Consolidation and Growth in Media Localization

On October 17, 2022, TransPerfect announced the acquisition of Hiventy, a prominent media localization company based in France and no small fish in the global market for subtitling and dubbing services. In fact, in 2021 and 2022 Hiventy made positions 37 (USD 44.5 million – verified) and 39 (USD 55.2 million, estimated) in the Nimdzi 100 ranking of the largest language service providers (LSP) in the world. The same ranking that places TransPerfect on the very top as not only the largest LSP in the world but also the only one that has managed to break the billion-dollar barrier. The process of the deal was overseen by the commercial courts in Paris, who had ordered the sale of the company after Hiventy had fallen into overindebtedness. 

While exciting, news of the acquisition is certainly not surprising. Media localization can be a very profitable line of business and is a segment of the market that has been growing at a rapid pace, with no end in sight. Over the last few years, TransPerfect has been expanding its media localization portfolio via strategic acquisitions — no less than seven since October 2019 (including Hiventy).  

TransPerfect’s acquisition spree in the media localization space since October 2019

Media localization companies in the Nimdzi 100, March 2022

Of the top players in the market, Hiventy does appear as the most logical target. Looking at just the pure-play companies in the market, Iyuno-SDI Group, Deluxe Media Entertainment (revenues undisclosed), Pixelogic Media, Dubbing Brothers, VSI, SWISS TXT, ZOO Digital Group are the only ones larger than Hiventy. In addition, Hiventy also comes with its own physical dubbing studios — bringing TransPerfect’s total count to more than 90 recording rooms, as reported by MultiLingual — and is located in France, a traditional dubbing market.

What can we expect from the acquisition?

The acquisition is big news and so far also the biggest acquisition TransPerfect has made in this space. Looking at previous deals, the largest company TransPerfect bought in this sector was probably France-based Lylo, whose revenues stood at USD 16.5 million in 2018. Hiventy is about three times this size and belongs to the top 40 largest LSPs in the world. 

Now, what does this mean? 

For TransPerfect, it means that the company is seriously solidifying its position in the media localization industry at large as well as its footprint in the European dubbing market. TransPerfect already has a designated division for this line of business, called MediaNEXT, and can list big players such as Netflix and Amazon Prime in its client portfolio, so in many ways this is just another step in the same direction.

For the media localization industry, it is doubtful that the acquisition will change much. There is so much content that needs to be localized that many (large and small) companies can survive and thrive in the same space. 

Growth in the media localization industry

As mentioned above, the media localization segment is one that has absolutely exploded over the last few years, mostly due to changing consumer behaviors and the increasing popularity of over-the-top (OTT) platforms like Netflix, Amazon Prime, Disney+, and Apple TV+ to name but a few. By Nimdzi’s estimate, this segment of the market is not slowing down anytime soon. Announcements, such as Netflix launching new pricing models and adding advertisements to the streaming experience, mean that more money is being poured into the media industry. The knock-on effect will be even more content and more content always means more demand for localization. 

The growth in this field is also evident if we once again take a look at the Nimdzi 100. The number of companies in the top 100 positions of our ranking that list media localization services as part of their core business increased from six in 2018 to 14 in 2022 (excluding TransPerfect). This is despite the fact that many of the earlier players on the list were targets of mergers and acquisitions (M&A), meaning that new, large players are coming onto the scene all the time and that media companies at large appear to be growing.

That this segment is growing can also be seen in the combined revenues of the media localization providers in the top 100 positions, which grew by 283.5%, from USD 420.2 billion in 2018 to USD 1.6 billion in 2022. 

But the rise of media localization services is not only evident at the very top. Nimdzi’s data show that in 2022, 71.3% of LSPs of all sizes who took the Nimdzi 100 survey provide subtitling as part of their service portfolio and 60.5% provide dubbing, voiceovers, and audio services. This shows that media localization is no longer a niche service for a select few but has become mainstream.

Growing pains and what the future holds

The growth in this space is truly impressive. But, can there be such a thing as too much growth? Probably not, however, there certainly are pains that come with such a growth spurt.

For years now, companies have been complaining about a talent shortage. This is true for the language services industry at large but has been voiced particularly loudly by companies in the media localization space. At Nimdzi, we have rather called it an alleged talent shortage, as our research shows that it is much more about a misalignment between what the market needs and what linguists can and want to offer rather than an actual shortage. Whichever way one wants to put it, one thing is for certain: there is more demand than supply and turnaround times are getting shorter and shorter. 

So what does this mean for the future of the media localization industry?

As controversial as it may be, we project that in the near future we will see a lot more machine translation (MT) workflows entering audiovisual translations (AVT). In part because this is already happening, but also because MT is increasingly entering all parts of the language services industry, including MT-powered live captioning and machine interpreting (speech-to-speech translation), begging the question of why AVT should be the exception. Of course, AVT is a more creative process and also comes with distinct sets of rules. However, MT has made enormous strides and in a recent study by Nimdzi Insights and Weglot that evaluated the quality of different MT engines for different language combinations, 85% of samples reviewed scored either “very good” (no touch) or “acceptable” (light edits) and not a single sample scored “very bad” (not usable). Players such as TransPerfect coming into the AVT space, who are experienced in the MT field and have the money to invest, will only contribute to this trend. Does this mean that translators will be replaced? As in any other segment of the language services market, the answer to that question is no, however, it does mean that also in the AVT business, translators should expect their jobs to change and be ready to embrace this change as the media localization industry continues to expand more rapidly than ever before. 

Renato Beninatto
Renato Beninatto co-founded Nimdzi to provide insights to investors, analysts, buyers, and suppliers of language services and has written three books on global business.

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