updated tonight and I now also have no audio in any way - I don't even get the remote clicks. Looking through these forums, it looks like this is a problem every time Apple TV updates? Anyway, I tried to follow a suggestion in another thread to connect to my computer and restore the previous firmware version but iTunes doesn't recognize the device (device driver installed fine but it doesn't show up in iTunes or as a USB device in My Computer (I have a PC)). So, maybe I'm doing something wrong but I'm a little annoyed that I now apparently own a $100 puck. Has anyone found a solution since the last time or any really simple instructions for rolling back an update? I won't be able to get to an Apple store until Tuesday and my blood pressure goes up now every time I look at the little box sitting there totally useless....

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