I remember when we had some friends visit from the US last year, they were shocked that we could pick up over 100 free to air channels on satellite (besides shopping, foreign & religious), including several (BBC 1, 2, etc.) no commercials, the rest with fewer ads than on US channels and also a few HD channels. They were even fascinated that I could record something to USB and play it back on my PC using VLC without running into copy protection issues. On the other hand, I'd imagine that this would never have happened had the BBC not gone free to air on satellite several years ago.
Unfortunately, we do lack some of the other services, e.g. there is no Netflix or Hulu in Ireland, so while we do have some free stuff here and less tight DRM measures, we do lack some of the premium and on-demand services available in the US.
I do agree that on-demand TV is going to be the way to go, with the only broadcast TV channels left over being news bulletins and live sport, as well as other items that are better watched live than on-demand. Even still, this stuff could even be streamed live over the Internet.