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–SeaChange-Subsidiary ODG Sells Stake in FilmFlex

VOD and interactive TV technology provider, SeaChange International, announced last week that it has signed a master purchase agreement with a company it described as "one of the five largest cable television companies in the US" and a "longstanding customer" (note: the five largest cable companies in the US are Comcast, Time Warner Cable, Cox, Charter, and Cablevision, all of which–except Charter–are existing SeaChange VOD customers; Charter is, however, a customer of the company’s advertising-insertion solutions). According to SeaChange, the agreement will see the cable operator purchasing its VOD hardware and software, its advertising-insertion solutions, and associated support services. The company says that the deal designates it as the operator’s "exclusive" provider of VOD software and hardware. The agreement has a one-year term, and automatic one-year renewal provisions (subject to SeaChange meeting certain conditions). SeaChange also says that it expects to finalize two other similar agreements in the near future.

Last November, the company announced that it had signed a VOD hardware, software and services master purchase agreement with "one of the largest telecommunications companies in North America" (which [itvt] has learned is Verizon). That five-year agreement covers the licensing of SeaChange’s VOD set-top-box client software, its Axiom component software (note: the latter is a VOD infrastructure solution that is billed as automating the ingest, lifecycle-management and delivery of on-demand content across a range of networks), and its DVD On Demand software (allows navigable, interactive DVD-style movies-with-extras packages to be offered on SeaChange’s VOD platform, and can also be used to offer ITV games; Verizon has stated publicly that it plans to significantly increase the ITV games offerings on its FiOS pay-TV platform this year). The agreement also includes annual software subscription and maintenance services, SeaChange says, and the opportunity for custom software development. The company says that the agreement is structured to incorporate other current and future SeaChange VOD products and services.

In other SeaChange news: in a recent regulatory filing with the SEC, the company revealed that its VOD content subsidiary, On Demand Group (ODG), has sold its stake in FilmFlex Movies–a company that offers a VOD service on the UK’s Virgin Media cable platform–to FilmFlex’s two other owners, Disney and Sony, for £9 million in cash (note: the filing observes that "in connection with this sale, SeaChange is obligated to issue £1,600,000 in shares of SeaChange to the former shareholders of ODG pursuant to the terms of the original Agreement for the Sale and Purchase of Share Capital of ODG, dated as of September 23, 2005…by and among SeaChange, Anthony Kelly, Andrew Birchall and the other parties set forth on the signature pages thereto"). According to the regulatory filing, the FilmFlex purchase agreement prohibits On Demand Group and its affiliated parties, including SeaChange, from offering a competing VOD service on Virgin Media prior to December 31st, 2009, and from poaching FilmFlex employees before December 21st, 2009.

Published in Issue 7.58 Part 2  January 14, 2008   Subscribe: http://www.itvt.com