In standards-based IPTV systems, the primary underlying protocols used for:

Live TV is IGMP version 2 for connecting to a multicast stream (TV channel) and for changing from one multicast stream to another (TV channel change).

VOD is RTSP. Currently, the only alternatives to IPTV are traditional TV distribution technologies such as terrestrial, satellite and cable.

Advantages
The IP-based platform offers significant advantages, including the ability to integrate television with other IP-based services like high speed Internet access and VoIP.
A switched IP network also allows for the delivery of significantly more content and functionality. In a typical TV or satellite network, using broadcast video technology, all the content constantly flows downstream to each customer, and the customer switches the content at the set-top box. The customer can select from as many choices as the telecomms, cable or satellite company can stuff into the “pipe” flowing into the home.
A switched IP network works differently. Content remains in the network, and only the content the customer selects is sent into the customer’s home. That frees up bandwidth, and the customer’s choice is less restricted by the size of the “pipe” into the home. This also implicates that the customer's privacy could be compromised to a greater extent than is possible with traditional TV or satellite networks.

Interactivity
An IP-based platform also allows significant opportunities to make the TV viewing experience more interactive and personalized. The supplier may, for example, include an interactive program guide that allows viewers to search for content by title or actor’s name, picture-in-picture functionality that allows them to “channel surf” without leaving the program they’re watching Viewers may be able to look up a player’s stats while watching a sports game, or control the camera angle. They also may be able to access photos or music from their PC on their television, or even use a wireless phone to schedule a recording of their favorite show, or adjust parental controls so their child can watch a documentary for a school report, while they’re away from home.

VoD
VoD stands for Video on Demand. VoD permits a customer to browse an online movie catalogue, to watch trailers and to select the movie he wants to watch. The playout of the selected movie starts nearly instantaneously on the customer's TV or PC.
Technically, when the customer selects the movie, a point-to-point unicast connection is set up between the customer's decoder (SetTopBox or PC) and the delivering streaming server. The signalling for the trick play functionality (pause, slow-motion, wind/rewind etc.) is assured by RTSP (Real Time Streaming Protocol).
The most common codecs used for VoD are MPEG-2, MPEG-4 and VC-1.
In order to avoid content piracy, the VoD content (the movies) is generally encrypted.