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InContext / An inside look at the business of digital content

Latino audiences translate to revenues

April 15, 2021 | By Rich Hull, Senior Vice President – Univision; President – VIX (a subsidiary of Univision) @Hull_Rich

Earlier this year, VIX was acquired by Spanish-language content leader Univision. It was the culmination of a six-year journey, which started out as my effort to disrupt, well, Univision.

Around 2015, I stumbled upon the statistic that Latinos would soon represent 20% of the United States’ population. It spoke to me because my Texas roots meant that Hispanic media had always been a part of my world. Pretty soon, I had decided that my next media venture would be creating a mobile-focused streaming service for what appeared to be a drastically underserved U.S. Latino digital media audience.

By the time that our Pongalo service launched as a $5.99 per month subscription offering for U.S. Latinos, I had rounded-up digital rights to thousands of hours of Spanish-language content. I’d also assembled a group of shareholders and mentors who included some of the smartest people in media. That meant that the Pongalo team could tap into a deep bench of expertise from folks like former MTV Networks Vice Chairman, who has Puerto Rican roots, Herb Scannell, and former Univision digital chief Kevin Conroy.

Like all good success stories, we promptly fell on our face. But we learned. We learned that building a video streaming technology platform is not for the faint of heart. We learned to license not only U.S. content rights, but also long-term international rights. That’s because our eventual expansion across Latin America presented a massive opportunity. And we learned that we absolutely did not want to compete with deep-pocketed players like Apple, who were making noises about coming into the subscription streaming space.

We eventually added Discovery Communications veteran Rick Rodriguez to our team. And, after borrowing a bit from the early playbooks of TubiTV and Pluto, Pongalo quickly evolved into the free, ad-supported streaming space. When it did, every metric went through the roof. Despite our early stumbles, we had clearly found the right model.

The race to scale

By 2019, scale had become the name of the game in media. In a world where Disney needed to buy Fox to gain scale, even a dominant spot atop AVOD in the still-unproven Latino digital media market wasn’t part of the conversation. If Pongalo was ever to be acquired by a larger media organization (and I believed it should be), we needed scale.

So, about a year ago, we combined Pongalo’s streaming service with Rafael Urbina’s VIX. Rafael had built a powerful social media megaphone of almost 100 million Latino Facebook followers. He’d also put together a potent ad sales team of over 50 people stretched across two continents. By the time VIX was acquired by Univision in 2021, our streaming service offered more than 20,000 hours of content that entertained millions upon millions of Latinos each month.

Today, the VIX team, now under the leadership of new Univision CEO Wade Davis, also helps to manage PrendeTV, Univision’s recently launched free, premium ad-supported streaming service. And the results have been spectacular. Early indicators tell us that PrendeTV and VIX are finding eager, content-hungry audiences across platforms.

The still-untapped opportunities

Our success (so far) does beg the question, however, of why no major media company had previously built a standalone service that focused on the free streaming opportunity for U.S. Latinos.

To be fair, Latinos have traditionally been easy to overlook in favor of general population audiences, who have always seemed to capture all the oxygen in the front-page streaming stories. But in a day and age of always-improving data, we now know that that was foolish.

According to the 2020 LDC U.S. Latino GDP Report, if the economic contribution of U.S. Latinos was its own country, it would be the eighth largest in the world. That would exceed even Italy, Brazil, and South Korea. In fact, between 2017 and 2018, the U.S. Latino GDP’s growth exceeded that of non-Latinos in the U.S. by more than 4.5x. Yes, 4.5x! That would make it the single fastest-growing GDP in the world during that period.

With this immense opportunity in mind, media companies need to be thinking about how they can capture a share of these vast U.S. Latino revenues.

Keep moving

Mobile is one of those places. Latinos drastically over-index for having mobile devices, and those devices tend to be their primary connections to the internet. But many media companies seem solely focused on delivering connected TV experiences. And despite PrendeTV and VIX’s many successes, Latinos still remain underserved on mobile. And they will likely continue to be so until the industry can create media products that play by the unique rules of a mobile-first experience – mainly simplicity.

For instance, at one point, most major media companies continued to push TV Everywhere apps that required an engineering degree to authenticate. We were the first to remove registration entirely from the VIX app. That meant that we had to innovate clever ways to build data around our audience. But if the premise of AVOD is to show ads to as many people as possible, why put up barriers?

The payoff for media companies in targeting Latinos is data. The genius of Amazon comes down to, “Since you bought this, you might also like this.” And the opportunity around underserved Latinos and mobile is similar. It’s a treasure trove of data just waiting for companies that are willing to lean in – in-language and in-culture. That data translates into revenues.

Over my six years navigating Pongalo, then VIX, and now Univision, I have heard countless voices encouraging media companies to target Latinos because it creates more diversity in our audiences. Undoubtedly, that’s a true and powerful reason in and of itself. But, with that, you will also make more money. That’s a reason media companies can not only understand, but it’s one that they need to capitalize on.

Abut the Author

Rich Hull is Senior Vice President of Univision, and President of VIX, Univision’s recently acquired digital media subsidiary. As a digital and traditional media company founder, operator and investor, Rich has constantly led the innovation of new ways for delivering content and empowering diverse voices. Rich previously collaborated with DCN Editorial Director, Michelle Manafy, on their multi-award-winning book, Dancing With Digital Natives: Staying in Step With the Generation That’s Transforming the Way Business Is Done.

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