Shows like The Wire [and The Sopranos] almost seem to work against their broadcast format -- until you realize that the show is watched almost as much on DVD, in a digital download, or on cable On Demand as it is by viewers who dutifully sit on the couch every week. It's a show designed to be watched a disc at a time rather than an hour at a time; the one-hour divisions are just convenient chapter breaks, giving you a chance to take a breath and get a drink before you sit back down and click ahead to the next one. (Also, like the novel's chapter and page, it gives you a convenient way to reference moments in episodes when you're talking about them.) Lost gives you cliffhangers; The Wire gives you catharsis.
I think that this is an important observation. One of the great innovations of the printed narrative is the control that it gives the reader over the experience of the narrative. The oral epic is something that is received—with the possible exception of the storyteller's patron, the audience is not in control of the time or manner of the telling, and since recitation is dependent on a number of mnemonics, moving back and forth at will within the text is difficult if not impossible. I would thus describe the "conventional" broadcast serial—as per Short Schrift, think Lost—as analgous to the oral epic. The audience is given bits and pieces at the storyteller's will, and is largely dependent upon a single specific broadcast schedule in order to recieve narration. Premium cable series like The Sopranos pointed to an alternative model even before DVD release, as episodes are broadcast multiple times in a short time frame (as opposed to once a week, and then possibly much later in rerun), giving the viewer much more opportunity to watch at will, or, even more importantly, to re-watch. (It must, of course be noted that a Lost/Sopranos broadcast/DVD opposition is far from pure, as any devotee of the Lost DVDs will rightly observe, but I think it remains accurate to observe that there is a way in which Lost is serialized and sequential that does not entirely apply to The Sopranos.)
As a writer with avant-garde ambitions (although, again, I certainly have more ambitions than accomplishments), I'm deeply interested in the idea of the digital novel. I think that one of the great challenges of contemporary narrative is the creation of the 21st Century novel in the way that Proust, Stein, and Joyce created the 20th Century novel. I've been amazed at the seeming inability of the internet, for its revolutionary impact of the way that we communicate and share information, to make more than a sidelong dent on literature, and I think that Tim's discussion and Robin's comment hint at why that may be.
The internet has absolutely replaced print as a repository of general reference information (even if Wikipedia has problems, why in the world would anyone buy an encylopedia, and even the OED has announced that it will stop updating its print edition), and it threatens to do the same for immediate information sharing (ie, it's close to killing the newspaper). Digital media has also revolutionized video creation and sharing. While the costs of creating even a digital video shouldn't be understated—you need a computer, an internet connection, and some sort of a camera—those costs are dramatically less than conventional film.
What the internet has largely not done is to change narrative or video in themselves. Digital media makes video creation and editing cheaper and more accessible, but it hasn't created new forms, especially long forms. Short format video has exploded, but it isn't exactly new. Likewise I think that a great deal of the enthusiasm for "hypertext" (such enthusiasm itself, it seems to me, a phenomenon largely of the early to mid-90s) is based upon a misperception. I would not be the first to observe that all text is linked text. The idea of the "endless chain of signifiers" is itself an early to mid-20th Century formlulation. I would like to make an argument that HTML hyperlinks are in fact a poor actualization of the idea of hypertext. Referentiality in the "ideal" hypertext is infinite. An HTML hyperlink leads only to a single location. There is no way for a hyperlink to enfold the infinity of referentiality. Imagine a hyperlink that led to a different location every time it was clicked, and you would a have a good idea of what would be required to make a start. (The hyperlink, perhaps, as the Google search term.) In this sense, even an index listing multiple sources is preferable to a single embedded hyperlink with a single embedded destination.
Either way, the internet does not really offer, in this sense, new capability to text. Although, in all fairness, neither does Ulysses. The question is really what the internet has to offer narrative, and while I'm eager to explore the possibilities, I'm also a bit skeptical. After all, be it video or text, the internet does not seem to be friendly to long format narrative.