The first is using a remote path, which is a URL of an M3U playlist found on the net.
Here are the instructions on how to install PVR IPTV Simple Client:
M3U is a file format for defining multimedia playlists by storing the locations of various media files. By loading the playlist, you can watch free IPTV with thousands of channels from all around the world using the powerful live TV of Kodi. The PVR IPTV Simple Client add-on allows loading an M3U playlist to Kodi.
