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The 2023 Nimdzi 100: The Ranking of the Top 100 Largest Language Service Providers

Report by Sarah Hickey.

Table of contents

  1. The 2023 Nimdzi 100
  2. Close, but no cigar
  3. Watchlist
  4. Changelog
  5. How we create the Nimdzi 100
  6. State of the language industry
  7. TL;DR
  8. The market
    1. Market size and five-year growth projection
    2. Top 100 companies concentrate 19.6% of industry revenue
    3. Growth of the top 100 ranking positions
    4. A closer look at this year’s top 100
    5. Top services and verticals in the market
  9. Money
    1. The effect of currency fluctuations on industry growth
    2. Mergers, acquisitions, and investment in 2022: resilience amidst uncertainty
  10. Atlas
    1. Growth by geographical distribution
    2. Where the largest LSPs are
    3. Where the clients are
  11. The buyers
    1. How buyers view the LSP landscape
    2. What buyers want
  12. Trends, driving forces, and predictions
    1. The new language service provider
    2. LangOps: The Vision and the Reality
    3. Tech layoffs and the talent crunch — another Great Reshuffle?
    4. Multilingual meetings — more than just interpreting
    5. Machine Translation Quality Estimation (MTQE)
    6. The latest trends in AI for the language industry
    7. ChatGPT
    8. The impact of global events

Not a Nimdzi Partner but want to download the full PDF of the report and peruse at your leisure?

RANKING OF THE TOP 100 LSPs

 
Chances are the information you came here for is the Nimdzi 100 Ranking, which is presented in the table below. The ranking is based on revenue and lists the top 100 largest language service providers worldwide.

Let’s just jump right in, shall we?

Our ranking is a live document and therefore subject to change.

Notes:

  • (FY) fiscal year, figures for the latest financial year (verified with financial reports)
  • (v) verified, data provided by companies
  • (e) estimated revenue, based on extensive industry research
  • Some companies appear to have the same revenue due to currency rounding. However, the ranking order is accurate considering the second decimal.

Close, but no cigar

The following companies would have made the ranking in previous editions, but due to the growth of other players as well as new arrivals on the Nimdzi 100, they did not make the cut this year. However, they deserve an honorary mention.

Watchlist

Language service providers without a definitive revenue estimate 

The Watchlist consists of companies that should be in the ranking but are not listed because they do not disclose, publish, or otherwise reveal their revenue. Furthermore, some organizations are units inside larger corporate groups where a small part of revenue comes from language services, and annual reports do not allow researchers to segment out the translation and interpreting revenue. We provide visibility to such companies on the Watchlist to highlight their impact on the industry. 

The reason it is important for us to track these companies is because even though they might not compete for clients, they compete for talent and resources. They also represent opportunities for technology providers and investors.

The companies are listed in alphabetical order.

Changelog

A lot has changed on the ranking since last year. Here is a brief overview to help you better navigate the ranking.

New arrivals on the Nimdzi 100

  • Sorenson Communications — USD 825.0 million (e). US company Sorenson Communications is the largest provider of American Sign Language (ASL) interpreting services in the world and the market share leader for video relay services (VRS — a special, publicly funded video phone service for Deaf people) in the United States. Nimdzi has known for a long time that Sorenson is among the largest LSPs in the world. But so far, we only listed the company on our Watchlist of providers that do not disclose their revenue. However, public records now show that Sorenson reached USD 891.0 million in 2020 and USD 837.0 million in 2021. For 2022 we are using an estimated figure.
  • GienTech — USD 208.3 million (v). GienTech is a Chinese company and not technically new on our ranking but rather returning after having been moved to the Watchlist in 2022. The company used to be known as Pactera Technology and rebranded to GienTech in 2022. GienTech offers a range of services, but in the language services market the company primarily focuses on clients in the tech sector.
  • Questel — USD 129.0 million (e). Questel is a US-based business that predominantly operates in the legal, patent, and technology sectors. Questel acquired both Multiling and Morningside (two former LSPs on our list) whose revenues we are considering in our estimate. 
  • Visual Data Media Services — USD 110.0 million (v). Visual Data provides media localization and other media services. The company is based in the United States and disclosed revenues to us for the first time.
  • Yamagata — USD 38.4 million (v). Japanese provider Yamagata specializes in document translation. The company further expanded its offerings to technical writing, translation, and visualization. 
  • Jonckers — USD 33.6 million (v). Jonckers is based in Belgium and can best be described as an AI translation platform thanks to its WordsOnline solution that anyone can either use ad hoc or via a subscription model. 
  • TIS National (Translating and Interpreting Service) — USD 33.3 million (FY). TIS National is an Australian interpreting service provided. The company delivers free interpreting services on behalf of the Australian Government (Australia’s Department of Home Affairs) for people who do not speak English and for agencies and businesses that need to communicate with their non-English speaking clients.
  • Toppan Digital Language — USD 31.4 million (v). Toppan Digital Language is based in the UK and only 1.5 years old (at the time of publication in March 2023). The company has made two acquisitions since — GlobaLexicon and TranslateMedia — and is the fastest growing provider on our ranking this year.
  • DigitalTolk — USD 29.9 million (v). DigitalTolk is based in Sweden and provides interpreting services in the public sector. The company predominantly focuses on remote interpreting and describes itself as a tech company rather than an LSP due to its proprietary platform that functions as a marketplace for interpreting services. 
  • Systran — USD 21.0 million (e). France-based provider Systran specializes in machine translation solutions and is particularly active in the IT, defense, ecommerce, and public sector. In January 2023 the company announced that it had grown more than 20% in 2022 and, for the first time, broken the EUR 20 million barrier.
  • Hanna Interpreting Services USD 17.0 million (v). US-based LSP Hanna Interpreting Services focuses on interpreting services in the areas of healthcare, education, government, and social services. The company also provides document translations.
  • Linguava — USD 16.0 million (v). Linguava is located in the United States and provides both interpreting and translation services. The company is particulary active in the healthcare sector. 

