When I grew up, we had two TV channels, both run by the state and filled by special foundations with members to cater for. If you didn't like a program, you could always see what was on the other side. Since the choice was so limited, it probably was a good idea to have the government to divide the limited broadcast possibilities evenly over groups thought to be representing major movements in society.
Nowadays we not only have 9 Dutch channels, but also a large amount of foreign channels. There is a lot more to choose from, but is seems that the quality has dropped. This probably has to do with the fact that people no longer watch the same programs and that a sense of togetherness has been lost that way, which hurts the perceived quality of the program. But it might also have to do with the fact that programs are no longer created for the viewers, but for the advertisers, who at the end of the day foot the bill.
With the advent of commercial TV there were of course doomsayers predicting something like this and warning for American situations. Commercial breaks within movies or even on sundays. Have they been right? Well, we got the commercials and sunday is no longer holy, but there seems to be hope on the horizon to the west.
The Americans have so many channels that some have started to experiment with broadcasting quality tv in order to attract viewers. HBO, for example, produces awarded programs like 6 feet under and their recent Carnivale, are quite viewable. Of course, people pay for HBO with money instead of by watching commercials, so it is logical that the channel pays more attention to its viewers.
But it is also part of an evolutionary process. When the choice is limited, the goverment decides what goes and what doesn't. When there are some channels, you only get middle of the road, viewable for everybody content. If the number of channels becomes really big, market opportunities to cater for niche tastes appear and quality programming will be made. That is the good thing about the Internet. With an almost unlimited diversity of information suppliers, there is a niche for almost everything.