If Apple really is making a TV, they will make it work and make money off of it.
Yes this TV will cost a bunch of money for consumers, but since TV makers now are losing money, this makes sense. Apple does not loose money on its products.
They will do this the same way they made the iPhone and tuned iTunes into the worlds biggest music store.
With the iPhone they worked together with a carrier to produce a revolutionary product. In doing so, they maintained all control over the product and the carrier was basically just along for the ride. Now they have expanded to include all carriers worldwide.
With music they cut deals with the music labels and gave them a share of the profits.
In entering the TV market they will simply combine their strategy from these two markets.
In the TV world you have "artists" which are the TV show producers. You also have "labels" which are the TV networks. Theres your music industry analogy.
You also have "carriers" which are the cable and satellite networks. There's your mobile industry analogy.
IN this analogy, iTunes retains its function and the "iPod/iPhone" would be the Apple TV.
They create a TV with a built in set top box compatible with most cable and sat providers. Live TV would be there and the consumer would still be required to sign contacts and buy packages from the cable or sat provider. They might throw in some iAds for added revenue.
Streaming content would be provided by the "labels" i.e. the TV networks. These could be provided as flat rate services or per-episode charges. Each Network could decide for itself. Apple wouldn't need to actually make the deals, just provide the technical platform and payment infrastructure and let content provides loose and see what happens. It worked on the iPhone and 3rd party apps quite nicely.
And Apple being Apple, they would also include the features we already know from the existing Apple TV box, such as streaming from iTunes, video rentals, Netflix etc.
Add Siri, a microphone, a built in Webcam and access to apps that take advantage of these (imagine Skype or iMessage) and you've got an awesome device.