Sales were up, leading to a narrower loss for SeaChange International in its first fiscal 2008 quarter.

Total revenue for the quarter was $38.8 million, up 17 percent compared to total revenues of $33.2 million for the first quarter last year, SeaChange’s fiscal 2007. The net Q1 loss was $3.7 million, an improvement on a loss of $4.4 million a year ago.

The net loss included $1.1 million of income tax expense in connection with the taxable gain on the transfer of assets from the On Demand Group’s (ODG) U.K. operation to its announced German joint venture with Tele Munchen Gruppe, a leading German video content provider.

Revenue in the Broadband segment, which includes video-on-demand and advertising insertion hardware and software, was $19 million, an increase of $2.7 million (also an increase of 17 percent) compared to last year.

Year-over-year revenue growth in the first quarter was driven by $6.4 million of VOD software subscription revenue principally tied to Comcast’s renewal of its software subscription program, the company said. Last year’s first quarter had no software subscription revenue.

In addition, $1.7 million of higher advertising insertion revenue in this year’s first quarter compared to the first quarter of last year was offset by a $5.6 million year over year reduction in VOD systems revenue. The reduction in VOD systems revenue resulted in part from $2.9 million of systems shipped in the first quarter for which revenue was deferred at April 30, 2007, as compared to no deferred VOD systems revenue in last year’s first quarter, SeaChange explained.

The remaining reduction in VOD systems revenue from last year’s first quarter stemmed from lower systems shipments primarily to U.S. domestic service providers.