In TV movies or YouTube, the actual content gets paused so that at least makes sense, it's just an interruption. But in Twitch it's like if they put ads in the middle of a football game! Imagine being interrupted for ads and back to players celebrating a goal.
Another thing Twitch does badly is to put ads on my face not even 30 seconds after joining a channel. Psychologically it feels like I haven't had time to get invested in the content, so it's not worth it to put up with the ads, and it makes me move somewhere else or close the tab.
My guess is they don't show ads to guests before they reach a certain amount of frequent visits.
I view ads as a reminder to myself that I should maybe be doing something else with my time. I would love an ad blocker that blanked my entire computer screen for the duration of any ad, it would be a great chance to breathe and stop doom scrolling.
That seems a lot simpler to do?
https://chromewebstore.google.com/detail/sponsorblock-for-yo...
You need hard work on the encoder to do that (at least to segment video, because re-encoding dynamically is obviously not an option). Not profitable for Google.