There's an interesting overview on the steady takeup of IPTV in Europe in this press release from InfoCom. Apparently growth is strongest in non-cabled countries. However, what it doesn't point to are countries where the broadband infrastructure isn't capable of supporting IPTV growth (eg Spain).
Meanwhile both BT and Deutsche Telekom are claiming over 100,000 customers for their IPTV services - but I'd love to know the acquisition cost per viewer. This is a long term game, but anything under 1 million users is likely to be loss making for major service providers. Indeed, Virgin Media fail to make money from a quad play and they have over 6 million customers.
More interesting is that Tiscali TV are very low key in their promotion of the IPTV service they acquired in taking over Video Networks.
Cost of accessing this market is likely to fall considerably as new, cheaper boxes such as Daily Media's Win CE box become available. The basic components of an IPTV service in the UK needs to be:
an advertising driven business model
a killer app or killer content (usually football...)
all Freeview channels
access to the new Kangaroo service that will roll up UK on demand dervices
a decent, easy-to-use web browser
on demand video
a killer EPG
BT Vision has most of the above, as well as phenomenally marketing clout, but still can't make significant inroads.
There is a second model, which is to market STBs as 'the second box' to narrowcast markets.
However, the real market here, in my opinion, is for STBs integrated into screens as companies such as Sony, Phillips and Samsung realise that they can control the viewer's eyeballs; IPTV services will need to become less of a boxed product and more of a service provision.
Convergence between IPTV and internet TV is on the way.