I had exactly this problem with blocky playback after I upgraded from
14.04 to 16.04. It affected all movie file types and any player that I
tried. After reading this report I replaced the nvideo driver 361.42 by
the previous version available (340.96) - and the problem went away
completely.

By the way (and I don't know how to report this so if some kind soul
could do the necessary that would be good): Additional Drivers in
Software and Updates, when invoked, states that No additional Drivers
are in use. This is clearly false much of the time, as when it has done
a search it then reports those that are in use. It should say: I don't
yet know if any additional drivers are in use - please wait while I
check. Not a life-threatening bug I agree, but careless coding makes it
look silly.

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https://bugs.launchpad.net/bugs/1512993

Title:
  VLC exhibits blockiness on h264 seeking

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