Here's a description from Wikipedia....
Internet Protocol television (IPTV) is a system through which television services are delivered using the Internet protocol suite over a packet-switched network such as the Internet, instead of being delivered through traditional terrestrial, satellite signal, and cable television formats.
IPTV services may be classified into three main groups:
1-live television, with or without interactivity related to the current TV show;
2-time-shifted television: catch-up TV (replays a TV show that was broadcast hours or days ago), start-over TV (replays the current TV show from its beginning);
3-video on demand (VOD): browse a catalog of videos, not related to TV programming.
It's NOT like IKS (discussions are NOT allowed here) because the IPTV providers have PAID monies to the appropriate organizations to be allowed to feed selective IPTV content to their subscribers. The providers will charge subscribers a fee (as you mentioned in your post) or they will offer a limited service for free when you purchase a STB from the stb vendor. The cost of the fee is usually built in to the purchase price of the STB to cover their fee costs. The stb vendor uses this as a perk to sell more stb units. The providers can shut off these feeds when they no longer support their stb.
But then again, there are and always will be individual(s) and organization(s) that will try to circumvent the legal aspects for monetary gain.