100% the best compromise options. I realize Twitch needs money, but interrupting content makes me want to not use the platform, while this is a tolerable change that satisfies all parties.

1. Take about the top 25-30% of the chat window and put the ad there. Silent by default unless you click on it.

2. Do #1 but take the followed channels sidebar space instead.

3. Create a no-ads tier that's not the full turbo thing. All I want is no ads, I don't care about the rest. If there was a no-ads tier for like $2-3/month, I'd be on that.

The current implementation of ads is very lackluster, it either complete obstructs the gameplay without Picture-In-Picture and creates a disconnect to the stream which is a detriment for the entire twitch experience or it obstructs most of the stream.
A way better implementation would be to let the streamer control ad placement like cam placement in the stream and to have an ad window without audio that's about the size of a webcam. Especially with options like having the ads slightly transparent or as an overlay it could be way more attractive for companies as well since they get way more exposure over a longer time. Even the problem of ad-blocking can be avoided this way.

Oh that is a great idea!

This is reasonable imo

Part of the issue that the currently implementation of ads completely passes over is audio. Twitch did a lot of work to add this new picture-in-picture mode, that moves the stream above chat, so the audience isn't "missing" anything. However this is a flawed idea.

You see, visuals to a stream are only 50% at a maximum and can be even less depending on the content. That's where audio and interaction come in. A large number of viewers come to interact with streamers. They come to see and hear the streamers reactions to awesome moments in games, esports, announcements. They come to be a part of the content and experience it.

The current implementation of mid-roll ads completely takes that all away. We quite literally saw a clip of a streamer watching the PlayStation event this past week who was seeing a cool unveiling of the new (but controversial) Harry Potter game, who then literally got a mid-roll ad in the unveiling. Sony isn't going to run ads so people don't miss the conference.

So my suggestion is to add what's known as a "lower third" to the stream. Easiest comparison is to YouTube. It's a small banner picture, or gif ad, that appears over the center middle portion of the video player. It's not super intrusive, it's not muting stream audio, nor shifting the entire video player. And viewers can just exit out of that ad whenever they want, or click on it to be taken to the advertisers site for more info.

Optionally, there's a lot of wasted space just in the overall Twitch UI that could have banner ads as well to serve the same purpose.

I understand that Twitch is a business. I understand that Twitch needs money to operate as all businesses do. But Twitch needs to understand that their "product" is the viewer experience, and automated mid-roll ads tarnishes the entire experience. If a streamer wants to manually run ads, then by all means allow them to, but forcing this system on people will absolutely drive the quality of streams down, drive the quality of the viewing experience down, and just overall make people unhappy.

As a daily viewer, I am asking, please consider other alternatives like Lower Thirds before sticking to this.

This would be an incredibly helpful change. Or above the chat window where you're planning on moving the stream image.

- Thanks

Don't roll ad clips, put in ad banners and little windows within the stream. It doesn't interrupt the stream completely and everyone can see a d recognize it!
Nice, clean and simple for broadcaster and viewers.

make the ads appear at the top of chat, or under the stream like a banner,
it doesnt need to be loud or anything just have it pop in occasionally, that plus streamers putting ads when on break should make up for the avenue you would get for just random ads.

Put ads as banners below stream, or as popup videos in the corner of the screen This is implemented all across the web and is particularly important when the website is selling live content that should not be interrupted.
Muting, minimising, and obscuring streams will only hurt a streaming platform.