This is not true. Advertising does not affect content.
I've been working in advertising for over 10 years and on several different brands. In spending over $1 billion on advertising, there is one program - ever - that I saw advertisers pull out of because of content, and it was the reality program called "if I did it" by OJ Simpson, explaining how he killed Nicole and Ron. The network ended up pulling it off the schedule because the perception became that it was a cash grab for a murderer. Otherwise, everything goes.
The reason the Netflix shows are good is because they have close to 100 million subscribers and they can track every single thing you watch. They can analyze what episode of a program hooks people so they watch the entire series. They can look at which actors are in programming that their heaviest viewers are watching, and then cast them in their own originals. They go into development armed with reams of data that are not available to any other producers.
Advertising is not the problem of television, there are incredible shows outside of Netflix – Mad Men, Breaking Bad, Fargo, Battlestar Galactica, etc. Mad Men is an example of a show that wouldn't have been made without advertisers – the ratings were terrible but advertisers wanted to be supportive of and associated with a quality show. It became the most expensive show to advertise in, despite the low ratings, because of the association. Same thing with Breaking Bad – arguably the best television show of all time. If you go back to the first season, the ratings were terrible. Nobody was tuning in, but advertisers wanted to support a quality show.
Content developers at AMC, FX, History, etc., don't develop shows thinking about what advertisers are going to buy. They go into it thinking what's going to be a hit show?
If you want to know why there are crap shows on television, it's because making a good television show is hard. Even Netflix has misses - Marco Polo, Hemlock Grove, they signed a multi-film deal with Adam Sandler - have you seen an Adam Sandler film in the last 10 years? There's a reason he won the Razzie for worst actor and actress in the same year. However, Netflix isn't making that decision without an audience willing to tune in.
A lot of people watch horrible programming, which makes it profitable, regardless of whether or not it's advertiser supported.