Yep. Having actually worked on this sort of stuff I can confirm.
Your ISP doesn't have enough bandwidth to the Internet (generally speaking) for all users to get their feed directly from a central location. And that central location doesn't have enough bandwidth to serve all users even if the ISP could. That said, the delay can be pretty small, e.g. the first user to hit the cache goes upstream, the others basically get the stream as it comes in to the cache. This doesn't make things worse, it makes them better.
