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You wouldn't even need to do real-time encoding for that, you can simply mux them in at any GOP boundary (other services already do real-time ad insertion in MPEG-DASH manifests)

Example: https://www.youtube.com/watch?v=LFHEko3vC98

Right, using DAI means you don’t have to actually touch the original video (good!) but doesn’t stop a smart enough client (youtube-dl) from pattern matching and ignoring those segments when stitching the final video together.

I am not, however, suggesting that encoding ads into the final stream is appropriate or scalable, though!

The client doesn't even have to know that there is an ad playing if they really want to thwart ad blockers. If you are talking about pattern-matching the actual video stream ad-blockers could do that today and just seek forwards but none do yet.

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