network rendering

What i am trying to do is to have PC 1 and PC 2 in my workflow. I use premiere pro on PC1 and i would like to render/export using PC2 .

First I tried it went well ( at least the trial footage) but never worked again for some reason.

WHat i did was i set up on PC 2 the media encoder to have a watch folder, i set up the preset and i saved " a copy" from my PC 1 premiere pro project  file to the watch folder. However first time i saw the encoding takes place nicely, it has the red triangle on the bottom right and offline media is what the error seems to be.

My question if i have to save my foogage too on PC2?  if yes, to where ?, as i was told in the watch folder only the root is being watched, any subfolder is being ignored.

any thoughts?