Nope... way too agressive in your time tables.
When the TV comes out of the box with a cat5 connector to plug into your household internet and have DVR’s built in and ONLY THEN.. will television become primarily on demand... and in 2008 we are NOWHERE near that... in fact.. NO TV such as this exists today.
Networks will continue to exist.. the profit centers will change and may not be so high, but production costs will also decrease. The idea of a Million Doller Per Episode actor is definately going to be a thing of the past... networks however will march on for a good while.
We shall see in the fullness of time. If anything, I think ‘networks’ may not even last two more years.
But the technology is just about there. Remember, Comcast will start rolling out this summer a new technology called True2Way that will allow essentially third-party set top boxes, video recorders, etc. to be connected directly to the cable line and you'll get to watch all your channels and record it, too. True2Way is important because both Time Warner and Cablevision are seriously considering adopting this technology and even DirecTV and Dish Network are doing the same, too. Essentially, instead of renting the equipment from the provider, you buy the box, plug it in, and follow the on-screen installation instructions to make it digital cable or satellite TV compatible.