If we’re talking about taking live TV and mapping it straight to Internet delivery, I agree there are all kinds of problems with scaling the infrastructure to meet that kind of demand. Things continue to improve, and even HBO Go/NOW was able to keep up with Game of Thrones demand this year.
Not everything is a live mass-watch event though. 90% of content spread across linear broadcast channels can be put into on-demand catalogs, and you could get reasonable statistical multiplexing to balance out that load.
Chances that a significant quantity of people are all going to turn on “the big game” at the exact same time? Pretty high.
Chances that a significant quantity of people are all going to start watching something on Netflix at the exact same time? Much, much lower.
I agree with most of that. But, exactly why, will things “continue to improve” ? Not to get too deep, but that is part of the American/western ethos. “If they can put a man on the moon...”. Somethings are just not possible, and many more things are not economically possible. MAYBE things will continue to improve relative to internet TV (or fill in anything else here, from cure cancer to make ice cream that is not fattening and tastes great) or maybe NOT. Somethings are just not doable.
Regular NFL games get a weekend rating in the 10s. NFLST via internet is only available to the few people who cannot get DBS. And two weeks ago it crashed. As did Tiger-Phil, with less than 20K watching, and as did MLB.tv, nine times last year. Because the internet is just not ready for prime time in terms of live sports and other major events. And it may never be.