Discovery's VIX Acquires Spanish-Language Pongalo's AVOD Streaming Services

Discovery's Spanish-language VIX digital platform has acquired Pongalo, a Los Angeles-based company that runs ad-supported video-on-demand services, for cash and stock at a "low eight-figure price."

The deal closed Friday and was announced this morning. It marries Pongalo's 14,000-hour library of Spanish-language content from around Latin America and beyond with Vix's huge social-media presence and ad-sales team.

"It’s pretty cool," said Pongalo CEO Rich Hull, who like the rest of the company's 12-person staff, will remain after the deal. "It’s so the Wild, Wild West in digital media. So to now have the two things we didn’t have, which is scale and profitability, it’s great."

Pongalo has surpassed 1 billion minutes streamed so far this year, up about 300 percent over 2018, on its AVOD services, NovelaClub and Moovimex. The company expects to hit 2 billion minutes streamed by year's end, Hull said. Later this year, the Pongalo unit will launch another AVOD service, branded VIX TV, as "more of a general-population product for Latinos," Hull said.

"We’ve really leaned into the AVOD channels," Hull said. "I positioned Pongalo as a Hispanic Tubi TV, which is a real white space in the market. What being part of Vix does is two big things in that regard: They’re far and away the biggest player in social media for Latinos. To be able to talk to that audience for free, that’s significant, because usually you have to pay to talk to them. And they’ve got a 30-person sales team across two continents. It would take me years to build that." 

VIX Chairman and CEO Rafael Urbina said, “The opportunity for AVOD with Latino audiences is immense. Our new VIX TV AVOD service, along with Pongalo’s great existing services, will create a marketplace of Latino digital-media brands, all sold under one roof by the same advertising-sales team.”

Pongalo also offers an ad-free subscription upsell for its services, and has found significant audience uptake there, Hull said. The services are available "anywhere you'd expect us to be," on more than 30 different platforms, including Tubi.TV, Roku, Pluto.TV, and Amazon, among others.

VIX claims 300 million followers on Facebook alone, and calls itself "the largest multi-platform Latino digital media audience in the world." According to ComScore, VIX’s lifestyle properties are No.1 in Mexico, Argentina, and Brazil, and third in the US Hispanic market behind traditional Spanish-language TV powers Univision and Telemundo.

Pongalo was founded in 2014, in Los Angeles. Hull built a network of 40 suppliers, including RCTV in Venezuela, Carolco, Columbia and Revolution Studios. Where possible, Hull said he secured global rights to stream shows, allowing most of the Pongalo library to play worldwide, even finding significant audiences in markets such as Turkey, Israel and Asia with their own fondness for the telenovela style of soapy dramas that have been a mainstay of NovelaClub.

Pongalo also has spun some of the Spanish-language properties it controls into English-language versions for the U.S. market. The most notable "translation" was Jane the Virgin, starring Gina Rodriguez, and based on a Mexican telenovela. The show ran for 100 episodes across five seasons on the CW Network and won a Peabody Award and a Golden Globe.

Pongalo also backed feature projects, including this year's The Public, which was produced, directed, written and starring Emilio Estevez. Other cast members included Alec Baldwin, Jena Malone, Taylor Schilling and Christian Slater. The film grossed $573,000 in its U.S. theatrical run.

As part of the acquisition, Pongalo's Hollywood location will become the Los Angeles offices of VIX, which is headquartered in Miami and also has offices in Mexico, Brazil and Argentina. Hull will become the merged operation's chief strategy officer.

Pongalo was backed by institutional investors Canyon Creek Capital, the Carlyle Group’s Revolution Studios, Digital Bridge Holdings and 500 Startups.