Also Flatbread, why don't we look at your argument another way.
In your argument, there is licenced media (BBC) that you claim is complacent and uninnovative. Then there is the market-driven other broadcast media that is innovative, trends towards quality.
We don't have to worry about whether what you say is true, we simply need to look at your implicit assumption, that the market chooses quality and innovation.
The logic inherent in your own argument suggests that almost no-one would watch the BBC now, or at least the proportion of people using BBC services would be lower than their exposure in the market.
This way of looking at this cannot compensate for the fact that people with no spare money might never choose sky, but what negates that point is the argument that people are prepared to pay more for what they like if it is better than what is there already (the capitalist, market first argument).
Sadly the proportionate use of BBC services remains higher than its 'fair' share of the market if all channels were taken equally versus Sky (in the UK), so there too your 'markets are intelligent at promoting quality demanded by the audience' fails.
I know its attractive and first-year-business school-y to promote market rhetoric, but behavioural economics is what's needed here, not dry economics or just free market crap.