My 2 cents on this,
Hulu have a pay for no advertising model - so its already in use (tick)
Television / Radio stations around the world use Geo Location, in NZ for example send Auckland ads if you watch in Auckland or Christchurch ads if you live in Christchurch so this is in use (tick)
So maybe a solution would be give the people what they want a world catalogue, but WITH advertising if you then want to opt out then you can pay for the privilege. For the likes of the Sky's / TVNZ's Media Works of this world then it would be that they would value add to this so you could choose what virtual channel you would subscribe to for NEWS etc.
Keep it simple and allow a profit to be made for all involved, what is obvious is the trying to hold back the sea mentality will not work medium to long term.