You'll have to check to see if your TV allows for 5.1 pass through. A lot of TVs don't. I've also found Netflix content is hit or miss on being 5.1, but still, it might be your TV. Just because it has it on one of its apps doesn't mean it'll pass it along through HDMI to optical.

But I guess if that's the same way the fire is connected it should be fine.

How is a sound bar 5.1? I don't get it.

Nexus Player supports 5.1 just fine. However a lot of TVs (and receivers) don't support passing through 5.1 signal over ARC, so that's probably why it doesn't work. Check your TV manual / internets to see what your TV and soundbar support.

Wait shouldn't the tv be connected to the soundbar via arc then the Nplayer to the tv on a different hdmi input? Or the Nplayer on another hdmi input on the soundbar? I always thought arc was for the connection between the tv and receiver (or soundbar in this case)?

I'm with OP, I've never had the app pass through 5.1 audio from the Netflix app on the Nexus Player. Is there a setting I need to apply somewhere? The Plex app does 5.1 passthrough brilliantly so I know my TV supports it, but only after I told it to do so in the app settings. Can't find find any such option on the Netflix app. Netflix on my ancient PS3 does 5.1 but I didn't have to enable anything there, it just works. I assume the audio is being decided in the PlayStation though. Is there possibly a difference if I cast Netflix from the smartphone app to the Nexus player?

I assume you don't see the Dolby logo on the soundbar. I have the S3851x-C4 5.1 soundbar (retail was $250 but got it for $120) and my Vizio TV definitely passes through 5.1 <if> I have the audio set to Bitstream. I have found the 5.1 not to my liking on most apps on the Nexus Player and Roku (HBO, Vudu, Kodi) so I set my TV to PCM. I get "fake" surround but for me that is OK. My soundbar doesn't have HDMI so I use optical audio but it still should get 5.1 from the TV. Rereading you post I'm having trouble understanding how you use HDMI on the NP to connect to the soundbar since the NP only has one HDMI output and that is used to connect to the TV. Maybe you use a splitter.