The language industry consists of segments that move at different speeds and have different sizes. Companies that specialize in a fast-growing and sizeable vertical can enjoy a steady increase in business.
For buyers of language services, it makes sense to select a provider with the appropriate portfolio size in their vertical. Those companies will speak the business language and know the challenges of that sector. Also, they will have resources such as specialized translators, translation memories, domain MT engines, glossaries and training materials.
The chart is based on data obtained via responses to The Nimdzi 100 survey earlier this year and on annual reports of publicly-traded firms such as RWS, SDL, Honyaku center and Keywords Studios. We added estimates in cases where we had reliable third-party information, for example, Nordic interpreting companies that disclose their revenues via online business registries. The resulting sample size is USD 4.6 billion.
Being number one brings a lot of perks. In almost every vertical we looked at, the largest player derived more than USD 100 million from that vertical alone: TransPerfect in Life Sciences and Legal, SDL in IT, Keywords Studios in Games, SDI Media in Media Localization, RWS in Patent, and Canadian Translation Bureau in Public Sector. In almost every vertical there is a huge gap between the number one provider and the rest of the flock.
Top contracts make a colossal difference.
Zooming into regional markets, we find a very different distribution of revenue by sector.
Countries have specialty areas, and it makes sense to coordinate vertical and geographical expansion strategies to achieve the best sales potential.
Technical translation may have a huge volume globally, but it is a fragmented market that spreads across hundreds and thousands of LSPs. In the Top-100 distribution of revenue, Media localization is a bigger vertical than Technical, because sales are concentrated. They come from a few top clients, such as the Hollywood studios and Netflix, and capturing this market has propelled leading companies into hundreds of millions of revenue.
Smaller LSPs likely have more revenue in technical translations and general business. These are segments with a lower concentration of business and a higher fragmentation of vendors. They also have revenues from sectors not reflected in the chart, such as retail. Certified translations for private persons exist as a business in every country. However, companies do not come into millions of USD by working in B2C.
The HubSpot localization team has positioned itself as a high-priority (revenue-generating) strategic function critical to the continued growth of the company, with a broad scope of responsibilities that goes beyond providing translations. A key to their success has been their tight collaboration between localization and other core teams.
In recent years localizing video games has become one of the essential strategies for reaching more players worldwide. The rapid growth of technology networks, the sophistication of today’s mobile phones and their increased affordability have made it easier for millions of people to access the Android and iOS app stores.
With the ever-increasing pressure of an impending product launch date, it is quite frequent for clients and language partners to get caught up in day-to-day activities. The focus is on the deliverables, naturally. The important factors that help make a healthy client-vendor partnership get less attention.