"I would love to see another Muppet Show type of thing broadcast to the masses, but I don't think "prime time" is the best way to go about this anymore. And it shouldn't be the only goal that creative people strive for...getting any program from idea to pilot to an actual season on TV, let alone a prime time slot, is exceedingly difficult. Especially an idea featuring puppets. I'm not saying it can't be done, just that it is an especially steep hill to climb."
I think that Paul has done an excellent job of making the case for why the web is probably a much better bet for producing your own show than TV. As he mentions, viewing habits are rapidly changing. The value of prime time (and network) TV is eroding more and more with each passing month.
When I lived in Mexico for two years I got in to the habit of watching my favourite shows online because they weren't available locally on TV. These days I use a PVR, timeshift shows that I like to watch and skip most of the commercials. People are doing this in the millions and it's killing network TV revenues. The recent, bitter writer's strike in the U.S. happened because everyone involved knows the future of video content is going to be built around the web, not over-the-air TV stations and cable channels.
Also, it's sad reality is that if you're an independent or unknown artist, creating a show for TV is a sucker's game. Unless you've got a well-established track record behind you, in order to get a show on the air you usually have to give up ownership of your work and/or a huge chunk of any profits that go along with it (that's if there's any profit...most puppet shows don't generate huge royalties for the creators or puppeteers involved). You'll also likely have to endure endless soul-crushing notes and critiques from crackpot executive types.
On the other hand, if you can produce a good show on your own on the web, build a real audience for your work and figure out a decent business model (that's usually the hard part) you can laugh all the way to the bank. There are lots of examples of independent creators finding money and success online, including Rocketboom, Homestarrunner, JibJab, Penny Arcade and the Ask A Ninja guys. All of those online properties reportedly take in at least six figures a year, are owned and operated by their creators and enjoy total artistic freedom.
Give the choice, which approach would you choose?