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Which one exactly? They're all different types of files in there. Some can extend as you're trying, some can't. If you can't drag it out, then you've reached the physical end of the media. You must then go to that layer's properties, Timing section, set the End Condition to Loop, then set the End Duration.
I'm able to extend the background but no matter what I do I'm unable to adjust an out point at the 10 sec point in the timeline that prevents the background to go to the extended point. I extended the background,change the duration fom 10sec to 20 and nothing seems to work.