With on-demand video fast becoming a popular choice for cable TV viewers, it stands to reason that the companies providing the backbone of the systems should be enjoying greater growth and profits, too. Reason and the markets, however, don't always coexist.

Take, for example, SeaChange International (NASDAQ:SEAC). This leading provider of video-on-demand servers and software systems for cable TV operators like Cablevision (NYSE:CVC) and Time Warner (NYSE:TWX) reported fourth-quarter and full-year earnings that would make investors want to hit the fast-forward button.

Despite revenues rising 11% in the quarter, profits fell to a $2.9 million loss, compared to a $2.2 million loss last year. While the company pointed to higher research and development costs as one of the reasons for the greater shortfall -- investments in future growth are generally considered to be good expenses to incur -- the real growth was seen in general and administrative costs, which grew by more than 47% over the previous year. Add in an additional $1 million increase in intangibles amortization, and total operating expenses soared 18% year over year. The resulting $0.10-per-share loss was $0.04 more than analysts had expected, on revenues that fell by $2 million.

SeaChange has been experiencing a slowdown in on-demand cable spending all year. The company has been holding its breath waiting for the digital simulcast deployments made by cable operators to kick in. For that reason, SeaChange says that this coming fiscal year will see the company return to positive cash flow generation.

For example, Comcast (NASDAQ:CMCSA) will soon be offering on-demand content with embedded advertising. SeaChange began as a company that allowed cable operators to digitally insert advertising into their programming and captured about 80% of that market. Competitors like nCube, which was bought by C-Cor (NASDAQ:CCBL), and Concurrent (NASDAQ:CCUR) were left haggling over the remaining market share.

Importantly, SeaChange's balance sheet remains debt free, and it has used its significant cash to buy assets in Europe, where it sees even greater growth potential.

Not surprisingly, the company's stock took a hit after the earnings release, falling almost 10% in after-hours trading. That might just present an opportunity to investors to get shares at a discount. This company is still strong, and it's poised for the sea of change occurring in cable-TV programming.

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Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.