Canadian cable and satellite companies are about to find themselves facing more competition from smaller IPTV (News - Alert) startups. VMedia, Inc. and Zazeen, Inc. are entering the market, adding their weight to telco TV’s challenge on traditional pay-TV.

Vmedia has launched in Toronto after two years of planning and set-top box development, while Zazeen is still in beta. VMedia’s packages are essentially a hybrid IPTV service: they contain most of the channels as those offered by the cable and satellite companies along with apps for popular OTT services like Netflix and YouTube (News - Alert), and access to any app developed for Android, suggesting some sort of Google pact (no announcement has been made).

The TV packages are bundled with Internet service, and start at $20—compared to mainstream competitors, which charge an average of $50 per month.

According to the Globe and Mail, the Canadian Radio-television and Telecommunications Commission (CRTC) has granted about 20 IPTV licenses to smaller companies. A hallmark of the model seems to be keeping things regional. These companies’ aspirations are smaller in nature than the national giants that they’re looking to take market share from.

“Obviously, we are in this to make a profit,” said George Burger, a partner at VMedia, told the paper. “But we’re not trying to grab every last entertainment dollar off the table.”

With IPTV ramping up, the Canadian market is also ripe for an influx of more over-the-top (OTT) companies, which have thus far been limited to Netflix, iTunes and homegrown options like CTV Online and GlobalTV.

But despite an attractive competitive landscape, difficulties remain for anyone looking to start a greenfield pay-TV service.

“We learned the hard way how difficult it would be to license content when you are a no-name company,” VMedia CEO Alexei Tchernobrivets told the Globe & Mail.