SeaChange International has entered the content game after putting up $13.4 million to buy the London-based On Demand Group Limited (ODG).
Under the deal, SeaChange is picking up the remaining 72 percent of the outstanding capital stock of ODG that it did not already own. SeaChange is also on the hook to pay an additional $9 million if ODG meets certain annual performance goals through Jan. 31, 2008.
In ODG, SeaChange is getting a company that aggregates television programming, movies and other content for pay-per-view and VOD services throughout Europe, including U.K.-based MSOs NTL and Telewest. ODG also serves as principal of FilmFlex, an on-demand movie service operated in partnership with Sony Pictures and The Walt Disney Company.
The acquisition fleshes out SeaChange's VOD strategy in Europe, South America and, eventually, Asia, according to company VP of Marketing James Kelso.
Supplying content and content management services opens up an additional revenue stream for SeaChange. ODG, which has 50 employees, ended fiscal 2005 with $10.7 million in revenues, and earnings of about $1.4 million.
By supplying content, "we can get more and more of that [VOD] deal," Kelso said, adding that offering content alongside the system itself also makes it easier for operators to rollout VOD services.
SeaChange is just the latest VOD server and system company to make a content play. Kasenna Inc., a SeaChange competitor, purchased ViewNow, a content aggregator, last year. Unlike SeaChange's plans for ODG, Kasenna is marketing its content service to telcos and other operators in North America.