There is no need to pay for anything additional with AppleTV. We don't. However, if you already have a cable subscription, there are some benefits.
We have a netflix subscription and use it for that. We also use it to stream internet radio. But the biggest advantage to us is that we have a Mac as our home computer, and the Apple TV streams anything from the Mac to our tv. Our home movies, photos and music library. I will also use it to show the family something from off of my iPad or phone from time to time. If I come across something interesting on the internet, I can put it on the big screen in a matter of seconds, without getting out of my chair.
You can rent/buy movies and subscribe to channels through it, but we never have.