Pay-TV operators' investment plans for multiscreen video services and delivering live and file-based video content to subscribers with multiple devices are continuing to ramp up, as digital distribution moves into a role as basic competitive table stakes.

Value-added services like second screen apps and enhanced DVR capabilities have gained in popularity due to the convergence happening in the living room between smartphones, tablets and connected TVs, according to Infonetics (News - Alert) Research, and most pay-TV providers know it. For instance, the tablet has become the de facto second screen: 47 percent of operators surveyed by Infonetics support tablets as part of their multiscreen service now, and that’s expected to grow to 89 percent by 2015.

And yet, learning to leverage those screen in an appropriate way from a content perspective continues to be an obstacle. "In a growing number of markets, pay-TV providers find themselves at a crossroads," said Jeff Heynen, principal analyst for broadband access and pay TV at Infonetics Research. "Their traditional business models are under attack as telco IPTV (News - Alert) providers, over-the-top (OTT) providers and consumer electronics companies - Netflix, LOVEFiLM, Amazon, Hulu, Apple, Samsung, and others - continue to divert revenue away from them."

As they strive to keep up, cable and satellite companies are countering the threats with continued rollouts of TV Everywhere services, dedicated mobile apps, second-screen offerings and better online content integration. That’s requiring shifts in strategic spending priorities as they cast around for the best technology to shore up their future plans, particularly as UltraHD 4K, adaptive bitrate, increased content security concerns and other market evolutions continue to play out.

"Pay-TV operators are simultaneously grappling with how to address the desire among subscribers to take their content with them wherever they go, whenever they go," added Heynen. "The net result is a major change in what equipment pay-TV operators invest in to ingest, encode, transcode and play out video content, as well as how they negotiate with content owners for the right to distribute content across multiple formats."

Infonetics found that Cisco (News - Alert) is the most familiar vendor of multiscreen video equipment to date, but digital distribution is still a relatively new service offering for many pay-TV operators. That opens the door for other multiscreen equipment vendors to demonstrate the reliability of their products and provide support to customers.

Things are shifting on the software side as well: Apple (News - Alert)'s HTTP Live Streaming (HLS) meanwhile currently leads video-streaming protocols in use by respondents; however, Microsoft's Smooth Streaming closes in by 2015, according to Infonetics’ forecasting.