If they can sell a useful package of channels for less than $30 a month they have a winner all while including access to photos/music then they have a winner.
That's right. Because Apple has a pattern of significantly reducing the cost of media they offer in the iTunes store. TV shows are cheaper there than via other means (such as DVD or even other streaming sources like netflix).

Movies are cheaper than- say- DVDs or BDs.

Music is cheaper than CDs.

Books are cheaper than they are from other sources.

Magazines are cheaper than they are from other sources.

Etc.
If we think about the average monthly bill for our television feed now at the usual $75-$125 or more, and then we fantasize that Apple's replacement is going to only cost about a third or less of that norm, why exactly are the current players going to allow that? And keep in mind that for anything to flow from iCloud to an Apple television, it has to pass through pipes usually controlled by the very parties that would suffer the revenue pain of everyone switching from cable/satt to an Apple subscription service. Why are
THEY going to allow that to happen... through
THEIR pipes?
But, it will be different this time... at least while we're dreaming about it.
The basic principle is that instead of paying cable operators for a ton of channels with stuff you don't watch, you pay the actual content creators for their particular product (i.e. movie studios, news channels, sports leagues).
Just like Apple did with the music business right? Pay the musicians directly? Oh yeah
Just like Apple did with the book business right? Pay the authors directly? Oh yeah.
Just like Apple did with the existing video offerings right? Pay the content creators directly? Oh yeah.
See the pattern here?
But, it will be different this time... at least while we're dreaming about it.
Obviously, I don't foresee an Apple television. Too many problems with it. What size is the best size to make? Your favorite is probably different than my favorite? LED vs. LCD vs. Plasma vs. Something Else? Apple target margins vs. television industry margins (where there is no 3G subsidy to help out).
But most importantly, unlike iPhones, Macs, etc, if there continues to be a cheap

TV box as a standalone device, all the "wow" software can also run on anyone else's television. If the hardware & software are not exclusively inside an Apple-branded thing, the typical justification for paying up for the Apple-branded thing becomes much more hooked to the Apple brand itself... not the experience. If the software will also run on the exact same panel being supplied for the Apple television- and we all know that the same panel with someone else's logo on it is going to cost a lot less- then a cheap added purchase of an

TV set top box brings the same (software) experience to that cheaper (but the same) set.
Imagine if iOS and/or OS X was free to run on everyone else's hardware. That's a fundamental problem here. This particular Apple software would be available to run on everyone else's hardware via the set top box called

TV.