975
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I am not for ads but what is so difficult about adding them to the video stream. This should make adblockers useless since they can't differentiate between the video and the ad. I could just imagine it would be difficult to track the view time of the user and this could make the view useless since they can't prove it to the ad customer. I have no in depth knowledge about hls but as I know it's an index file with urls to small fragments of the streamed file. The index file could be regenerated with inserted ad parts and randomized times to make blocking specific video segments useless.
Cause you need to insert it every time for every viewer. People get different ads and those ads obviously change over time. So embedding one ad into the video permanently makes no sense. I'm pretty sure YouTube does it the way they do cause the alternative is not feasible.
That wouldn't make sense in the case of hls since the stream consists of multiple fragments of a video and you would just insert the ad fragments. This would only require changing the index file which could be done again and again with no effort and needs no reencoding of the video file.