SeaChange International (Nasdaq: SEAC) just can't catch a break.

Just when the company seemed to finally have its act together with a concomitant, market-beating stock performance over the last quarter or two, SeaChange reports the loss of a significant deal and takes a 9% haircut.

The video-on-demand, or VOD, specialist saw non-GAAP fourth-quarter earnings rise from $0.01 per share to $0.18 per share year-over-year on 5% higher sales. The results were largely in line with the consensus estimate of three analysts, as was guidance for the coming year. So far, so OK.

But you're not getting the whole picture from the raw numbers. The VOD market is fiercely competitive, with no guaranteed loyalty to any particular brand of software and equipment. Underscoring this fact, SeaChange said that $4.6 million of GAAP revenue was actually deferred revenue converted into current sales because a customer left SeaChange for a competing platform.

There's no word on exactly who that customer might be, though it's probably fair to say that Verizon (NYSE: VZ) and Comcast (Nasdaq: CMCSA) are still on board -- their loss would have a much larger impact on SeaChange's results. We also don't know who stole that business; the usual suspects would include Arris Group's (Nasdaq: ARRS) C-Cor division, Cisco Systems' (Nasdaq: CSCO) Arroyo subsidiary, and stand-alone rival Concurrent Computer (Nasdaq: CCUR).

If that wasn't bad enough, another $4.6 million of sales and $1.9 million of pre-tax profits came from an equity sale, as Dell (Nasdaq: DELL) bought out health-care storage outfit InSite One where SeaChange held a small stake. These are not repeatable revenues, folks.

The market opportunity for VOD products is still alive and well, as detailed in this free Fool report on the top stock to get in 2011, and SeaChange should come back swinging from these setbacks. SeaChange is also diversifying away from relying on cable TV customers and getting into video distribution methods for tablets and smartphones.

So all is not lost, but this years-long sideways crab walk must be testing shareholders' patience. Will SeaChange ever get out of this funk and start running, or perhaps finding a buyer like everybody else in this industry? Add the stock to your watchlist and you'll be the first to know.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. The Fool has created a bull call spread position on Cisco Systems. Motley Fool Alpha LLC owns shares of Cisco Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.