Good News!
SeaChange Sees Large Potential In Video-On-Demand Market
03/17/2000
Dow Jones News Service
(Copyright (c) 2000, Dow Jones & Company, Inc.)
By Tom Locke
VAIL, Colo. -(Dow Jones)- SeaChange International Inc. (SEAC) sees a big
opportunity for its digital video server systems in the expected explosive
growth of video on demand among cable TV operators, Chief Executive Bill
Styslinger said Thursday.
The Maynard, Mass., company is projecting 40-plus percent revenue growth in
2000, Styslinger said, partly because of the rollout of video demand by cable TV
operators and partly because of growth in supplying its TV broadcasting
customers with servers.
SeaChange is expecting even higher growth in 2001 and beyond, he said.
Video on demand has already proven itself in the hotel market through on-demand
availability of pay-per-view movies, according to a March 8 report from Janco
Partners analyst Ted Henderson. Now it is starting to move into cable TV
systems.
"Clearly, the residential VOD system provides SeaChange 's most significant
opportunity," Henderson said in his report.
Worldwide demand for servers for video on demand is expected to be about $50
million this year, Styslinger told Dow Jones Newswires after his presentation at
the Janco Partners Institutional Investor Telecommunications Conference in Vail.
After this year, he said, "I think it's going to go up very rapidly."
And costs are going to continue to drop quickly, he said. The equipment for one
stream of video, which can serve 10 movie buyers, cost $1,200 a year ago, now
costs $800, and Styslinger sees it dropping below $500. The lower costs for
video on demand will translate to consumers not only controlling movies, but
other programming as well. "They'll watch TV very efficiently," he said.
Investors have apparently liked what they've heard about SeaChange , which has
seen its stock price increase more than 10-fold from its 52-week low of 5 1/16
to a Thursday closing price of 63 1/4.
Chief Financial Officer Bill Fiedler told Dow Jones that he is comfortable with
the First Call/Thomson Financial earnings-per-share consensus estimates of 1
cent for the first quarter, 15 cents for all of 2000 (compared with 5 cents in
1999), and 41 cents in 2001.
Analysts' revenue estimates for 2000 are between $115 million and $120 million,
he said, compared with $85.2 million in 1999. And they are projecting $160
million to $180 million in revenue for 2001, he said.
-By Tom Locke; Dow Jones Newswires; 303-293-9294 |
