At IPTV World Forum in London last week, busy conference sessions and a bustling exhibit hall seemed to belie the gloom and doom stalking the economy as a whole.

Reinforcing this impression, IPTV subscribers in Western Europe topped 10 million at the end of 2008, up 45% on the previous year, according to new figures from the Broadband Forum announced on the first day of the event. France was the largest IPTV market in Western Europe, accounting for over half of the region’s subscribers.  Globally, there were more than 21 million subscribers to IPTV services at the end of 2008, up 63% on the previous year.

That said, conference speakers foresaw challenges ahead for the IPTV sector clustering around three focal points: the consumption habits and expectations of digital natives, the impact of web TV, and mobile.

Myles MacBean, Disney Online’s Vice President for EMEA, noted that connected interactive media are now the primary part of kids’ entertainment experience, and emphasised the importance of the “cross-platform, cross-media, cross-business model” world with Disney content available on mobile, console, PC, and set top box – “it’s one platform now”, he commented.

Many speakers emphasised the rapid evolution of mobile: “it’s not about downloading, it’s about connecting” according to MacBean. ESPN’s Robin Ashton highlighted ESPN’s focus on mobile video, and pointed out that in India and China most people’s experience of the web is, in fact, mobile.

Richard Gale, Playboy TV’s Director of Marketing & Sales, commented that he didn’t see much IPTV innovation across Europe, where most activity seemed to be around catch-up and freeview services. “I think the innovation will come from the web TV guys who are waiting for the Ethernet cable to plug into the back of the TV”, he commented. Scale and standards are vital, according to Gale – content owners don’t want to have to develop an application 50 times for 50 different IPTV platforms: “I won’t bother; I’ll build it for the web”.

For the future of TV we should look to Japan, according to Harmonic’s David Price, who wondered if the TV will go the way of the fixed line telephone. “A whole generation has grown up using their laptop as their TV”. In Japan, all TV sets now come equipped with at least one Ethernet port, which led him to ask how long the days of the set top box will continue.

There were of course success stories to share. Michael Comish, CEO of streamed film and TV site Blinkbox emphasised that success was dependent on offering things that are different to broadcast TV: “for us, it’s about being at the front end of the long tail.” Founded in 2006, Blinkbox had 580,000 unique UK visitors in January 2009, putting it just below Channel 4’s on demand service 4OD in popularity.

Danish cable operator YouSee shared an insider’s view of their subscription-based web TV service, launched last year, which features 17 of the most popular Danish TV channels and is available on subscription to all Danish households. The service is designed to create new revenue streams from the non-cabled part of Denmark, and to create a PC-based multi-room solution for subscribers.

As Disney’s MacBean puts it, “It’s a new ecosystem that’s in complete flux”.