VoD has yet to make any single company very, very rich, but it has offered a living to some medium size operations, and this week one of its most established, SeaChange International, showed how the shape of the VoD market is shifting.
Its hardware revenues went through the floor, with its Servers and Storage segment generating only $6.8 million for its first quarter of fiscal 2011. This was a fall of $7.3 million compared to the first quarter of fiscal 2010. But the company still managed to grow revenues substantially, up 11% to $54.1 million due to a huge upswing in software revenues, associated mostly with advertising additions to its VoD infrastructure. The Company’s Software segment had revenues of $40.9 million, up $10.3 million or 34% over this time last year, driven by Axiom and VoD Advertising product revenue in a deal with an unnamed but large North American cable TV provider. SeaChange also increased its Advertising Insertion revenue and added some revenue from its recent acquisitions, eventIS and VividLogic.
SeaChange finished its quarter with cash and cash equivalents of $85.6 million, and no debt, a huge jump from its $48.5 million one quarter ago, brought about mostly by selling its stake in Casa systems with proceeds of $34.1 million.
SeaChange also has a fledgling content business, aggregating content for VoD systems, which it calls Media Services and there it upped its revenues by just over 50% from $4.2 million a year ago to $6.4 million and said it had new content deals in France and Dubai and higher VoD viewing figures from partners in Greece and Turkey.
It will be a hard time going forward for all and any VoD hardware plays, even those with revolutionary technology, unless it can be adapted to Over The Top video services over the internet. And enhanced software functionality is just one of the target areas all VoD players will also be chasing, such as adding addressable advertising.
SeaChange reckons that its second quarter will bring in between $53 and $55 million in revenue and it has reinstated its stock buyback program now that it has a recovery quarter under its belt.