In recent years, the large SVOD players have shifted to international growth as their US domestic market has reached maturity. Driving this growth is local original content and Netflix announced Money Heist is its biggest success outside of the US with 44 million households watching in the first four weeks [CNBC].
The Spanish hit was localised for other regions with both dubbing and subtitling. Localisation for these regional hits can boost the global library size for Netflix, plus with audience data, they can identify the regional hits to localise and present to the wider world. With the rise of global SVOD platforms, the localisation industry has seen a rapid expansion to serve the increased demand from media clients.
We take a closer look at the localisation industry, how it’s grown so far and what the future might have in store.
Industry trade publication, Slator, has tracked the rise of the localisation industry over the past few years. In 2019, there were 60 mergers and acquisitions alone in an industry worth $46.52bn (2018). The US and UK dominate the top 10 organisations and these are the ones making the deals – last month RWS announced an agreement to acquire rival SDL and take the business private, at a 52% premium over its share price. Clearly there is optimism in the industry even during a global recession.
Jobs have continued to increase at LSPs according to Slator, who track the industry employment through its Language Industry Job Index (LIJI). Using July 2018 as a baseline, the industry hit peaks in March 2020 around 126 points (anything above 100 indicates growth), though a low of 95.66 was recorded just a few months later in July. Yet the rebound has begun.
With billions invested into new original content by broadcasters and streamers alike, plenty have gone on to become global hits. Yet, in a globalised world some form of localisation is needed for particular audiences. With the localisation industry, a select few of large players serving the entertainment industry had developed – SDI Media, IYUNO, VSI, plus regional players like Dubbing Brothers and KM Studio.
M&A deals have taken place in this specialist area with a major merger between BTI Studios and IYUNO Media Group. The pair were well suited for a merger. BTI had spent several years acquiring studios across Europe and grew into a European powerhouse for dubbing and subtitling. Meanwhile, IYUNO had its roots in APAC and started international expansion after receiving investment from Softbank. Combined, the business has offices across the global and immediately put the group into the top 10 of all LSPs.
Of the five media localisation specialists on Slator’s 2020 Language Service Provider Index, revenues have increased by 16.9% on average. So called Super Agencies (multi-vertical LSPs) have also begun expanding into media localization with TransPerfect and Keywords Studios.
The localization industry has been reliant on skilled workers to conduct translation services, however many LSPs are investing into artificial intelligence (AI) to gain an advantage. In the transcription area (generating subtitles from video), there are already systems offered by several of the large Tech businesses – including YouTube’s auto-captioning software (Google). Voice recognition software has long been used for captioning and subtitling, however new developments in AI allows for a higher accuracy level, relieving translators to focus on more difficult areas that systems struggle with. It automates the easiest processes to reduce turnaround time and increase the projects the LSP can take on. Concern that machines will takeover all processes from humans are unfathomed as Nimdzi Insights discovered over half of LSPs responding to a survey reported machine translation would never replace human translators.
The media localisation industry is rapidly transforming as the media industry becomes more global. Content is readily available across borders and the surge in high quality, original content has led to a increase in work and revenues for the media localisation businesses. So long as the content boom continues, media localization service providers are set to benefit.