SeaChange International, a leading provider of traditional video on demand systems for cable television operators, is selling its broadcast server and storage business and looking to sell its media services business, including On Demand Group. The company aims to focus on software to provide the next generation of multiscreen video experiences. It certainly marks a sea change from traditional video on demand services delivered from specialist servers over cable television systems to a world in which high-quality video can be distributed over the internet using commodity information technology systems and open standards.

The broadcast server and storage business will be sold to an investment consortium and the new independent company will be renamed XOR Media, led by Zheng Gao, the former president of the division. “The industry can expect to see more of XOR Media’s open, cloud-capable and media-optimized servers and storage expand from the existing broadcasting customer base to the entire media and entertainment industry,” he said.

Once state of the art video servers may now be seen as legacy systems in a world where viewers increasingly expect to be able to view video on a variety of screens, online services can deliver greater flexibility at lower cost. SeaChange now presents itself as a provider of an “open, cloud-based, intelligent software platform” — in other words it is looking to the internet for its future.

Annual revenues of $197.7 million to the end of January were down $4 million on the previous year, posting a loss of $1.3 million. The company has been cutting costs and has seen a number of executives leave the business, including the founder and former chief executive Bill Styslinger, chief financial officer Kevin Bisson and more recently Yvette Kanouff, who will not be replaced as president.

Raghu Rau, the new chief executive of SeaChange, said that the company is “actively engaged in the potential divestiture of our media services business.” He said the objective for the company was transform into a pure software provider, reducing costs and improving financial results. “We will continue to invest significantly in research and development by moving investments from legacy to next generation products and building our intellectual property.”

The media services business produced annual revenues of $32.9 million and a modest operating income of $1.2 million. The main media services business, On Demand Group, based in London, serves cable, telco and mobile operators internationally.

The company was formed in 1995 and in 1998 launched the Front Row pay-per-view movie service for cable television in the United Kingdom. In 2002 it partnered with SeaChange to develop video on demand opportunities worldwide and was acquired by the company in 2005. It sold its stake in the joint venture FilmFlex movie service to Sony Pictures and Walt Disney Television International, while continuing to provide content management services.

ODG has relationships with the major movie studios and provides media processing and multiscreen delivery services to support video on demand on third-party operator platforms.