Decisions by ABC, Google and others to concentrate on ad supported delivery show the real problem in the on demand world, especially in the US. People won't pay to view.
My experience is that subscriptions work for the right type of content and pay per view work for live events, but you're unlikely to get relatively many takers for Desperate Housewives at $2 when you can record the series from your existing cable connection using TiVO or a similar DVR.
So, here comes the next phase of development when the advertising model kicks in. When I started Narrowstep I estimated that 80 - 90% of the revenues across all channels would eventually come from advertising - just like traditional media. Currently, I'd revise this downward to 70 - 75% for two years out from here, but it's still the majority.
Youtube and Google are already delivering streaming ads with their consumer services, and this seems to be the model that will be prevalent here, although I feel that there is room for a good commercial vlogging service out there.
What will work, in order of magnitude across all genres, I predict:
Let's wait and see!