Who pays what to whom part 2

I talked to my older and wiser friend the other day and asked him about this.  Turns out there are maybe four parties involved:

1) Studio or production company creates content and sells it to what I'll call a "content network" like NBC, CBS, etc...
2) The content networks sell and insert advertising to the produced content.
3) The delivery networks (like Comcast, FiOS, DirectTV, etc), pay the likes of NBC, CBS etc for their programming.
4) The delivery networks then turn around and charge you and I to watch it in our homes.

So here you have Netflix that is inserting itself into the role of "delivery network," except that they don't own any physical delivery network infrastructure, they are piggy backing on the broadband network lines that Comcast, Frontier, etc sell to us.  I would think, then, that companies like Netflix would be on the side arguing for net neutrality rules.  Comcast could decide that they'll block Netlfix servers, or throttle bandwidth from them to make Netflix less desireable than expensive cable television.

Netflix already has a wealth of rights to distribute movie content, and they are just getting into the television content.  The ace they have up their sleeve is that they could theoretically do a much better job of serving up advertising than the traditional delivery networks.  Just like banner ads on websites often advertise things that you have a decent likelihood of being interested in, they could deliver advertisements to the viewer that are targeted to that particular living room.  This could really get the content networks interested in distributing on Netflix, and potentially reduce the cost of signing on their content.

You don't have to look very hard to know that the traditional content delivery arrangements are going the way of the dodo bird.  It seems that every month there is someone talking about how practically no-one is dropping their cable subscription in preference for content served up over the internet.  I think the very fact that so many people are talking about this means that everyone is wondering when it will happen, not if.