Rebranded

  • In 2021, Iyuno Media Group rebranded to Iyuno-SDI Group to reflect the acquisition of SDI Media. In 2022 the company rebranded again to just Iyuno. Iyuno is the largest provider of media localization services in the world and holds position seven on our ranking.
  • In 2019, PacteraEDGE spun off from Pactera Technology and has since been its own company. In 2022 both companies rebranded. PacteraEDGE is now known as Centific and Pactera Technology as GienTech, making a clearer distinction between the two businesses. Both companies are listed on our ranking this year (positions 14 and 16).
  • TOIN Corporation held position 93 in our 2022 ranking. This year the company is listed as TAKARA & COMPANY (the group it belongs to) on position 36. Aside from TOIN Corporation, the figure for TAKARA & COMPANY also includes the revenue of Simul International, another LSP they acquired in 2020.

Acquired and removed from the ranking

  • French provider Ubiqus was on position 27 of our ranking last year. The company has since been acquired by Acolad Group, the largest LSP in France. Together, the group solidified Acolad’s position among the top 10 largest LSPs in the world in this year’s ranking.
  • Hiventy is a well-known French media localization provider and held position 39 on our ranking last year. In 2022 the company was acquired by TransPerfect. TransPerfect has been making acquisitions in the media localization space for a few years now and appears to be continuing down this path with this latest acquisition.
  • Although already acquired by Questel in 2021, we continued to list Morningside separately in last year’s ranking (position 28). This year, the name has disappeared from our list as Morningside’s figures are considered under the Questel brand, together with Multiling. 
  • Capita Translation and Interpreting is a household name in the industry and held position 79 on our ranking last year. The UK-based provider is most active in the public sector and was acquired by LanguageLine Solutions in 2022. LanguageLine Solutions is the number three on our list and also the largest provider of interpreting services in the world.

Moved to our “Close, but no cigar” honorary ranking

The below companies are missing from the top 100 ranking this year although their revenues were larger than USD 10 million in 2022. This is for one simple reason: The competition was even larger and so all top 100 positions were already filled. This is why this year we will find them in our “Close, but no cigar” honorary ranking.

  • 24translate Group
  • German Translation Network - Ge|Tra|Net|
  • EVS Translations (note that they were also acquired by Unbabel)
  • Human Science
  • Presence Translate & Interact
  • Interpreters Unlimited Group

Moved to the Watchlist

The below providers were moved from the ranking onto the Watchlist because they did not respond to our requests for information and the data available in public records was insufficient to make an informed estimate.

  • Prime Focus Technologies
  • Valbin Corporation

How we create the Nimdzi 100 ranking

During the course of this market analysis, Nimdzi uncovered prominent LSPs that have previously been invisible in market reports because they do not participate in surveys and are reluctant to disclose their revenue. Nimdzi has employed an investigative approach and invested hundreds of hours into intense research, data collection, and analysis in order to present data that have previously been unavailable.

We are very proud to offer broad access to our data. This ranking is offered to all who are interested. No paywall. No strings attached. Localization buyers, investors, savvy job seekers, and analysts are welcome to use this document, just don’t forget to reference Nimdzi Insights, LLC, as the source. Interested parties are free to reach out to us directly should they have any questions.

Below is a summary of the methodology used for the Nimdzi 100 ranking.

  1. We concentrated on identifying LSPs with USD 10 million or more in revenue, with the assistance of in-country experts. In most countries, there are only a few providers of this size, and it is impossible for them to hide from local competitors because they hire staff, take part in requests for proposals and employ a large number of translators. Once we identified the relevant LSPs, we researched information that could help us make more accurate estimates of their size and talked to the management directly to verify our findings.
  2. We’re listing full company revenue, not just language services revenue. It is impossible to separate these in external sources of information, such as annual reports, press releases, and stock listings, which provide the foundation for our work.
  3. We use data from the latest fiscal year for each company. This means the numbers for some companies will not reflect 2022 calendar year revenues. 
  4. Our definition of language services includes: translation, localization, transcreation, multilingual desktop publishing (DTP), language quality assurance, linguistic testing, multilingual copywriting, multilingual technical writing, language project management, interpreting, video remote interpreting, telephone interpreting, linguist verification and staffing, media localization, versioning, adaptation, subtitling, voiceover, dubbing, machine translation (MT), training machine translation engines, cultural consulting, data services, and related services.
  5. Growth rates are calculated in USD. 
  6. We use average annual currency conversion rates to US dollars, published by the Internal Revenue Service of the United States for each day of trading in 2022.

