Other big players in the industry have taken notice of IPTV’s recent traction. Ericsson, in an effort to court telcos that are interested in providing new services, has entered into an agreement to acquire Microsoft’s Mediaroom IPTV middleware platform, the technology that powers both U-Verse and Prism TV and is offered by more than 40 operators worldwide. In an April press release the Swedish network-equipment manufacturer claimed that the deal, which is expected to close later this year, would make it an IPTV “industry leader.”

MRG’s “IPTV Market Leader Report, 2013” ranks Microsoft as the only company outperforming its global competition in multiple categories. The software pioneer “continues to excel in North America, taking the top spots in VOD [video on demand] and content protection due to its relationship with AT&T,” said Norm Bogen, MRG’s vice president of research, in a news release announcing the report’s publication, and it “leads in VOD for Western Europe, where it has large IPTV providers as customers.” Meanwhile, SmartLabs tops the VOD field in Eastern Europe, Castis is number one in Asia and Anevia is newly dominant in the Middle East and Africa.

IPTV data

Service providers that are struggling to differentiate themselves with IPTV offerings are sitting on a whole bunch of valuable usage data, which a whole bunch of advertisers would love to get their hands on.

While most over-the-top (OTT) service providers have already embraced usage data—think Netflix and the algorithms it employs to predict what you’ll want to watch next—IPTV players that want to open new revenue streams and compete with OTT providers need to figure out how to liberate that data from their networks (data that reflects quality of experience, or QoE, is also critical). The results will allow buyers to slice their budgets as thinly as the new market segments that are currently driving consumer habits, because the data will be far more reliable and actionable than Nielsen’s ratings could ever hope to be.

Yes, in spite of its artful sampling, the company’s audience-measurement system is woefully inaccurate. Advertisers want to spend their money on actual viewers, so as IPTV uptake evolves, capturing viewer data on a service provider’s network will become more of a priority and, from an advertiser’s perspective, spark a real sea change.

Historically, the most successful online-video ads have been 15- and 30-second spots repurposed from “free,” or broadcast, TV. But once IPTV gains momentum, this stale arrangement is likely to give way to more targeted and creative messaging that’s based on usage and QoE data, giving service providers a shot at capturing the ad dollars that are shifting away from CBS, ABC and the other traditional broadcast networks.

IPTV security

Content creators are relentlessly lobbying for the strengthening of security as a means of protecting their investment. When content was merely delivered to a provider-controlled set-top box on a managed network, keeping the genie in the bottle was a simple affair, so to speak. That’s why those same content creators “are looking for a set of security requirements similar to those of a set-top box,” says Steve Christian, VP of marketing for Verimatrix, which specializes in security solutions for video service providers. But these days “subscriber rights need to be harmonized so the experience looks similar across multiple devices. Customers want to see a consistent offering.”

As service providers make a good-faith effort to boost security, content creators become more willing to offer their programming to the ones that distribute it over public networks. But in Christian’s opinion, the ultimate service differentiator, the one that will offer access to the big-time, broadcast-level advertising dollars, is what he calls “linear” video, i.e., live sports, breaking news and other types of “event” programming that television has traditionally captured better than any other medium. A number of service providers feel that linear video isn’t a pressing concern, he says, “but I think that’s naive.”

And once that last bastion of the broadcast kingdom has been breached by the online world, there’ll be no going back to the old set plugged into the living-room wall. The Zero-TV/cord-cutting revolution will be televised—if you count live streaming to a connected TV, that is.