A rising tide lifts the occasional battleship, too. That's the case for SeaChange International (NASDAQ:SEAC), now the provider of video-on-demand (VOD) services to the U.S. Department of Defense. Provisioning the upcoming Pentagon Media Review System is just the latest high-profile deal in a year in which SeaChange has gone from strength to strength. Last week's earnings report showed a loss, but only half as bad as the year-ago period and with nearly 20% revenue growth.

If you've ever tried a VOD service, it's easy to see why SeaChange management has such high hopes for the future. It's a lot like Google's (NASDAQ:GOOG) YouTube, actually. It's the ability to watch TV shows, music videos, or even feature-length movies whenever you want, without the shackles of a broadcast schedule or even the need to set your TiVo (NASDAQ:TIVO). In a word, it's addictive. As great as my digital video recorder is, my fondest wish is that more of my favorite shows would show up in the on-demand channels.

What's more, SeaChange happens to have quite a dominant position in this market. Browsing through the company's customer list, you'll probably find your cable provider somewhere. Brighthouse Networks, Cox Communications, Comcast (NASDAQ:CMCSA), Cablevision (NYSE:CVC), and Time Warner (NYSE:TWX) cable -- they're all SeaChange clients. The company is now growing internationally, too, and the whole on-demand movement is just getting started.

A Comcast VP recently explained that customer churn drops dramatically when you move from analog to digital cable service, and then drops again if the customer gets a taste of on-demand content. That gives Comcast and its competitors a powerful incentive to market these services. So when SeaChange CEO Bill Styslinger says that he expects "the favorable industry trends driving our top-line growth to continue," it's easy to believe him. Little SeaChange might be a mere dinghy of a company today, but I think it will become a destroyer in a couple of years. Its time has come, plain and simple.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is always in demand, on demand.