STATE OF THE LANGUAGE INDUSTRY IN 2023

A growth market

The language services market is probably the biggest industry most people have never heard of. Yet, in many ways, it is a shadow industry that is driving the growth of all global brands.

It is an industry that touches all other industries, because wherever there is a need for communication, there is a need for language services. That fact alone makes the language services industry incredibly resilient and, as we like to say, impervious to crises — it is not reliant on what happens in one single sector. It is a transformation business that does not create anything from scratch but transforms content from other industries. 

Another factor that makes this industry so resilient is that unlike others, that purely grow by volume, there are three vectors for growth for LSPs:

  1. Volume: The language industry also grows by volume.
  2. Number of languages: Global brands add more and more languages to their portfolio as they realize the central role localization plays in reaching end-users in their target markets.
  3. A proliferation of platforms: There are many different formats, and content has to be translated and adapted to every single one of them.

The language services industry truly is a growth market.

But don’t just take our word for it. Let’s take a look at the data. The below graph shows that since companies started tracking the size of the market, it has not stopped growing. There were years when growth slowed down (e.g. 2020), but even then, there was still growth.

Source: 2009-2017 CSA Research; 2018-2027 Nimdzi Insights

2022 was a particularly interesting year to analyze because the language industry was emerging from two exceptional years. In 2020, growth slowed down as the market adjusted to lockdowns and a changing environment brought on by the COVID-19 pandemic. 2021 followed as a boom year that saw growth in the industry skyrocket due to backlog demand from 2020 paired with new demand as LSPs were reaping the rewards of the efforts they put in at the start of the pandemic.

2022 was somewhat of a mixed bag as growth was certainly stronger than in 2020 but more moderate compared to the exceptional growth in 2021. Putting the year into context, we can say that in many ways, life has returned to normal. We have adapted to life after and with the pandemic, everyone is traveling again, conferences are being held onsite once more, all the while remote services are here to stay. On the other side of the coin, the global economy is experiencing inflation and an energy crisis, there is war in Europe, and mass layoffs are rocking the tech industry, all leading to an overall feeling of uncertainty. 

Quite fittingly, during interviews for this year’s Nimdzi 100, many businesses reported a slow first half of 2022, followed by a strong second half of the year that outperformed expectations for the very same businesses.

Looking at the results from the top 100, this is what the ranking shows us about the state of the industry in 2023:

  • Data show that annual growth among the 100 largest industry players has increased as compared to last year, though more moderately than in the previous period where growth was exceptionally high. Between 2021 and 2022, the combined revenues of the top 100 positions in our ranking increased by 17.1%, compared to 22.7% growth for the top 100 in the previous period.
  • The combined revenue of the companies comprising the top 10 positions in 2022 rose 13.7% compared to those from the previous year. The segment with the strongest growth are the companies in the top 50 positions, whose combined revenues increased by 17.6% as compared to those holding the top 50 positions last year.
  • Despite ongoing consolidation at the top, the industry as a whole continues to grow, producing larger LSPs every year. This trend holds true even in the lowest positions of our ranking, with the 100th largest LSP confirming revenues of $14.0 million this year as compared with $12.6 million, $12.0 million, $11.6 million, and $10.3 million for the 100th ranked LSPs in 2021, 2020, 2019 and 2018, respectively.

In 2022, a number of world currencies experienced significant devaluations against a strong US dollar. This had an impact on the growth of the top 100 (and the industry as a whole). To illustrate, in this year’s ranking, companies in the top 100 grew 18.7% on average when calculated in US dollars, whereas growth would be at an average of 26.5% if calculated in the reporting currencies for companies on our list.

TL;DR

No time to read the full report but still want to stay up to date? We’ve got you covered. Below is an executive summary of the main findings from this year’s analysis.

Market size and growth

  • We estimate that the language services industry reached $64.7 billion in 2022 and should grow to $69.3 billion in 2023.
  • Using a CAGR of 7.0% in the coming years, the industry will reach $90.8 billion by 2027.
  • The combined revenues of the top 100 positions in this year’s ranking increased by 17.1% compared to the top 100 in last year’s ranking.
  • The top 100 in this year’s ranking recorded an average growth of 18.7% in 2022.

Mergers and acquisitions

  • After a record year of deals in 2021, 2022 was slightly more restrained as macro-economic factors, geopolitical challenges, and rising uncertainty put the brakes on and saw deal volume slightly contract. 
  • Nonetheless, M&A interest in the industry remains high. In this year's survey, 42.7% of respondents stated that they are looking for companies to acquire and 26.0% are looking to sell.

