Villanueva: The linear market is going to have to readjust and come up with an offer that is not the same TV package

SOMOS Next: We use intuition to decide what path to take with what data reveals
27 de octubre de 2021

‟There is so much data available about users and about what they want to watch, that intuition must be used to decide what to do with that data you have at hand and what path to take," said Luis Guillermo Villanueva, Chief Operating Officer at SOMOS Next on #PRODUprimetime with Richard Izarra.

‟We must never forget data, but if you are going to take the path of data purely, using what it reveals first, and do everything based on that, you are taking the risk of turning monotonous. You must use intuition to handle that data and create variety in your channel, generating different formulas that can work, instead of clinging on to just one. There, I would say, lies the separation between intuition and data" added that young executive, driver of SOMOS Next, a division of the SOMOS group, that is celebrating its fifth anniversary and successfully operates three streaming channels: FlixLatino, FlixLatinoKids, and Pingüinitos.

‟Today, I have the pleasure to be with a young entrepreneur, the next generation of our industry. He has specialized in OTT services and has a cum laude degree in Finance and Business from Boston. One of his creations, the FlixLatino channel for US Hispanic, has extremely good programming and films with an affordable subscription. It has gained distribution on Sprint, on Amazon, on Dish, Apple, Google, and Comcast. Additionally, it has grown the subscriber base by 200% last year, and 230% in 2021 so far. He is Luis Guillermo Villanueva from the SOMOS Group, the company founded by his father Luis Villanueva”. That was Richard´s introduction.

‟On FlixLatino, after a few years, I feel we have been able to have the right programming. Technology has followed programming, and we have managed to connect directly with the Hispanic market here in the US, which has reacted very well to our programming, our price, our quality, and what we want to present to it. We have felt very well supported in the last two years, although the whole five years have been good, lately, we have felt that the audience is connected with us, supporting us, pushing us. We do not sacrifice quality at all in order to deliver at that price (US$2,99). We have been able to show the quality and artistry that we have as Latinos. The market definitely likes what we are doing”.

Richard: Is there an expansion plan or are you quietly here for now in the US Spanish-speaking market?

‟For now, we are calm. As always, one seeks to make things bigger, to expand as efficiently as possible, and the moment we reach that point, we will think about it in order to continue opening our footprint. For now, we are happy, we are calm."

Richard: And if I were to ask you about the future of your group's linear channels, such as ViendoMovies versus OTT which is growing a lot, how do you see it?. ‟Previously, I would have told you that I saw the growth of OTT was very aggressive and that it was increasing every day, and that linear and cable channels were in decline among American users, with cord-cutters moving to these new platforms. Now, with the release of so many instruments and so many channels that have been launched in the OTT world, I feel that this linear market is going to grow, it is going to have to readjust and come up with an offer that is not the same TV package that they are used to”.

Richard: In this same program it has been said that linear TV will continue to exist as long as Hollywood continues to deliver its content, but if they don't give them anymore, surely there will be a decline. But you are independent and the product you are showing comes from independent producers and you are also producing… ‟The providers we have are the ones we have had for many years. They have gone through the linear channels, through our OTT platforms and we have had relationships for more than 20 years with very talented people, especially in these areas. We have started producing in the last two years, and we have already made around seven to eight films. We also make series. Now there is one coming, GinaYei, in addition to Súbete a Mi Moto and other properties you have surely seen already, such as Hasta Que Te Conocí, nominated for an Emmy, and we are going to continue producing in that line”.

Richard: Another successful project is Pingüinitos for children… ‟For children, we have FlixLatinoKids in the US and Puerto Rico, and Pingüinitos for Central America and the Caribbean, including Mexico. Our strategy is to create a healthy world of entertainment that parents can have for the smaller ones in the house. We have felt that several of the platforms that have been opened for children offer content that might not be aligned with what parents want to teach. They don't know where it comes from or who is programming. In this case, we would like to eliminate that uncertainty and be able to show exactly what values each series contributes, and what it teaches, to see if it aligns with what parents want to teach their children. Like everything, children have strengths on one hand and weaknesses on the other, and each child should be handled differently, as long as he has everything without any violence, and without the values that parents do not want to teach at home".

Richard: And is the channel´s growth based on advertising, marketing, connections, public relations? What is it like? ‟I would say it's really at the level of marketing, content, technology, and a combination of all of that. The formula for one is not the formula for all. Ours has been very organic, in the sense that we have connected with our audience here in Miami, with our audience in Puerto Rico and we have expanded up and down the East coast. On the West Coast, it is happening gradually. There are other companies that have taken a lot of money upfront, gone to the whole market, and started producing. That's another strategy. I would say there are two ways and you choose the one that makes you feel comfortable. Ours has been good for us and I wouldn't change it. Richard: You mean, a connection with the audience and gradually, without requesting any huge loans, with good financing. Is that it? Did I get it right? "That's right".

Richard: And you as a financier, who studied that with cum laude results, and your father who comes from finance, as a financier, how do you combine finance with entertainment? ‟I think the biggest connection for me has always been mathematics. I came to the U.S. when I was 7 years old from Venezuela, I didn't understand English, and for me the subject that was always the same was mathematics, and that's where I settled in. I understood the numbers and maybe not the language, but I could compete on an equal footing in mathematics. That led me to finance, and there it was all about valuations and the rise of shares in the market… The world of entertainment can also be carried out with numbers, with audience numbers and content viewership. That way you can understand what are the values or the figures that can really give the business the opportunity to grow. That is how I have been managing it. Instead of being company shares, they are products, they are assets such as movies, series. All consumption can be maximized and optimized

Richard: If I can think of a visionary man who has several cards up his sleeve in different businesses, it is your father, Luis Villanueva. Any opinions about your father? ‟My father has been the example that has brought me here today and has largely made me the person I am today. For me, he has been a great guide and a voice of great confidence and understanding. He has helped me to be part of this group and to be able to develop products like FlixLatino”.

Richard: I know that they now have other businesses, something like a side business, on the side, but challenging as well: the restaurants you are involved in. You have a very successful one in Coral Gables, Tur Kitchen. What is your impression of this? Is it part of your diversification? ‟Definitely. We never thought we were going to end up in the restaurant business, and I think we're going to continue until we have 360º entertainment... from restaurants to cinemas, to who knows what? It has been a very nice experience; it has given us the opportunity to showcase the food, the quality, and a different world. Tur Kitchen managed to win the best Mediterranean food restaurant this year, so we continue moving this way and we have felt very satisfied with the accomplishments we have had in this sense, too".

Richard: And it's truly a family business, because your mom, you, and your dad are all there. I imagine it has brought them closer together, you are a busy bunch aren't you? ‟Yes, definitely. There is a lot to do, we are always busy and I have been fortunate to be able to work with my family, with my parents, and to bring projects forward that work that is well received, that gives the city and the market something different where you can have a good time. We want to put a smile on people's faces, either through television or through restaurants”.

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