Symptom
This error message can be seen in Device Director on a faulted XCode job.
The cause is in most cases that the input media file contains variable frame rates and for this reason, XCode isn't able to transcode it.
Resolution
Unfortunately there is no plan to change XCode to accept these types of files (see internal issue XCD-370 for details).
A fix should be to have the file transcoded into another format using another engine such as Vantage to fix the frame rate in order for XCode to accept it.