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YouTube's next move might make it virtually impossible to block ads
(www.androidpolice.com)
This is a most excellent place for technology news and articles.
AFAIK there is no need to re-encode, since Youtube videos are stored and served in chunks anyways. The change is that they are now slipping in the ad chunks as if they were a part of the normal video chunk stream.
yeah that's what im saying. Re-encoding and transcoding is completely different, it's more than likely a served change, rather than a stored change.