Imagine instead of letting almost anyone in America watch Mad Men for "free" after reading about it or hearing about it from a friend, AMC had to count on people calling up their cable company and tacking on their channel for a dollar a month. No way does that model make sense, and under it, Mad Men and Breaking Bad wouldn't have been made.
Isn't this exactly HBO's business model? They seem to be doing just fine (and I don't think this is because they're an incumbent as much as they make good TV).
I can't speak for bootstrapping a TV network, but I think long-term if you have good content, consumers will jump through hoops to get it.