Worldwide subscriptions to Internet-based television platforms are on track to reach 19.6 million subscribers in 2008, a 64 percent increase, according to analysts at Gartner.
Revenue from worldwide Internet protocol television is forecast to reach $4.5 billion, up 93.5 percent from a year earlier, with Western Europe boasting the largest number of IPTV subscribers and North America the largest market for IPTV revenue.
It forecast that 1.1 percent of households worldwide would be using IPTV in 2008, and expects that to rise to 2.8 percent by 2012.
"The biggest change since 2007 is the rapid advent of new entrants making inroads in consumer video consumption and placing greater demands on IPTV operators to innovate," said Gartner research director Elroy Jopling.
Gartner cited the new competitors as portals such as YouTube
and Joost, social networking sites like MySpace and Facebook and broadcasters launching new offerings such as the BBC's iPlayer catch-up service and Hulu owned by NBC and Rupert Murdoch's News Corp.
"Before 2008, the IPTV operators' emphasis had been to spread their footprint and effectively provide a 'me too' solution to cable and satellite, said Jopling. "In the future, especially in the developed markets, we will see an emphasis on innovation and differentiated pay-TV services."
Gartner defines IPTV as a managed broadband network which delivers high picture-quality television and video content to a user's TV set via a set-top box. Content delivered over the Internet or only to a computer is not included.