This paper studies the conditions under which peer-to-peer (P2P) technology may be beneficial in providing IPTV services over typical network architectures. It has two major contributions. First, we contrast two network models used to study the performance of such a system: a commonly used logical "Internet as a cloud" model and a “physical” model that reflects the characteristics of the underlying network. Specifically, we show that the cloud model overlooks important architectural aspects of the network and may drastically overstate the benefits of P2P technology by a factor of 3 or more. Second, we provide a cost-benefit analysis of P2P video content delivery focusing on the profit trade-offs for different pricing/incentive models rather than purely on capacity maximization. In particular, we find that under high volume of video demand, a P2P built-in incentive model performs better than any other model for both high-definition and standard-definition media, while the usage-based model generally generates more profits when the request rate is low. The flat-reward model generally falls in-between the usagebased model and the built-in model in terms of profitability.