Geographical distribution

  • Out of 169 medium-to-large-sized companies identified in 2022, 39.4% are headquartered in Europe and 37.6% in North America. Companies from Asia represent 17.6% and Oceania hosts 4.7% of the top players. It’s the first time that South America has produced an LSP that is large enough to be included in our report.
  • According to the survey results, in 2022, 41.0% of revenues in 2022 came from clients based in North America, Europe accounted for 48.2% of the client base, and 9.8% of revenues were derived from customers in Asia. Same as in 2021, South America (0.8%), Africa (0.2%), and Oceania (0.0%), are the smallest regions in terms of client base in 2022. 

Buyers

  • According to two separate Nimdzi studies — one asking buyers and the other providers of language services — this is what buyers care most about when partnering with an LSP:
    • On-time delivery
    • Quality management
    • Communication
    • A true partnership

The new LSP

  • Larger LSPs do not just want to be an external vendor but an extension of their clients’ operations.
  • To achieve this LSPs are expanding their offering, going beyond the realm of language services in order to enhance their value proposition.
  • LSPs are also trying to embed themselves as deeply into the client’s operations as possible, e.g. via customized work environments and in-housing.
  • As a result of all this, industry players insist on expanding the meaning of the term “language service provider” and try new names in an effort to market themselves better.

The impact of global events

  • Two out of five companies in our survey are already feeling the impact of the current economic crisis, and another 30% are preparing for it in their 2023 strategy, despite not feeling the impact yet.
  • For the companies impacted, the most popular strategy has been to invest in technology and process change (68.2%). Another 43.2% have also added new services, and approximately a third have raised prices or reduced staff.
  • Of the companies impacted, 64.2% report that clients have reduced their order volumes, and another 22.2% report that clients have reduced the number of languages they are localizing into. In addition, 44.4% state that clients are choosing cheaper, machine-generated solutions instead of human-led services.
  • Looking ahead, almost 60% of respondents want to increase the use of machine translation to combat inflation and economic pressure in 2023. Close to 40% want to increase prices with clients, and almost 33% want to reduce office space to save costs.

THE MARKET

Market size and five-year growth projection

In 2020, we had reduced our growth estimate to reflect the impact of the pandemic, adjusting the market’s compound annual growth rate (CAGR) to 6.0%, down from 6.2% and 6.8% in previous years. However, after a phenomenal 2021 with record growth, our estimate for 2021 reflected a one-off increase of 10% compared to 2020. Already in last year’s Nimdzi 100, we predicted that it is unrealistic to expect this exceptional level of growth to continue, but that we can expect the industry to grow at a faster pace than before March 2020, thanks to a changed market that LSPs have adapted well to at this point in time. This is why, in March 2022, we projected a CAGR of 7.0% for the coming years. Considering the results from this year’s ranking, we can now confirm this growth projection despite economic uncertainty, particularly thanks to a strong second half of 2022. This is why we continue to predict that the market will grow at a CAGR of 7.0% in the coming years, reaching $90.8 billion by 2027.

We estimate that the language services industry reached $64.7 billion in 2022 and should grow to $69.3 billion in 2023.

Five-year growth projection

When calculating the addressable market for their services, commercial providers should limit the opportunity to 60% of the total figure. Firstly, not everything is outsourced, as a significant portion of the overall volume is performed by in-house teams on the buyer side. For example, the European Union employs about 5,000 staff translators and interpreters. Secondly, the market size calculation includes revenues for both translation companies and their suppliers, i.e. a part of the revenue is counted twice.

Top 100 companies concentrate 19.6% of industry revenue

Although consolidation continues, the language services industry remains fragmented. The top 100 companies in our ranking accounted for just 19.6% of the overall language industry in 2022 — a rise of 1.7 percentage points from 2021. Adding in the Watchlist and our “Close, but no cigar” honorary ranking, all 169 large LSPs tracked by Nimdzi accounted for only 22.7% of the language industry in 2022.

In absolute figures, the companies tracked by Nimdzi earned over $14.7 billion in their latest fiscal years. The top 10 companies were responsible for more than 45.2% of that total.

  • $6.6 billion in the top 10
  • $6.1 billion in the next 90
  • $2.0 billion approximately on the Watchlist (including the “Close, but no cigar” honorary ranking for this purpose) 

Despite ongoing consolidation at the top, the industry is still predominantly made up of companies smaller than $10 million.

Growth of the top 100 ranking positions

Our data show that annual growth among the 100 largest LSPs has increased, though more moderately than in the previous period. Between 2021 and 2022, the combined revenues of the top 100 positions in our ranking increased by 17.1%, compared to 22.7% in the previous period. 

The combined revenue of the companies comprising the top 10 positions in our 2023 ranking rose 13.7% compared to the top 10 listed in 2022. The strongest growth was experienced by the segment of companies comprising the top 50 positions, whose combined revenues increased by 17.6% as compared to those holding the top 50 positions last year. The top 20 positions grew by 15.5% and the remaining positions 51 to 100 grew by 13.1%, as compared to last year’s ranking. 

