Pay and WATCH could be the start of a new naming convention with lower case letters for services and upper for devices. I like it - time to move on from the "i" naming series.
I think it wasn't called "iTV" because ITV is one of the biggest, and most oldest commercial TV network in the UK. Using it in the UK would have caused too much confusion amongst consumers in the UK as ITV has become a household name here and is well established.
MacRumors did an article in 2012 as to the possible trouble Apple may have in securing the iTV name due to this and possible other trademark infringements: