The second and third generation Apple TV only has one small LED light, but the light can indicate several different things. Below is a quick guide to give an explanation the different things the light can indicate.
The Status Light:
Is Glowing -> Indicates Apple TV is ON.
Is OFF -> Indicates Apple TV is in stand by mode or OFF.
Flashes Once -> This means it’s accepting a command from the remote.
Flashes Slowly -> This occurs when the Apple TV is starting up.
Flashes Three Times -> This means the Apple TV is rejecting a command from the remote (possibly because the remote has not been paired with Apple TV).
Continuous Quick Flashes -> Indicates a problem with your Apple TV. Try restarting or waking your Apple TV. You can also try resting your Apple TV by holding Menu and Down for six seconds. If your Apple TV still does not start up properly, you might need to restore it to factory settings.