I recently went to a conference (they called it a "summit") about video on the web.
Several things struck me as very significant.
1) In countries that have very high speed web access to the home (100mbs), the average viewing time for web video programs is 40 minutes. People actually watch long-form programs delivered over the internet. The U.S. internet infrastructure is sadly lacking in the "last mile," so we are playing catch up in this game right now.
2) Big money is going into Content Delivery Networks (CDNs) that will enable anyone with a modest budget to have their own television "network." The challenge now is to make the experience of finding and watching programs as easy as cable TV. The buzzword is a "lean back experience" as opposed to the "lean forward" mode of computer interaction.
3) Advanced compression techniques allow CDNs to deliver HD quality. We saw demonstrations of feature films over the web that looked better than the blocky images that you sometimes see with cable or satellite.
The conclusion: We are probably just a few years away from the long-awaited promise of true video on demand -- any program, any time, any where.