SeaChange International Reports Fiscal Third Quarter 2021 Financial and Operational Results; Company Sees Strong Demand from Content Owners for New Video Apps' Platform Download as PDF December 10, 2020 4:05pm EST Related Documents Audio
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10 New Customer Wins Secured Since August 2020, Spread Across the Company's Offering Suite, Including Wins for Framework, Advertising Solutions and Video Apps Platform WALTHAM, Mass., Dec. 10, 2020 (GLOBE NEWSWIRE) -- SeaChange International Inc. (NASDAQ: SEAC), a leading provider of video delivery platforms, today reported financial and operational results for the fiscal third quarter ended October 31, 2020. The Company also reported strong demand from content owners for the Company's new Video Apps' platform, which enables content owners to quickly and seamlessly launch direct-to-consumer (DTC) TV and video applications directly through Smart TVs and connected platforms.
SeaChange's New Video Apps Platform Addresses Burgeoning Demand from Content Owners to Deliver High-Quality TV and Video Content Directly to Consumers
SeaChange's Video Apps platform addresses the TV and video market's accelerated shift in spending in response to COVID-19 changes in consumer behavior. The global pandemic forced many service providers to invest heavily in technology infrastructure and reduce or eliminate investment in video platforms. Content owners, particularly independent content owners, are now accelerating their content distribution strategies and investments to deliver high-quality content directly to consumers.
SeaChange's Video Apps allow content owners to quickly launch over-the-top (OTT) TV apps to meet the global demand from consumers looking to stream high-quality video content directly through Smart TVs and connected platforms such as Roku, Amazon Fire TV, Chromecast and Apple TV among others.
Independent content owners are focused on advertising to monetize direct-to-consumer TV applications. SeaChange's Video Apps leverages the Company's proprietary Ad Insertion module to automatically source ad buyers, define ad placements, and programmatically fill advertising slots in real-time. With SeaChange's Ad Insertion module and rich data analytics, content owners are provided with greater insights into their audiences and generate higher advertising revenue right away.
Revenue-share model allows SeaChange to meaningfully participate in the growing OTT market ad spend, which is expected to exceed $14 billion globally by 2023, according to industry analysts.
Strong customer demand and robust pipeline for Video Apps. Since the launch of the platform in November 2020, SeaChange has secured four (4) wins and is actively engaged in discussions with approximately fifty (50) content owners, who are in varying stages of the sales cycle.
Third Quarter Fiscal 2021 and Recent Operational Highlights
Launched Video Apps' and established a robust sales pipeline with active discussions with approximately 50 content owners in the first month since the launch of the platform.
Secured the most meaningful win in Company history with one of the largest mobile network operators in the world for SeaChange's Advertising Solutions. The aggregate potential revenue opportunity over the next three years is approximately $100 million based on the customer's annual unsold ad inventory and the revenue share SeaChange would receive to monetize it.
Secured six (6) new customer wins in the third quarter, including:
Framework' Video Platform wins;
Framework Video Platform with Video Apps wins; and
Advertising Solutions (formerly Unsold') win.
Secured four (4) new customer wins in the fourth quarter ending January 31, 2021, including:
Advertising Solutions wins; and
Framework Video Platform with Video Apps win.
Since SeaChange launched the Framework platform in March 2019, the Company has secured 39 wins worth an aggregate total contract value of approximately $63 million.
Ongoing cost-optimization measures produced an 8% sequential decrease and 45% year-over-year decrease in operating expenses in the fiscal third quarter of 2021.
Management Commentary
The dramatic shift in service provider spending since the onset of the pandemic has impacted the near-term demand for our Framework video delivery platform, but we've adapted, said SeaChange CEO Yossi Aloni. In recent months we've pivoted to addressing the immediate needs of content owners who are looking to develop an effective over-the-top, direct-to-consumer strategy to stay competitive, monetize content, and build deeper levels of engagement between audience and brand. Historically, for content owners to directly launch a DTC TV service, the process was overly complex, costly and involved disparate technologies. With SeaChange's Video Apps platform, providers can now quickly and seamlessly operate their own streaming service while maintaining a direct relationship with the consumer. Not only does this new approach enhance content owner margins, but it also creates greater long-term business value by enabling full control over the service, data and customer relationship.
Looking ahead, SeaChange is well positioned to enable the industry's ongoing direct-to-consumer movement. Video Apps is providing content owners with the platform to capitalize on the exploding demand in high-quality streaming content and the growing advertising OTT ad spend. Over the next five years, we expect thousands of direct-to-consumer TV Apps will be launched with a need for a built-in ad monetization strategy. Similar to how Wix democratized websites for small to medium businesses, SeaChange's Video Apps platform will look to play
