However, syndication revenue cannot outstrip TV advertising revenue, because it is the TV advertising revenue that pays for the license to broadcast + profit.

Yes there is a gap in the market for online video advertising. But that is simply because it is still young and also because it is not being fully embraced. Also the technology available in online video can allow very very specific targeting of ads making them more profitable for advertisers, which will raise ad-prices. Tv companies which steer away from online video may find themselves lose considerable market share to ones that don’t in the long run.

The major issue I see is that of DVD sales as it could be argued that when shows are released online it kills DVD shows. However, the catchup services which are great for viewers (to the best of my knowledge) have not shown to infringe on DVD sales. It is possible people willl be big users of the catchup services which will draw them away from piracy and potentially increase DVD sales, as they drop piracy for a more user-friendly option.

However, DVD sales could simply become online downloads or rentals. Like with Amazon on Demand or iTunes. I see no current advantage that rights holders have by restricting these sales geographically like what is happening now.

A consumer in the UK can’t buy or watch certain shows online just because they’re in the UK, yet could download a high quality pirated version, for free, with relative ease. The longer that goes on the more accustomed they become to piracy, the easier they find it to pirate shows, and the less likely they will ever return to buying DVDs or official DVD downloads.

In a world that is becoming increasingly global, the industry has to follow suit, and those which try to fight it in an attempt to preserve profits, will see their profits diminish as more forward thinking companies take market share.

TV stations are struggling with drops in advertising revenue, while the internet sees advertising revenue grow.

True – and it will also lose millions and millions of dollars of syndicaton revenue from overseas broadcast partners, which is why this won’t happen until online ad revenue matches the TV syndication revenue. Hell, even TV ad revenue doesn’t match that yet – the big US shows tend to be lossleaders.