Growth by ranking segment between 2021 and 2022
Growth by ranking segment, three-year comparison
Revenues of the top 100 ranking positions from 2017 to 2022
Growth of the top 100 positions by revenue bracket

A closer look at this year’s top 100

In this year’s ranking, 65 of the top 100 largest LSPs in the world reported various degrees of growth and 35 companies had negative growth. 

This is a big change from last year, where 86 companies from the top 100 reported positive growth, 10 had negative growth, and revenues remained flat for one company on the ranking. However, as mentioned earlier on in the report, this is largely due to currency fluctuations. In local currencies, 88 companies of this year’s top 100 reported positive growth, only 10 reported negative growth, and revenues remained flat for two companies on our list.

Median growth of the top 100 in 2021 and 2022, by ranking segment

Growth by company size

When calculating the growth by company size we again opted for the median instead of the average to allow for a more accurate picture. 

Looking at the results, companies with 50 to 99 employees came out on top, with a median growth rate of 21.6%. In last year’s ranking, it was the same company size class that grew the most, with the very same median growth rate. Next in line are LSPs with 500 to 999 employees, who recorded a median growth rate of 11.5% in 2022 — down slightly by 1.6 percentage points from 2021.

The least growth was recorded in companies with sizes of 25 to 49 (-5.0%), 250 to 499 (2.6%), 100 to 249 (3.5%), and 1000+ employees (4.6%).

The most productive companies in the industry

Looking at the productivity of the top 100 LSPs, the average revenue per employee in 2022 was about $229,300. In 2021, the average was $213,100, so this is an increase in productivity of about 7.3%. The average productivity for the top 20 was $273,400 in 2022. It is worth noting that three companies from the top 10 in our ranking are among the ten most productive companies this year, as compared to only one company last year. These are translate plus, Keywords Studios, and LanguageLine Solutions. In addition, one other company from the top 20 (AMN Language Services) and one from the top 30 (Propio Language Services) are among the most productive LSPs in 2022.

Considering company size, five out of the 10 most productive companies in 2021 employ between 25 and 99 professionals. Two companies in this ranking have between 100 and 249 full-time employees. The most productive company — translate plus — has between 250 and 499 people on staff. Two of the most productive companies employ 1,000+ people.

It is also worth noting that there is an overrepresentation of interpreting companies in this list. Five out of the 10 most productive companies in 2022 — DigitalTolk, AMN Language Services, Språkservice Sverige, Global Talk, and LanguageLine Solutions — all derive a large portion of their revenue from interpreting services. It is possible that the move to remote interpreting contributed to the increase in productivity for these companies. 

The 10 fastest-growing LSPs in our ranking

Below is a list of the ten fastest-growing LSPs in 2022. We need to highlight that the company that experienced the fastest growth — Toppan Digital Language — is only 1.5 years old at the time of publication in March 2023. In this time, the company acquired two other businesses (GlobaLexicon and TranslateMedia).

Growth of select providers between 2017 and 2022

Aside from including a top-10 ranking by growth, for the first time this year we are also including an overview of the growth of 10 select providers in the industry, since we started publishing the Nimdzi 100.

As the data show, when observed across the years all of these LSPs (who at one point or another were the top 10 in the world) had a growth streak. Even the ones who saw revenues decline in one year, increased revenues again in the following years and on the whole grew significantly over the six-year period. The most significant decline in revenue can be noticed for Lionbridge in 2021. However, this is only because the company sold its AI division (for approx. $935 million). For RWS, the slight decline in revenue in 2022 comes down to currency fluctuations. In its annual report, Appen is citing a “challenging market and macro conditions” as the reasons for the decline in revenue from their Global division in 2022.

Women-run and women-owned LSPs

This year, 19 companies in our ranking are women-run or women-owned. The number increased from 17 in 2022. Overall, this places our industry well above the global average of 10% (according to the Fortune 500 in January 2023). The majority of these women-run or owned companies are based in North America, followed closely by Europe (nine and eight, respectively), and two companies are based in Asia.

As much as we want to laud the progress in our industry and congratulate these women on their achievements, it is also important to highlight the distance we still have to go. Although 19% of companies are women-led, only 7.2% of the total revenue of Nimdzi’s top 100 is generated by these LSPs. Furthermore, there are again no female CEOs among the top 10 largest companies in the industry. The distribution is far from equal and we hope to see this gap narrow in 2023.

Top services and verticals in the market

In this year’s survey, we asked companies to select the services and verticals they operate in.

The results show that the services most commonly provided by LSPs are translation and localization (89.3%), machine translation and post-editing (74.2%), subtitling (66.0%), and  desktop publishing and graphic design (58.5%). Dubbing, voiceovers and audio services are in fifth place (57.9%) and copywriting, transcreation, and content creation as well as transcription are in equal sixth place (54.1% each). Remote interpreting (48.4%) and onsite interpreting (47.2%) and are the seventh and eighth most provided service respectively.

