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If troubled video-on-demand vendor Diva Systems can't pull itself from the financial brink or find a willing suitor, Charter Communications appears to be well-prepared to live life without what used to be its exclusive VOD vendor.

In May, Charter added Concurrent Computer Corp. as its second source for VOD servers and software, noting that it will use the vendor's MediaHawk system in "several markets this year." Although Charter and Concurrent officials were not in the mood to share the deal's details, a source familiar with the situation said the MSO is already installing Concurrent servers in a number of existing VOD markets, and plans to use the equipment in subsequent rollouts.

The deal marks the end of Diva Systems' exclusive VOD relationship with Charter, which also happens to be a Diva investor.

Charter's decision to spread the wealth could be tied to Diva's tenuous financial standing.

Diva, a closely-held company based in Redwood City, Calif., has laid off 20 percent of its staff in order to streamline expenses and operations. Diva, according to a recent 10-Q filing, said it has enough cash to get it through the end of this month. The company had roughly $20.2 million in cash and cash equivalents as of Dec. 31, 2001.

According to sources familiar with the company, Diva has been seeking a buyer for several months, but potential suitors largely have been scared off by the company's massive debt load, which includes liabilities of $402.2 million and an accumulated deficit of roughly $500 million. Diva's other MSO deployment partners include AT&T Broadband and Insight Communications.

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