Does anyone do that? The average developer likely would not think to do this because it is too computationally intensive to splice things into A/V streams on the fly.
A more clever developer could splice the ad into the video at an I frame, but then the ad needs to be a multiple of the number of frames that are both the I frame and follow the I frame. This also would mess with metadata on the length of the video that would need to be adjusted in advance. It is doable, but you give up flexibility and your HTTP sessions cease to be stateless. Then there is the need to handle splicing into audio and I do not know offhand if there is a cheap way of doing that at the server like you can do with video through I frame splicing.
It seems to me that they have lower server costs by doing things the current way.
A more clever developer could splice the ad into the video at an I frame, but then the ad needs to be a multiple of the number of frames that are both the I frame and follow the I frame. This also would mess with metadata on the length of the video that would need to be adjusted in advance. It is doable, but you give up flexibility and your HTTP sessions cease to be stateless. Then there is the need to handle splicing into audio and I do not know offhand if there is a cheap way of doing that at the server like you can do with video through I frame splicing.
It seems to me that they have lower server costs by doing things the current way.