Considering the split by verticals, our survey results show that technology, IT & software (59.8%), life sciences (57.2%), and financial and legal (56.0%) are the three most prevalent segments in terms of industry participation. This is a change from last year, where marketing was in third place with 60.4% of survey respondents being active in this segment. This year marketing is in sixth place with 47.2% listing this industry in their portfolio.

Education & e-learning (50.9%) remains in fourth place and healthcare (47.8%) is the fifth most common industry segment. In addition, manufacturing (45.9%) and media & entertainment (43.4%) reached the seventh and eighth place respectively.

When looking at these data, it is important to bear in mind that these results represent a numerical count, showing how many players offer a certain service or operate in a certain vertical. They do not reflect the market share by revenue.

MONEY

The effect of currency fluctuations on industry growth

When we create the Nimdzi 100 and estimate the size and growth of the market, much like other industries, we use the US dollar as a common denominator. However, it is worth stressing that, depending on the currency, growth figures for individual companies may vary significantly when calculated in their local currency as compared to results converted to USD. This is always the case, but particularly worth highlighting this year as many world currencies weakened against a strong US dollar in 2022. 

In the ranking we see this reflected when we consider the overall growth of the top 100 in USD as compared to growth in local currencies. In USD, companies in the top 100 grew 19.1% on average, whereas growth reached an average of 27.0% if calculated in the reporting currencies for companies on our list. A difference of close to eight percentage points. 

This difference is particularly noticeable for companies reporting in JPY, GBP, PLN, SEK, EUR, NZD, and AUD. Amongst these, the Japanese yen and the British pound are the two most heavily affected. In 2022, the Japanese yen reached its lowest level against the US dollar in almost a quarter of a century, and the British pound has fallen to an all-time low against the USD as a response to the government’s announcement of tax cuts. 

On a positive note, companies reporting in USD saw a positive impact on their growth figures in 2022.

Despite these significant currency fluctuations in 2022 that had a more significant impact on the results of the language services industry than usual, it is worth stressing that the net result for the overall market was still strong growth for the sector as a whole.

Mergers, acquisitions, and investment in 2022: resilience amidst uncertainty

The year 2021 was a boom year for the industry, with M&A activity increasing over 60% compared to 2020. As the global economy roared back in 2021 following the COVID-19 shutdowns, M&A activity went into hyperdrive with a record of 62 completed transactions — not considering venture capital (VC) funding, initial public offering (IPO) or merger activity — that saw deal volume and valuations at an all time high. 

Although the industry has been consolidating for some time, it is highly fragmented by nature. This is partly due to low barriers to entry, low capital expenditure requirements, and the nature of the language services business, which is composed of highly dynamic firms operating in a market that is experiencing competing forces of consolidation and fragmentation (which Nimdzi has defined as the Jell-O effect). Thus, the industry is refreshing itself and amenable to the buy-and-build strategy.  

After a record year of deals, 2022 was slightly more restrained as macro-economic factors, geopolitical challenges, and rising uncertainty put the brakes on and saw deal volume slightly contract. 

Profitability and growth continues to drive M&A, and as the industry is very amenable towards Private Equity’s (PE) playbook: the buy-and-build strategy is one of the fastest ways to grow revenue and acquire capable teams to further drive growth. In addition, advances in artificial intelligence and machine translation enable translation companies to provide services at a scale not yet seen before. 

In its early days, 2023 was off to the races, with a number of deals closing in early January. Unbabel acquired EVS, one of largest players in the German market. Mobeus Private Equity completed their first transaction in the language industry as they facilitated the management buyout (MBO) of Translation People. And notably, another unicorn is born in the translation industry as DeepL received a $100 million investment, making it also the first MT firm to be valued at $1 billion, a multiple of 20 times DeepL’s run rate. VC firms have long considered MT companies to be powerful disrupters and have specifically supported them.

As earnings show resilience and grow to all-time highs, the industry is beginning to attract a greater number of private capital investors. In 2022, RWS was approached by Baring Private Equity Asia Fund VIII Limited (BPEA) with the possibility of acquiring the company. This attracted a lot of attention at the time and put the language industry on the map of the larger funding houses.

The outlook for M&A development in 2023 is largely contingent upon interest rates and business confidence. Though there is still inherent risk, investors with confidence and experience can seize opportunities by adapting their strategies to the current conditions. 

Looking at this year’s survey results, the numbers confirm the narrative. In this year's survey for the Nimdzi 100, 52.4% of respondents stated that they are looking for companies to acquire, which is up by 4.8 percentage points compared to last year’s results. In addition, 34.3% are looking to sell, which is an increase of 8.8 percentage points compared to 2021 — confirming once again that there are fewer companies that want to sell against those that are looking to buy. In the same vein, the number of companies stating they are not thinking about M&A at all has decreased by 2.6 percentage points compared to the previous period.

