That sounds fantastic. But rumors of late have implied that Apple tried for that (again) and nobody wanted to play ball. So (again per most recent rumors), Apple is going to roll out a bundle of channels selected by Apple that is generally being perceived to be their own variation of a basic cable package.
If there is on-demand, it's probably on-demand as already implemented from services like Dish & DirecTV and various cable providers: traditional ad-loaded cable channels plus some on-demand content from the networks behind some of the channels in the bundle. Even Comcast (and both SATT players) already has a pretty robust version of that.
So, unless rumors over the last 4+ months are wrong, Apple appears to have given up on some al-a-carte (and commercial-free) dream (except the way they've already had it for years now) and is instead trying to bring a variation of the existing cable TV model to a new

TV via a streaming connection. If that's true, then ad-loaded local channels mixed in via a OTA setup would blend right in like they do in existing TV models.
Apparently, the grand attraction (in this) will be some superior UI (that, if actually superior enough to motivate the masses to want to switch, seems like it would be quickly replicated by the existing players) and maybe price if the channels Apple chooses to include in their bundle happens to line up with what a prospective subscriber would consider their own favorite channels (which, knowing how things work around here, many will quickly deem any channels Apple would select as the best available channels and all others are in the "99.9% don't want", "stupid", "useless programming" junk pool). Of course, I don't see why a Comcast, etc won't assemble the same mix of channels plus maybe a few juicy ones at or below Apple's price, replicate anything innovative in a new UI and bundle that with their broadband offering so that there's is the better deal for the exact same mix of channels.
Now, this virtual DVR (watch it whenever you want) piece of that seems doable in the channels that stream. To make that work with an OTA tuner means linking back to the computer to which each

TV is already tethered and storing locally recorded stuff there (pretty much exactly how stuff from companies like Elgato work now). One would have to plan what they want to record via OTA (just like they do now with whatever kind of UI they are using) but otherwise, the watch part of that would be seamless- just like picking something to watch that is stored in iCloud.
The OTA option delivers best quality (better-to-much-better than streaming quality due to compression), works even when your broadband feed is down, is free* (so it doesn't require Apple to pay the local free* channels something to stream them), would deliver the bulk of what is generally the most popular TV programming receivable without eating wired broadband bandwidth for those dealing with caps AND would mitigate this rumor of delays because Apple is yet to strike deals with hundreds of local stations to stream their content.
The alternative is to keep waiting for a new box from Apple until after Eddy finds time to forge a deal with each local broadcaster (last I saw there is well over a thousand of them and that's me being U.S.-centric instead of thinking about the whole world) if bundling them into an iCloud delivery option is the ONLY way Apple wants to do it.