Here's a pretty good article on this topic:
http://brainstormtech.blogs.fortune.cnn.com/2009/12/22/can-steve-jobs-unplug-cable-tv/
Those of you imagining that we are somehow going to get a full cable/satt replacement at a huge monthly price discount are living in a serious illusion. There is no (voluntary) way that the cable/satt Goliaths are going to allow this to happen- not through
their broadband pipes.
Plus, there's just too much money involved if anyone thinks that we are going to get a $30/month eat everything package of iTunes TV content "as is" (commercial free). Key quote: "Another issue is whether iTunes TV would be advertising-free. U.S. broadcast and cable networks sold $43.4 billion in ads in 2008, according to TNS Media Intelligence." Companies don't just jettison $43.4 billion for a little slice of $30/month. Remember the system "as is" has the vast majority of people happily(?) paying a cable/satt subscription AND accepting an ever-increasing number of commercials on most of the channels they receive.
Lastly, we still have the great challenge of "Live" (sports, for example) as well as "Local" (news, for example), neither of which is well implemented in the iTunes ecosystem (nor is it currently set up for such programming). But maybe the recent acquisition is aimed at resolving that big problem.
But, let's imagine it happening somehow. Further, let's imagine mass adoption (beyond the little segment of pure Apple fans). What do you think will happen to broadband internet fees? Hint: Who controls almost all of those broadband pipes? And the excuse for much higher broadband fees will be blamed on much higher bandwith demands.
All the companies that would be involved put profits for the shareholders ABOVE doing what is best for customers (such as delivering a replacement for cable/satt subscription services at dramatically lower cost to custumers). Again, a key quote: "As one media executive told the Journal: "You don't want to shoot a hole in the bucket to create another revenue stream."
I'd love to see it happen. But something is going to give, such that we are not going to end up with an "eat everything" package of commercial free iTunes content for something like $30/month. The one glimmer of hope is that Apple is apparently offering more money to the owners of the content than they get via the cable/satt Goliaths now. That pits greed of those who owns the content against power within the established system.