Despite successes such as Hulu, the idea that traditional TV is dying is simply ridiculous. Unlike newspapers and magazines, people are addicted to their idiot boxes. And the fact of the matter is the content people actually want to watch is simply not on those independent websites, they are on your TV and to a lesser degree, Hulu-like websites.
As for the television business model, again, it can still work assuming there is a little bit of smartening up with regard to the advertisements being delivered. I have seen evidence for years that ads can work, so long as there is actually some targeting going on. And this is an area that the cable channels and networks will eventually have to wise up to. Let the viewer do a fast, one time quiz for their interests and then let the commercials reflect some of those interests.
This is not to say that TV as we know it will not begin to bleed over from cable delivery over to fiber delivery of many micro-channels rather than “networks”, but I think that we are still a ways off from that for now.