ISO media files

[TheDreadPirate]

Kodi only does playback of local or network shared files. It can't send files outside of your network. It's a player and not a server. Kodi also has a limited client range. Jellyfin the server also adds the capability to transcode for devices that just don't have the grunt to software decode. Android TVs, Firesticks, Rokus, older devices. But there is also the option to allow software decode for powerful desktop clients. You can even use Kodi with Jellyfin as a server.

And you are making big assumptions. A lot of us, me included, rip our own media and spend a lot of time encoding to maximize both quality and space savings.

Some people just straight rip their discs and don't touch it. Can't get much higher quality than that.