Of course, iTunes movie rentals stream 720p (which is what most HDTV channels use). They spend about 1 minute buffering the stream, then you can watch the movie.
Are you including the cost of storage when calculating the cost of serving static video?
Yes, that's exactly why it's more costly to serve static video. Live video can be served straight out of memory, which is cheap. The cost of software to stream live video has pretty much dropped to zero as well.
However, "bandwidth" isn't really what matters. It's the last mile connection to end users. Big CDN's like Akamai have this figured out and can pump millions of simultaneous live streams directly into end user networks without congesting any internet backbones.
It turns out that the main reasons we aren't all watching TV online right now is that big TV networks 1) are afraid of cannibalizing their existing revenue streams, and 2) think it costs a lot money. Neither of these are strictly misconceptions, but they aren't nearly as true as they were even a year ago.
Justin.tv has developed technology and infrastructure that brings the cost of distributing live video below the cost of serving static video, so I guess that makes it all about the revenue streams. It should be interesting to see what happens to this space in the next couple of years.