[petercooper]

Video transcoding at scale seems such a "solved problem" nowadays, I'm surprised YouTube hasn't moved to baking ads into the main video stream directly when they're served to non-Premium users - they control the player so could still let people skip them after certain time periods, etc. Maybe the revenue lost to extra compute needed doesn't balance out yet.

[bobdvb]

Encoding is terribly computationally expensive. You wouldn't want to do it at scale for every viewer, the RoI would be poor.

What you can do, is splice in pre-encoded ads and that works okay if done correctly. It's also practically impossible to detect/block.