I have 100% replaced my cable TV. I watch a lot of TV. Well, I have the TV on a lot if I am watching it or not. I use it kind of like a radio.
The programming is also perfect for kids. They have just a few shows that they watch over and over again, the icons are big enough that they can tell what the show is.
I am watching a lot of old shows that I forgot about. Catching an old series from episode 1 forward is great.
I also have Hulu for the more current shows.
This is wonderful and cheap. I pay less than 10$ for all my TV entertainment now (on top of my internet connection). If you look at it that way, for people that drop Cable TV and Dish TV, if they had to pay an additional 10$-40$ for a better internet connection or more bandwidth, they would still be saving money each month. I am paying about 60$ a month less than I was with Dish TV.
I expect that at some point things will balance back out again. I don't want the fact that I am watching a lot of Netflix to impact my internet service, but I expect that it will at some point.