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Aereo relies on tiny antennas located in the company’s data centers that pick up local channels’ signals and beam them over the Internet to customers. For a monthly membership of $8 to $12, Aereo customers can watch the channels streaming live online or save them on virtual digital video recorders for later.

TV networks have responded: ABC, CBS, Fox, NBC and PBS are suing Aereo, claiming that its service violates copyright law by selling access to their content without their permission. A federal appeals court ruled in Aereo’s favor earlier this year,

What would Robbins be doing if he was in charge of Nickelodeon in 2013, for example, to respond to changing habits of their audience, and disruptive competition from the YouTube world? "The one thing that I would do: I don't think they make enough content. If you look at the primetime schedule on most of those networks, there are three to four original shows on, and it's not enough. It used to be enough when there were only two channels, but now with a mobile and a tablet, I have so many choices," said Robbins.

"That's the big problem: the model is broken. Their shows are relatively expensive to make, so they can only afford to make a certain number of them. So they are sort of stuck, and until they figure out how to change that model, you're going to see the audience keep eroding."

children are still sitting on their sofas watching videos, but the source is now YouTube and the devices are smartphones and tablets. "It's not just my kids, or kids in the US. It's kids everywhere," said Robbins, adding that half his company's views come from outside the US, and that half its views and comments come from mobile devices.

There's also fear from operators that if programming providers build up large audiences through their own apps, they could one day go "over the top" or dispense with cable. One of the most closely watched issues in pay TV is when popular streaming service HBO Go will go direct to consumer.

usage of these apps is still small compared with how many people watch TV the traditional way. But it is growing quickly. The "Watch ESPN" app is available in 55 million U.S. homes and has been downloaded 24 million times, ESPN said, and minutes viewed on the app on mobile devices is up more than 6.5 times from two years ago.

Factoid: A majority of brand marketer and advertising agency executives expect original digital video programming to become as important to their business as television advertising within the next 3 to 5 years.

The thinking goes like this: Cable customers are watching Netflix anyway on other devices, so why not plug the service so they don’t have to switch over to an Apple TV or Roku?

Apple TV could take away that pain point for advertisers in-between showing an ad and the user actually buying an item: They could make purchases directly from their TV. That's a very appealing call to action for an advertiser.

While The Wall Street Journal reports that Apple has signed up heavy-hitters like CBS, ABC, and Fox, it appears NBC is not involved with the negotiations due to a long running feud with NBC parent company Comcast. 

it might well be that the broadcasters still dictate the advertising that will run against their content on Apple TV. Apple might instead have to rely on more "native" forms of advertising rather than pre-rolls and mid-rolls — Like banners, text overlays, or ads that appear on the home screen for instance.

Apple may have another bargaining chip: According to the New York Post, the company is making offers to share detailed customer data with content partners, who could then use this information to target shows to users and advertisers.

Yet with all of these devices in consumers’ hands, multitasking is on the rise. According to the survey, 86% of consumers admitted to multitasking on another device while watching television (up from 72% in 2011). However, only 22% of those multitaskers are doing something directly related to the programs on the television set. The disparity is both a challenge and an opportunity for marketers, Belson says.