Call it European Dis-Union: The battle for supremacy in the Euro TV market continues to heat up with Telefonica scoring a major victory over rival Telecom Italia in its attempts to acquire French media giant Vivendi’s Brazilian broadband operator GVT. Got that?

While the primary focus of that deal appears to be the rapidly expanding Brazilian market, the real significance is likely to be felt by European TV execs, already bracing for the imminent entry of Netflix into France, Germany, Austria, Switzerland, Belgium and Luxembourg.

In the digital age, when deep-pocketed telco companies like Telefonica can offer triple- and quad-play services to audiences fusing TV, mobile, broadband and wireless, the ability to operate and amortize content across multiple territories and platforms is crucial for the likes of Netflix and Sky to continue to grow.

What’s more, the Brazil deal leaves Vivendi’s billionaire chairman Vincent Bollore as arguably the most powerful individual in the European media business, sitting on a war chest of billions of dollars available for media acquisitions to expand further the French powerhouse’s Canal Plus cable network and European film mini-major Studio Canal.

Seismic shifts have been taking place in Europe with more big moves expected. Rupert Murdoch is busy putting together Sky Europe, a pan-European cable and broadband empire that will operate across the U.K., Germany and Italy. Earlier this summer,  21st Century Fox also announced plans to merge Endemol and Core Media Group — which between them own the likes of the Big Brother and American Idol franchises — into the Shine Group, set up and run by Murdoch’s daughter Elizabeth. The strategy there will see the newly expanded Shine emerge as a dominant creator of TV content for both Sky and other buyers.

netflixWhen Netflix announced it was getting into the originals business with Kevin Spacey-starring House Of Cards, the subscription VOD platform could only count on the U.S. and UK as territories in which it fully owned and controlled its intellectual property. The expansion across Europe now means it can amortize the cost of its subsequent series across all its various territories. That means bigger budgets, bigger stars, and even more ambitious programming.

sky_logoSimilarly, by consolidating its European pay TV operations under one corporate umbrella, Sky will be able to greenlight more eye-catching original programming internally without having to wait for an international co-production partner, as was the case with the Sky Atlantic-Canal Plus collaboration The Tunnel.

Sky execs will continue to seek partners where it makes sense, creatively and commercially, but will have greater freedom moving forward.

Telefonica, which has been thrust bullishly by CEO Cesar Alierta into the content business, in July completed its 100% acquisition of Canal Plus Espana, Spain’s biggest pay TV platform, from Mediaset Espana and Prisa.

In a move that showed the importance of emerging markets such as Brazil to European titans such as Telefonica and Telecom Italia, the two companies had been locked in a bidding war throughout the summer for Vivendi’s GVT, which provides broadband, pay TV and telephony services in the growing Brazilian market.

The aggressive Spanish telco was able to one up Telecom Italia, in which Telefonica is also a significant shareholder, in that battle with an offer worth close to $10 billion, around half of it cash, by also offering Vivendi synergies with its newly acquired pay-TV operations in Spain. That was significantly more attractive than Telecom Italia’s offer, which included offering Vivendi a 20% stake in Telecom Italia.

Vivedni HQThe major questions to come out of the Telefonica-GVT deal, from a European media perspective, is what Bollore plans to do next. Already flush with cash from the sales of its stakes in telcos SFR in France and Maroc Telecom in Morocco, as well as video game publisher Activision Blizzard (fresh off a $500 million first day for new franchise Destiny), Vivendi’s share price has risen more than 30% since September 2012.

That was when Bollore first made public his intention to acquire a 5% stake in Vivendi, at the time an unwieldy combination of cable, film, telco, music and video game operations. Under Bollore, Vivendi has streamlined to focus on creating synergies among Canal Plus, Studio Canal and Universal Media Group, the music and media company that Vivendi also owns.

Studio Canal has established itself as a major global film biz player, financing the likes of Liam Neeson-starrer Non-Stop as well as the forthcoming attempt to launch a kids franchise with Harry Potter producer David Heyman’s Paddington, based on Michael Bond’s much-loved Paddington Bear books.

Italy_Flag_TourismThe timing may now be right for Vivendi to embark on its own spending spree. Telecom Italia, which lost out in its attempt to merge GVT with its own Brazilian mobile unit TIM Participacoes, has been left particularly vulnerable following its bruising battle with Telefonica. The Spanish company has confirmed it now plans to exit Telecom Italia fully once its acquisition of GVT has been finalized.

That would leave Telecom Italia open to a takeover or capital injection from an external source. Bollore, currently holder of a minority stake in Telecom Italia as part of the GVT deal with Telefonica, may look to increase that stake in the coming months.

Already a strong presence in Italy thanks to his 9% stake in Mediobanca, Italy’s best-known investment bank, Bollore may also explore other Italian media opportunities. Rumors have been rife in recent months that Silvio Berlusconi’s Mediaset could be available to the right buyer at the right price.

Any deal to merge with, or acquire, Mediaset would indisputably turn Vivendi into Europe’s most formidable media player, with operations in the UK, France, Germany, Spain and Italy. In other words, a true pan-European studio.