Mark Cuban wrote a long post explaining why a TV show that merely asks for 10,000 viewers at once would not scale on the internet. Due to the lack of Content Delivery Networks that could actually stream this amount of content (which is low by TV standards), having a show with this many viewers is not feasible. Cuban calls this “the Great Internet Video Lie”.
Cuban is working under the assumption that people actually create internet content to even get 10,000 viewers or that all viewers must come at once. Some people are trying to pull in a lot of viewers. This is true. However, some people are trying to pull in targeted viewers. A targeted viewer is much more valuable to an advertiser than someone who tunes out an ad because it is dumbed down for the masses.
Think about it this way: imagine you are Gogol Bordello (one of my favorite bands) and you want to perform somewhere. You can perform on Letterman, a show many people have not watched in years but gets well more than 10,000 viewers easily, or you could perform for a popular video blog dedicated to punk music. The video blog 1.) is more likely to promote you as you actually appeal to their audience, 2.) will be more likely to have watchers who will actually buy your album and go to your shows and 3.) can archive the footage so you can get more views later. So perhaps you won’t get 10,000 views today, but you could get a million targeted views from people who are actually searching for you over the next year.
The low overhead associated with video content online allows people to create niche sites that would not survive the very cost prohibitive TV. Niche content mean very targeted ads. One targeted customer is worth more than ten customers who are editing out your ads with their DVR or going on a bathroom break.
Internet will do to TV stations what cable channels did to NBC, CBS, and ABC. It will force them to create good content and will shrink their influence on modern culture. How this is a lie is beyond me, but Mark Cuban also thought this was a good haircut, so your guess is as good as mine.