SeaChange Gets Closer to Comcast, Europe

SeaChange ends Q2 with a tighter Comcast relationship and an entree to Europe's budding VoD market

Jeff Baumgartner, Senior Editor

September 2, 2009

3 Min Read
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SeaChange International Inc. (Nasdaq: SEAC) posted slower revenues and a small second-quarter loss, but the video-on-demand (VoD) giant did come away with a sturdier agreement with Comcast Corp. (Nasdaq: CMCSA, CMCSK) and the potential for big growth overseas.

SeaChange said it renewed its software subscription deal with Comcast through the end of 2009 and began commercial deployment of its video server-software combo for Comcast's next-gen VoD architecture, which reportedly is expected to support a library of more than 100,000 titles. (See Comcast Launches 'Project Infinity'.)

SeaChange won another top-five U.S. MSO as a software subscription customer, but it hasn't revealed that company's name.

On a Tuesday afternoon's earnings call, SeaChange execs also offered more color on its $36.5 million play for Dutch video software company eventIS Group B.V., claiming the deal will help SeaChange rapidly add VoD technology and expertise for the European cable market. (See SeaChange Goes Dutch for VoD Smarts.)

SeaChange chief strategy officer Yvette Kanouff said her company has already completed more than 100 integrations for the U.S. cable market, including deployments that use interactive guides and conditional access systems from Rovi Corp. , GuideWorks LLC (the Rovi-Comcast J.V.), Cisco Systems Inc. (Nasdaq: CSCO), and Motorola Inc. (NYSE: MOT), but stressed that the technical environment in Europe is much different.

Across the pond, SeaChange, for example, must also learn to support Digital Video Broadcasting (DVB)-based cable systems and hook into systems operating conditional access systems from companies such as Nagravision SA and NDS Ltd. And there are language barriers to overcome.

"It's a different list of integrations, it's a different amount of work, [and] it's a different amount of focus," she said, noting that having eventIS on board will help out in these areas. That added expertise may also come in handy if Ohio-based cable MSO Massillon Cable TV Inc. is successful in its bid to get the Feds to force Moto and Cisco to offer more support for DVB SimulCrypt (a system that allows more than one conditional access system to operate on the same video program stream) in the U.S. market. (See Cisco, Moto Called Out by Ohio MSO.)

Another new wrinkle eventIS's technology brings to SeaChange is its ability to stitch a VoD application to a linear program feed rather than having to call it up separately.

SeaChange already has U.K.-based MSO Virgin Media Inc. (Nasdaq: VMED) on board, but it thinks eventIS will help it penetrate a still-nascent European VoD sector that's offered some success to Microsoft Corp. (Nasdaq: MSFT), Tandberg Television , and Harmonic Inc. (Nasdaq: HLIT).

"Opportunities are still in front of us for VoD growth in Europe," SeaChange chairman and CEO Bill Styslinger said, noting that his company is already pitching MSOs there on using a combination of SeaChange's servers and eventIS's video backoffice. "It's already happening. Today's been a great day here in Europe."

Not as great were SeaChange's second quarter numbers, however.

SeaChange said revenues were $46.5 million, down from $50.7 million a year ago, attributing the decline to slower sales of broadcast and ad-insertion products. It also posted a net loss of $400,000 (1 cent per share), compared to a profit of $1.5 million (5 cents per share). (See SeaChange Posts Q2.)

Analysts were expecting revenues of $49.5 million and earnings of 6 cents per share. SeaChange shares were down $1.51 (16.97%) to $7.39 each in midday trading Wednesday.

But things are looking up. With help from eventIS (it had 2008 U.S. GAAP revenues of about $13 million), SeaChange expects second-half revenues to be 10 percent better than the first half of the fiscal year.

— Jeff Baumgartner, Site Editor, Cable Digital News



Interested in learning more on this topic? Then come to TelcoTV 2009, the telecom industry’s premier event for the exploration of a comprehensive entertainment convergence strategy, to be staged in Orlando, Fla., November 10-12. For more information, or to register, click here.

About the Author

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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