The Spanish-language directory that began landing on doorsteps in Northern Virginia recently had a familiar name: The Vega Hispanic Yellow Pages has been around for 20 years. But with new owners, new marketing and wider distribution, it tells a new story -- of the growing economic clout of the region's Hispanic population.
The directory was sold last year for $4 million to Hispanic Yellow Pages Network LLC, a growing Tampa chain with designs on acquiring directories targeted at Latinos throughout the country. The deal is the first sign of consolidation in the region's fiercely competitive market for Spanish-language directories. Five companies have published more than a dozen Spanish-language business and community books in the past two years.
About 160,000 copies of Vega Hispanic Yellow Pages, which has been around for 20 years, are being published for the District, Maryland and Northern Virginia.
(Larry Morris -- The Washington Post)
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They rival English-language phone books in size and are filled with hundreds of ads bought by Latino professionals and others seeking to draw business from the region's growing Spanish-speaking community.
Non-Hispanic companies and professionals have become "more receptive because there are so many Hispanics," said Francisco Vega Jr., founder of the two-decade-old Vega Hispanic Yellow Pages. He plans to step down at the end of the year, turning his directory over to HYP, which owns 15 books in eight markets, including Atlanta, Dallas and Chicago.
The company's entrance into the District and its suburbs follows a trend of large companies buying local Hispanic media, traditionally a local business dominated by Latino immigrants. Infinity Broadcasting Corp. entered the local radio scene this year, converting well-known rock station WHFS (99.1 FM) to Spanish pop and jostling the existing community of small Spanish-language stations. Last year, The Washington Post Co. bought El Tiempo Latino, a local Spanish-language weekly that competes with more than a half-dozen other Spanish-language papers.
Consolidation in Spanish-language media is a natural corollary to what is happening in the mainstream media, said Patrice Listfield, chief executive of HYP Network. As an example, she cited mergers in the English-language directory market. It is now a cash-rich, $15 billion advertising business. About half of the industry's market share is controlled by SBC Communications Inc. and Verizon Communications Inc., according to the Kelsey Group, a company that gathers research on print and electronic directories.
Spanish-language directories make up only a small percentage of the directory business. Nationally, they bring in combined revenues in the tens of millions of dollars, leaving room for some growth, said Kelsey analyst Charles Laughlin. HYP and El Enlace Latino, a growing national Spanish-language directory owned by Cobalt Publishing in Louisville, have been early leaders of the consolidation.
The independent Spanish-language directories "have all been limited by their own resources," Listfield said. "We want to capitalize on the best of what everybody is doing and take it all to another level."
Listfield, who once ran a regional phone book in New England, started HYP 1 1/2 years ago with business partner Luis Bermudez and the financial backing of Abry Partners LLC, a media-focused private equity firm in Boston.
The company's plan, she said, is to continue gobbling up small Spanish directories and bringing them into HYP's system to capitalize on the economies of scale that benefit larger companies.
HYP recently released the 2005 Northern Virginia edition of Vega Hispanic Yellow Pages after launching a redesign of the book last year. A combined Washington and Maryland book is to be published later this year.
The company has already more than doubled the Vega book's annual revenue, to $3 million, since HYP bought it in September and is now publishing 160,000 books in the District, Maryland and Northern Virginia, Vega said. The company is also using a marketing firm to identify Hispanic households and delivering 36,000 of the books door to door rather than leaving them at Latino grocery stores and passing them out at soccer games and festivals.
HYP and its local competitors are mining a fast-growing market. The Washington area has the nation's 14th-largest Hispanic population. It grew about 20 percent from 2000 to 2003 to more than 530,000, according to Census Bureau estimates.
HYP has created a slick brochure to help pitch Vega's book, citing statistics and national research showing that 55 percent of Hispanics prefer Spanish ads and that 52 percent use Spanish as their primary language. In big, bold letters, the brochure highlights the figure $700 billion -- the U.S. Hispanic community's estimated spending power.
HYP has taken over Vega's backroom operations, including accounts and billing. The company also designs the ads and pages and oversees the printing. Vega, a Peruvian immigrant, ran the company with his mother and brother and two other long-time employees from a small office in Fairfax. Soon he will begin an advertising consulting company.
The changes at his company are expected to shake up his competitors. Roger Velez, a Pentecostal church pastor and real estate agent in Vienna, started what is thought to be the District's first Spanish-language directory, called Spanish Yellow Pages, in the early 1980s. His book inspired Vega, who worked as a musician before launching his book in 1985. Those two books attracted other entrants to the Washington area, including Directorio Hispano, El Ejecutivo and Las Americas.
Now, Velez is in talks to sell his directory to a local small-businessman.
"There is too much competition," he said. "Eventually, bigger yellow pages began. People saw that there was some easy money to be made. When you have something that is going well, others want it too."
