It's hard to deny just how big of a push online video and similar digital services are making these days, a lesson that Spanish firm Telefonica (News - Alert) is taking rapidly to heart. It has aligned itself with Microsoft to launch a new video platform as part of a larger plan to bring more digital services out to its user base.
Telefonica's new video platform will allow it to offer users a variety of new services in video, like time-shifting or multiscreen access across the larger whole of Telefonica's video services. This is, according to Vivek Dev, Telefonica Digital's director of digital services, done in response to customer demand for more video content on more devices.
Right now, meeting customer demands is very high on the list of Telefonica's things to do. The company is not only finding itself in the midst of a terrible economic environment--the Spanish economy may well be one of the hardest-hit in Europe right now--but is also having some problems on a more personal level, as Telefonica itself currently carries a debt load of over 50 billion Euros, or right around $64 billion U.S. Telefonica expects its Telefonica Digital arm to bring in five billion Euros--around $6.391 billion U.S.--in revenue by 2015. Additionally, Telefonica is stepping up its operations in Latin America, which now accounts for more of Telefonica's total revenue than Europe.
Online video is a steadily increasing part of any mobile provider's operations. In fact, it's really a steadily growing part of any Internet service provider's operations. Telefonica taking steps to provide what its users want most will be a step toward keeping those users in the fold, though even this may not be sufficient to fend off the growing threat that is the overall Spanish--and European--economy.
Its movements into Latin America will likely prove helpful, though whether or not that region can provide enough incoming revenue to offset the substantial losses in potential revenue Europe can provide remains to be seen.
It's not a good situation for Telefonica overall, but it is definitely going to go down swinging, if nothing else.
Edited by Amanda Ciccatelli