Worldwide subscriptions to IPTV services are expected to reach 19.6 million by the end of this year, up 64.1 per cent from 12 million in 2007, says IT market resaerch firm Gartner.

The report has estimated worldwide IPTV revenues to total $ 4.5 billionn in 2008, an increase of 93.5 per cent from an estimated $ 2.3 billion last year, and go on to reach $19 billion in 2012.

Approximately 1.1 per cent of households worldwide are expected to subscribe to IPTV services in 2008, and Gartner predicts that global penetration will reach 2.8 per cent by the end of 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. ''The video consumption field will become increasingly crowded.''

Portal-based internet video providers such as YouTube and Joost and over-the-top video providers like Amazon's Video on Demand are also presenting competition for IPTV operators, with some developing their own combined set-top box and video download service, like Netflix and Blockbuster.

Western Europe is found to be the region with the largest number of IPTV subscribers, being on track to reach 8.2 million in 2008 and expected to increase this figure to 18.8 million in 2012.

Gartner has identified North America as the largest market for IPTV revenue, and forecast it to to reach $2 billion in 2008 and go on to total $8 billion in 2012.

''Before 2008, the IPTV operators' emphasis had been to spread their footprint and effectively provide a ''me too'' solution to cable and satellite,'' said Mr Jopling. ''In the future, especially in the developed markets, we will see an emphasis on innovation and differentiated pay-TV services.''

Gartner also provides a definition of IPTV services, commensurate with our own at ipTV News, as the use of a carrier-based managed IP broadband network to deliver television and video content services to the end-user's TV set using a set-top box, and delivering picture quality at least equivalent to existing pay-TV or free-to-air services.