Takeaway: The global economic downturn and multimedia localization

Some products and services continue to thrive during a downturn, and multimedia localization is one of them. Out of the many offerings within the language services market, multimedia localization was one of the fastest growing, according to a survey of more than 1,000 companies conducted by Common Sense Advisory in May of this year. Our study found that the market for multimedia localization will reach nearly $1 billion in 2011. More than a quarter of the 26,000-plus language service providers (LSPs) characterize themselves as suppliers of these services.

Yet multimedia localization makes up only a small percentage of total revenue for most LSPs — less than 5% is typical. The study identified very few LSPs that derive more than 50% of their total revenue from multimedia localization services. Of those, most also said that multimedia localization was their fastest-growing service, along with related services such as multilingual subtitling and voice-over work. Most of these multimedia specialists are not single-language vendors (SLVs) selling to other LSPs, but rather companies that provide these services in multiple languages. They reported that the demand for their services was coming from a diverse array of sectors, including financial/insurance, software/IT, motion pictures/film, life sciences, retail and manufacturing.

But what’s the biggest market sector for multimedia localization specialists? The elearning industry. The education and training industry is enormous, and elearning makes up a small but growing slice, gradually taking away market share from its predecessor, computer-based training, as the preferred form of content delivery. The global economic downturn forced many companies to act cautiously with their budget, but these businesses realized they couldn’t just neglect employee training. In many industries, training isn’t optional; it’s a requirement of doing business. But many companies are still waking up to the fact that they can save money by moving more traditional programs to elearning environments.

The largest markets for elearning are Europe and the United States, but the growth of many economies around the world and the linguistic diversity even within these two large markets have prompted many companies to seek out opportunities elsewhere, especially within Asia. Don’t think that just because economies are recovering that demand for elearning localization will slow down. It won’t anytime soon. We’re seeing many LSPs in Asia report high growth rates, thanks to expertise in this area, and we expect to see more as Asian economies continue to rise.

Of course, elearning isn’t the only area in which the demand for multimedia localization services is growing. As more tools become available for people to produce, edit, share and subtitle their own animations and videos online, it’s becoming easier — and more tempting — to make that content available in other languages. For example, in another recent study, we reviewed 40,000 datapoints from 1,000 global websites and found that not only were companies adding more languages to their sites in general, but they were adding video content as well.

What does the increased availability of (inexpensive) web-based multimedia technologies mean for providers of multilingual services? There are many implications, but perhaps one of the most critical ones is that users are getting accustomed to working on their multimedia projects instantly, online and either for free or as part of a “freemium” model where you get at least the basics for nothing. This means that they won’t likely seek translation or multilingual services separately; they’ll want to obtain those services directly within the portals and tools they’re already using. Vendors should think about ways in which to integrate their services or develop partnerships with some of the leading web-based providers. They’ll also need to think of ways to offer and price multimedia localization services on a more transactional basis so that they could more easily be tied into such systems. Too many vendors focus narrowly on winning just a few big contracts. There’s a lot more money to be had with deals that are smaller in size but greater in number — that is, for the LSP that’s willing to innovate and move ever so slightly away from the box.