HD Helps SeaChange

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Despite a difficult economic climate, the rapid move to high-definition production and transmission has helped SeaChange International continue to report strong sales in its broadcast division in recent quarters. Chris West, the company’s vice president of worldwide broadcast sales, talked to HD Update about the impact that HD is having on SeaChange’s businesses and some of the challenges broadcasters face as they attempted to rapidly upgrade to newer technologies. An edited transcript follows:

Q: How strong is the business right now given some of the economic problems facing the broadcast business?

A: The bottom line is that our business is in a major resurgence right now. We’re at record highs in sales for the company overall and broadcast itself is one of the instrumental product lines that are helping produce this very large growth for our company.

Given the fact that a lot of companies are having a lot of difficulty, we are pretty proud of the fact that our business is growing as fast as it is.

Within your area of interest -- the HD arena -- a lot of our broadcast growth is being fueled by the growth of HD. We have focused on HD for some time so that has been very key to our growth.

[Beyond that] the success of our entire broadcast platform is predicated on our software codecs. That is a big differentiator for us versus a lot of our competitors that are hardware based. Because our codecs are in software, we are able to do a number of modifications for individual customers very quickly. If you have hardware codecs built to hardware chip sets, you are not going to go back to IBM and have them modify those chips because you want to offer a new service.

[For example] we recent won a massive deal down in Australia with Southern Cross Broadcast. They needed very specific teletext functionality to their indigenous Australian market. Omneon and others said it would take them six to nine months to make those modifications. We made them in two weeks because our codecs are in software. We have hundreds of engineers in our software codec team and that huge investment in the software realm has allowed us to do a lot that others can’t.

Broadcasters are getting their budgets tightened up and they have to do things on a more economical basis. So, we are bringing new solutions to the broadcast market, like our flash memory server, which allows people to do things more economically.

The flash memory servers we rolled out to our big broadband customers, we’ve now brought to the broadcast market, where they have the same value proposition. The reliability is 100 times greater than spinning disk drives. The power consumption is far less. Heat dissipation is far less. I have broadcasters all over the world who are interest in those.

That makes us the only transmission server supplier among the indigenous U.S. based server suppliers with a flash server solution. So it has really gotten a lot of momentum and visibility.

Q: How do you see the impact of HD on the business internationally?

A: As I mentioned, HD has been very important for us as a company and I would say we’ve been far more successful internationally than we even have been domestically. We were first one to bring HD out in China. In India, which is one of the world’s fastest growing market, we just won a major sale to the first news channel down there [NewsX] preparing to do HD. We’ve had [HD related] deals in Korea, Singapore, South America, and certainly in Europe, where we’ve been involved in dozens of HD rollouts.

We’re also a big player in what we call our simulcast codecs. A lot of people are very interested in that capability because in these early days of HD it is very unusual to see a station just embrace HD completely unless they are a total Greenfield operation. So they need to convert from SD to HD or HD to SD.

We also have an entire software upgrade path for people who are SD now but know they are going to go HD in the future. So someone can buy a SD codec now and then later on, with simply an software update, the product rolls right into HD. That is very attractive to people. They know they can invest now and have an HD guaranteed platform.

Q: As you look through the end of the year into 2009, how do you see the demand?

A: I believe the business is growing over all in that broadcast will spend more this year than they did last year and I don’t see that changing. I do however see that landscape changing as to which businesses are going to get that business and revenues. There are vendors that are being hurt.

Personally, looking forward, I don’t think these big IBC, NAB shows are quite as critical as they used to be. We saw Avid and Apple not even attending NAB.

I know that we as a company going to have much more of a regional focus when it comes to shows -- shows in China, Japan, Broadcast Asia in Singapore. We are going to be investing in regionalized show, with smaller booths rather than these gigantic one-off at IBC and NAB.

So I predict that vendors will tone down the investments in one or two shows and try to go at a lot of smaller regional shows.

We [had] a much smaller booth at IBC. Is that reflective of a reduced commitment to the broadcast market? Absolutely not. We will have a lot more of these smaller shows and in fact invest more in shows overall. So people shouldn’t be misled by what they see. It is just a different way of investing.

Q: How do your work for broadcasters and your work with multichannel providers complement each other?

A: Being active in both is a unique advantage for us. The telcos like Verizon and cable operators like Comcast or Cox are all starting to invest in broadcast operations within their own broadband delivery mechanism. They want to have program origination. They want to have a multifaceted delivery capability and our broadcast solutions are making a play there. That is a great benefit for us and give us a big opportunity for our broadcast products because we are so strong in that area. We are No. 1 in that environment.

And at the same time our broadcast customers recognize the importance of having their solutions work with the broadband content delivery mechanisms. Our competitors are absolutely insignificant in the area. So the program providers are working with me because they want to be able to better deliver content to their customers, which are also our customers.

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