You may have heard of Jeremy Allaire. He's CEO of Brightcove, largely a company that hosts high-quality IPTV shows.
We're not talking goofy YouTube content here. Most of the marquee IPTV content on Brightcove is generated by content creators who might have worked out of their garage a year or two ago- but know what they are doing now.
At Von, Jeremy devoted part of his short presentation to small, independent producers and even niche channels that as he described, are able to contextually serve relevant advertising.
One example of a Brightcove-hosted site, the Jewish Television Network, was mentioned by Jeremy as an example. I've captured the landing page above. The point is, you click and watch a show or clip (say about Passover,which is coming up soon) and you jes' might see a "contextual" ad for a site that offers Passover-related products for sale.
Sounds like a workable IPTV revenue model to me.