ATLAS

Growth by geographical distribution

To get a better sense of where the biggest growth came from by geographical distribution in 2022, we have compiled a map of the average growth rates of the top 100 LSPs by region, based on country headquarters.

We calculate growth based on revenues expressed in USD, using the average annual exchange rate to US dollar, published by the Internal Revenue Service of the United States for each day of trading in 2022. As already mentioned in the previous section on the effect of currency exchange rates, this means that, for some regions, currency fluctuations skew the growth picture. If we calculate the average growth of the top 100 LSPs by region in the companies’ local currencies the percentages increase across the board: 39.7% for Asia (vs 27.0% in USD), 24.3% for Europe (vs 13.1% in USD), 26.6% for Oceania (vs 17.5% in USD), and 22.6% for North America (vs 22.2% in USD; includes companies reporting in CAD).

Where the largest LSPs are

Out of 169 medium-to-large-sized companies that we identified in 2022, 39.4% are headquartered in Europe and 37.6% in North America. Companies from Asia represent 17.6% of the geographical distribution. Oceania hosts 4.7% of the top players. This year it is the first time that South America has produced an LSP that is large enough to be included in our report (on the “Close, but no cigar” list), namely Translation Back Office from Argentina. There is only one company from the Middle East that has made it into our ranking, and for the third year in a row: BLEND (formerly One Hour Translation). Africa has not yet produced an LSP that could be included in the Nimdzi 100. 

Compared to 2021, there is a slight decrease in companies headquartered in Europe (41.8% in 2021) and Asia (18.8% in 2021). This difference is made up for by a larger number of LSPs based in North America, Oceania, and one in South America (35.8%, 3.6%, and zero in 2021 respectively). 

Where the clients are

We asked survey respondents to indicate the percentage of their revenue derived from customers based in different parts of the world. The results show that in 2022, Europe was the region with the largest client base in the industry, followed by North America and Asia. While the market distribution is similar to the one we observed in 2021, the weight shifted slightly, and Europe reclaimed its top position from North America, which had the largest client base in 2021. 

As the map shows, 41.0% of revenues in 2022 came from clients based in North America, down from 45.0% in 2021. This slight decrease in the North American client base seems to have shifted to Europe. In 2022, Europe accounted for 48.2% of the client base, up from 41.1% in 2021. Revenues amounting to 9.8% were derived from customers in Asia in 2022 as compared to 12.0% in 2021. Same as in 2021, South America (0.8%), Africa (0.2%), and Oceania (0.0%) are the smallest regions in terms of client base in 2022.

THE BUYERS

How buyers view the LSP landscape

What the ranking doesn’t show is that many of the top providers in the industry are not in direct competition with one another. Because the market is so fragmented, there are many clusters of top players for the various sectors within the language services industry. 

While companies from the top ranks are trying to diversify and branch out into other segments, no one, for example, comes near Keywords Studios when it comes to gaming, near Iyuno when it comes to media localization, or near LanguageLine Solutions in the area of interpreting.

In every segment of the market, there are a handful of LSPs that have reached the level of brand awareness that puts them in a top-of-mind position for buyers. From a buyer’s point of view, the top companies in each segment of the industry are more likely to be bundled and tend to be interrelated in the client's mind. Let’s take a look at who they are, per sector of the industry.

What buyers want

In a 2022 study, Nimdzi gathered responses from localization decision-makers to understand what the deciding factors are when selecting an LSP to partner with. While on-time delivery and quality management are (unsurprisingly) highly valued by localization buyers, it’s worth noting that communication, flexibility, and transparency are just as important. In fact, 56% of respondents report that they want to work with providers who can be “partners to [their] business,” supporting the qualitative data gathered in interviews that indicates localization managers want external partners that can become an extension of their internal teams.

What buyers value most in relationships with LSPs

For this year’s Nimdzi 100, we also asked the ones on the other side of the equation (the LSPs), what their buyers typically care about the most. Results demonstrate that, despite the shift in data gathering approach (interviews vs survey) and the changed perspective (LSPs vs buyers), the essential priorities remain largely unchanged. Below are the top results from this year’s Nimdzi 100 interviews with market players that show what buyers care about the most when partnering with an LSP (as reported by LSPs):

  • Speed: Projects delivered fast and on time.
  • Quality: Although trends also show that quality requirements may vary significantly, leading LSPs consider tiered models to accommodate different quality and budget requirements.
  • Integrations at a very deep level: While the more common example is LSPs integrating with their clients’ system, we have also come across reports of clients deploying their own engineers to customize the LSP’s system to their exact needs.
  • As little involvement in the localization process as possible: LSPs are increasingly taking on the role of the strategic partner that handles the localization process from start to finish.

One-stop-shop: Clients want everything under one roof without having to worry about who to talk to. Many LSPs we talked to for this year’s Nimdzi 100 reported having changed their internal structure to accommodate exactly that.

