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The problem is that, adjusting for inflation, it should be dramatically less. That's the trend. The major outlier is for raw materials which are more costly to extract and process for use.

In the 1950's a decent Westinghouse consolve TV cost about $1000. Inflation adjusted to today, that's about $9000.

According to people who know about these things, in 1950, tv penetration was 9% of American households. By 1955 it was 64.5%.
You can't compare an immature technology (1950 tv) with a mature one (1950 automobile).

To make a similar and honest comparison with automobiles, you'd have to rewind the clock back to before the Ford Model-T debuted in 1908.

There is a large untapped market for a car marker who builds the same model of car, with no changes other than manufacturing refinements, for 7-15 years, direct to consumers.

VW is notorious for selling its old models in foreign countries.
The original VW Beetle was manufactured in Mexico until 2003.
The VW Bus is finally getting canceled in Brazil (and that's being fought).
The 2nd gen VW Passat was sold in China for almost 30 years until it was updated.

a. cheap credit money which makes it cheaper to buy a new car than to maintain and run older cars,
b. regulatory creep which increases requirements continually and

a. it's never cheaper to buy a new car.
b. One of those regulatory agencies crash tested a 1959 Chevy Bel Air with a 2009 Malibu
http://www.youtube.com/watch?v=C_r5UJrxcck
This video speaks for itself.

c. consumers willing to spend a large slice of their income on flashy cars and status symbols.

Now you're just arguing with a straw man.
We're talking about the cheapest car of 1970 and the two cheapest cars of 2014.

You are correct that there are many physical locations with no good OTA signal. However, not many people live in those places.

The top 10 metropolitan areas include 30% of households; top 25, close to 50%. All have a rock solid OTA signal from multiple stations.

You've only got to drop down to a city the size of Grand Junction, Colorado - still a city with a decent OTA signal - to cover 99% of the population.

(Source: neilsen tv market data at http://www.tvb.org/media/file/TVB_Market_Profiles_Nielsen_Household_DMA_Ranks2.pdf)

I looked at current advertising costs to see whether $2/episode is justified. Right now advertisers pay about 3.3 cents to put an ad in the face of a 25-54 year-old adult during a prime-time show. In an hour-long show, there are about sixteen minutes of non-program material, though some of that is promotions for other shows and local advertising. Let's say that ten minutes of every prime-time hour includes national advertising. That means advertisers are willing pay about thirty cents per show; two dollars seems like gouging in comparison.

Well Google must make money too. One dollar and seventy cents sounds like a more than reasonable fee to me.

I looked at current advertising costs to see whether $2/episode is justified. Right now advertisers pay about 3.3 cents to put an ad in the face of a 25-54 year-old adult during a prime-time show. In an hour-long show, there are about sixteen minutes of non-program material, though some of that is promotions for other shows and local advertising. Let's say that ten minutes of every prime-time hour includes national advertising. That means advertisers are willing pay about thirty cents per show; two dollars seems like gouging in comparison.

I strongly suspect that the amount that I pay per show is more than the amount advertisers pays per viewer

In prime time, advertisers pay about three cents per HH. See http://www.tvb.org/rcentral/adrevenuetrack/media/media.asp?c=2f.

That's for broadcast digital TV. Here are the U.S. TV markets, assuming they mean DMA markets (unclear). Everybody bigger than Jackson, TN has to pay (and I'd imagine that Jackson will, too, after the next census data update). This part has nothing to do with Internet streaming. It has to do with the number of unique programs the TV station simultaneously transmits. A station that airs a network affiliate on its first subchannel, 24-hour news on its second subchannel, and 24-hour weather on its third subchannel. If that is a top-172 DMA station, it will cost $30,000 per year to do so because there are three services. It doesn't matter if that spans into a second market using a repeater; it still costs only $30,000. At least that's the way I would interpret it.

The average American watches an average of 4.5 hours of television every day, according to Nielsen. I don't know what percentage of viewers break down into the "happy" v. "unhappy" camps, but 20% of that is close to another hour of TV -- every day.

To put that in perspective, consider two things:

1) Most people spend 8 hrs/weekday at work and 8 hrs/day asleep. That's over half of the rest of one's day used for meals, grooming, chores, travel time, etc. For many people, TV is how they spend all of their free time during the week.

2) 4.5 hrs/day = 31.5 hrs/week. 20% of that is over 6 hours. That's not a trivial time investment.

Lastly, note that the above 4:35 quote is for adult men. Women watch about 40 minutes more TV per day. (The good news is that teens and children watch less.)

An interesting point -- but who created the internet and home computers for you?

Yep -- we are all now in our 50's and up.

But we didn't grow up on TV either -- the first TV in our family was used to watch the moon landing in '69. But there was no "cable"; we could only receive three stations. Wasn't worth watching, most of the time (except for exceptional events, like the moon landing).

The previous generation (take my mother-in-law - she's in her '70s) didn't see a TV until their late twenties/early thirties -- it certainly isn't a formative part.

Still, census disagrees with me a bit -- TV penetration in households in the USA was nearly complete by 1960 (I guess our family was a hold-out):

http://www.tvb.org/rcentral/mediatrendstrack/tvbasics/02_TVHouseholds.asp

It may be that viewers born 1960 (and before) to 1970 (ei. those who did NOT start with cable) view TV programs as an "event" rather than as disposable entertainment, which may drive that demographic to watch first airings.

(Ob: Now get off my lawn, you damn kids!)

http://www.tvb.org/rcentral/mediatrendstrack/tvbas ics/02_TVHouseholds.asp
Percentage of Households with a TV: 98.2 down from a high of 98.4. Of course, this combines Cable and Megawatt transmitters, but that will give you an idea. If you have cable, you already have internet accesibility.