Christopher Herot usefully distinguishes the two concepts:

For background, see also our entry on P2P-TV.

IPTV
“The recent Streaming Media East in New York brought into focus the difference between two seemingly similar terms, IPTV and Internet Television. Both refer to the use of Internet Protocol and associated technologies to deliver video to consumers. Both imply that the sound and images are in digital form on their way from the camera to the screen. But while the technologies are similar if not identical, the business models and thus the user experiences are very different.

IPTV, as the term was used at the recent NAB Conference, is an upgrade to the cable TV business. It preserves the existing model of content producers, channels that aggregate content (e.g. HBO), cable headends, wiring, and set-top boxes. The difference is that computer technology is used in the distribution process down to, and including, the set-top box, allowing a number of new services to be provided, such as video on demand and personal video recorders. While the content could theoretically be viewed on a variety of devices, most IPTV schemes include a set of tightly controlled, overlapping digital rights management (DRM) systems, to ensure that the content is only used in an approved manner. These systems go as far as encrypting the links among devices so, for example, only an approved screen can be connected to an approved tuner. This has the practical effect of limiting IPTV to two comparatively closed environments: home TV sets and mobile phones.”
Internet Television

“In contrast, Internet Television, as described by Jeremy Allaire in his keynote, is the distribution of video on the public Internet. While some of the content comes from the same sources that supply conventional TV, such as Comedy Central, there is also a long tail of more niche-oriented content, such as Shipwreck Central and the type of stuff found on YouTube.

The business models resemble cable TV in that there are producers, distributors, and consumers, but the hardware, software, and payment options are far more varied and, some would say, unproven. To the extent that money changes hands, it is mostly for advertising, although various types of subscription and pay-per-view are also possible, and much of the material is offered as a means of promoting content in other venues.”Â