Microsoft plans to issue an upgrade to its Mediaroom IPTV system as early as August and has named the next generation of its Internet Protocol-based platform Milwaukee.

Shari Barnett, director of media services at Microsoft’s TV division, said the company plans to make the beta version of the application developer’s kit available in May, so third-party firms can start developing services to run on the software. She expects to see new applications coming to market in 2009.

The key differences between the current version of Microsoft’s Mediaroom system and the Milwaukee update are the ability to pull in existing data feeds, including real-time updates, from Web sites to run concurrently on-screen with video streams and the ability to build sophisticated recommendation and personalization tools.

Microsoft recently demonstrated the streaming TV-Web site fusion at the IPTV World Forum in London. The company used feeds and relevant background data from NASCAR’s Web site alongside and/or overlaid with video footage of a NASCAR race.

Marc Watson, commercial director of BT Vision, a major European Mediaroom user, said it would use Milwaukee when it’s available. The IPTV service provider’s hybrid TV/video-over-broadband service had 150,000 customers at the end of February.

“Microsoft’s Milwaukee will give us enormous flexibility in providing recommendation tools and enhanced presentation formats... [including] dedicated advertising and information such as sports scores in the same screen as the content you're watching,” Watson in a presentation at IPTV World.

Watson told attendees that BT has already added an HTML-based browser tool to its BT Vision set-top boxes, which allows customers to customize and create their own channels of content based on what’s available. The Milwaukee upgrade will enable BT to deliver enhanced functionality that will make on-demand video more engaging.

BT also plans to add HD services this year and make a version of the BBC’s iPlayer TV programming service available to its customers in the coming months as it battles with the likes of BSkyB Group and Virgin Media in the UK digital pay-TV services market.