ANAHEIM, Calif. – Verimatrix, an established leader in IPTV content security, used TelcoTV to flex its market muscle and announce a series of new customers including two major wholesalers -- SES Americom’s IP-Prime wholesale distribution service and 40 of Avail Media’s independent telco affiliates – as well as well as Gorham Communications, GTel Telecommunications (with Falcon IP/Complete) and Pioneer Telephone.

Steve Oetegenn, chief sales and marketing officer, admitted in an interview, however, that he expects to see a flattening of the IPTV market that could signal a shakeout ahead in the content security space.

“We are seeing signs of cutbacks across the industry, and I think we will see some shakeout,” Oetegenn said. “This is a finite market, and in its own right, IPTV is not a huge market right now. We are seeing some competitors try to address this by adding middleware, which is something we think is a mistake. We believe we achieved our market leadership position because of our partner ecosystem and by being extremely easy to work with, extremely fair and extremely loyal.”

As a result, Oetegenn said, Verimatrix is now getting 80% of its business through partners, up from 60% in 2007. The company’s business from its existing customers has also been strong. “We passed our forecast reorders from existing customers for the year in June,” Oetegenn said.

As IPTV has gotten more mature, there have been a growing number of more sophisticated attacks on deployed systems – something Verimatrix expected and predicted a few years back. “The challenge is always to make sure we stay one step ahead,” Oetegenn said. “One of the advantages of IP is that you can see what is going on at the client end, so we can monitor attempts to infiltrate the network.”

The move to extend IPTV content to mobile phones poses new challenges because it moves protected content out of the secure IPTV domain. “The content owner may not see mobile content as highly valuable as an HD stream to a 60-inch monitor, so the security requirements may not be as stringent,” Oetegenn said. “But what you need are robust security software clients in the mobile handset, which moves you more into the realm of digital rights management than traditional conditional access.”