Youtube could make their ads unblockable by putting them in the content's video stream or just serving them from the same domain. I feel like they don't do that just as a way to be nice to adblockers, but I don't know why.

They've a/b tested inserting ads into the video stream before. If most people acted like I did, then YouTube would have seen them come back once every week or two and leaving as soon as one of those ads came up.

Right now it seems like most content providers are actually experiencing competition as it's extremely easy to jump to the provider with the least onerous ads, while torrents create a floor in terms of how annoying your ads/drm can be before people pirate

I'm pretty sure it would also be more expensive in terms of CPU and potentially disk.

The cost of concatenating two mp4† files is essentially zero. IIRC you can even `cat foo.mp4 bar.mp4 > baz.mp4` and it's supposed to still be valid mp4 (there may be same-codec restrictions, but even resolution can change).

The output of cat isn't valid MP4. The CPU cost of concatenating is small though, it can be done on the fly. Even easier for MP4 streaming (DASH).

The cost is not in the CPU, or the processing or the resources. The cost is in the people who leave.

They are doing it already, if I block googlevideo.com, the videos don't play.

> YouTube already makes copious amounts of money outside of advertising and Red exclusivity.

What? Unless something drastically changed in the last two years Youtube still breaks about even [1]

I'm willing to bet that they are the largest hoster and streamer of video content in the world, and storage, servers and bandwidth ain't exactly free.

[1] http://www.businessinsider.com/youtube-still-doesnt-make-goo...

Wanting to do targeting for the specific user makes that really hard. They would have to do real-time transcoding of the ad into the video. Makes more sense to transcode the video once at upload then dynamically insert just the ad.

Youtube controls the client, so they could switch to a format (a brand-new format if necessary) that makes it computationally cheap to catenate videos.

What other revenue sources does Youtube have other than ads and Red subscription?

I would assume there is a fair amount of data collection that goes on with YouTube as well.

How does this contribute to revenue for youtube though? Certainly they will be using it to drive increase ad revenue, but the data collection of itself does not pay the bills.