The new language service provider

For a couple of years now, we have been monitoring a trend we’ve been calling “the new LSP.” And although this is not a new trend, it certainly is a continuous one that we see expressed in many different ways but with two core characteristics:

  1. Larger providers in our industry are moving away from transactional work and toward a more strategic partnership with their clients.
  2. LSPs are redefining their self image in an attempt to market themselves better. 

Let’s take them one at a time.

A true partner, not just a vendor

At the core of this trend lies the desire of LSPs to not just be an external vendor but rather an extension of their clients’ operations. In their effort to achieve this, LSPs become hyper customer-centric, adding adjacent services, and embedding themselves deeply into their clients’ internal structure to a point that makes them almost irreplaceable (or at least harder to cut ties with). Let’s talk about what that looks like:

Adjacent services for an end-to-end solution

When we talk about adjacent services, we are referring to services that do not traditionally fall under the definition of language services, but are complementary to the LSP’s offerings and allow them to increase their value proposition and provide their clients with a more complete package. LSPs can take care of a client’s whole global content strategy by also offering content creation and copywriting, as well as content management. In media localization, an LSP may not only provide subtitling and dubbing but also digital packaging and cloud recording to round out their offering and provide an end-to-end solution.

In-housing

Another example of LSPs strengthening the relationship is in-housing. Several LSPs report that they have entire teams who permanently work on the clients’ premises. These teams are more embedded in the client’s organizational structure than the LSP’s. In some cases, companies even built entire offices for their clients that look exactly like the client’s ones but are being operated by the LSP. This is mostly relevant for clients who release content on a daily basis and need this content to go out in 30+ languages that very same day, at the same time. Providing in-house teams might not be an entirely new concept. However, it is a great example of LSPs embedding themselves deeply into their clients’ operations.

Managed services and convenience

What most of the above is describing is also commonly known as managed services — the practice of companies fully outsourcing parts of their business to another provider. Reasons for this are usually of budgetary nature, but managed services also offer a level of convenience and reassurance when the services are essential to the company’s business but fall outside their core competency (as is usually the case with localization). This is where, in the language services industry, LSPs have started to step in and step it up. 

The realization that convenience is key is also reflected in the fact that many LSPs spent much of 2022 restructuring their internal operations so that now there is only one central point of contact for the client — no matter the request, no matter the timezone. While this might make it more complex behind the scenes, it streamlines the process from the client’s perspective.

Going the extra mile

An example of LSPs being hyper accommodating to client requests (we are in a service industry after all) comes from Straker. The company built an app that allows clients to request translations and monitor their progress via Slack. It’s a solution that provides next level convenience for the client instead of forcing them to use yet another platform. It also shows that LSPs are not afraid to innovate and invest in order to customize their offering to their clients’ unique needs.

Trickling down to the mid-market

While the trend we are describing in this section is mostly true for the top 100 largest companies in the industry, interviews with LSPs of all sizes have revealed that the trend has started to trickle down to the mid-market segment. Even companies in the $5 million bracket have reported that they either have already entered into closer partnerships with their clients or that they are working on it.

The name is the game: Rebranding for Growth and Differentiation

“We don’t consider ourselves an LSP anymore…” is a phrase we hear a lot. As LSPs are diversifying their service offering, many are trying to come up with a name that better reflects their new reality and ultimately generates better leads. 

There are many names making the rounds in industry circles. Popular ones include “Localization Success Partner” and "Localization Solutions Partner" — two terms that keep the old acronym but expand the definition of what LSPs do — as well as LangOps (short for language operations). The ones using the latter argue that time has come to retire words like localization and internationalization and that a new paradigm is needed. LangOps describes a cross-functional, tech-enabled collaborative environment, particularly relevant for enterprise clients. In reality though these concepts are not revolutionary. 

Aside from these kinds of rebranding or repositioning attempts, some LSPs also continue to redefine themselves as tech companies instead — a trend that is not exclusive to the language industry but can also be found in others, such as the IT sector. Companies in this bracket have developed their own technology that now plays a crucial role in how they operate internally as well as in how clients request services. In essence, it is technology that increases efficiencies by automating much of the ordering process. This is mostly realized in the form of client portals that, for instance, automatically match clients with the right interpreter or translator or send the content to the right MT engine before it moves to the post-editing stage (with high percentages of zero-touch orders). Ultimately, very few of these LSPs license and sell their software but, instead, use technology to sell services (also known in industry circles as tech-enabled LSPs).

Why are LSPs choosing these new definitions? 

  • For differentiation and marketing purposes with the ultimate goal of attracting more customers by changing the conversation.
  • To make the company more attractive for outside investment. The industry that has been flooded with PE and VC investment in recent years and by rebranding from LSP to tech company, a business can potentially increase their valuation by up to five times. 

In reality, the two factors listed above can be described as two sides of the same coin that go hand in hand. As companies are participating in the AI, MT, automation hype and rebrand to fit the bill, their hope is to attract more clients. In doing so, this makes the company more attractive to investment firms.

LangOps: The Vision and the Reality

In April 2021, João Graça, the co-founder of Unbabel, published an article in Forbes magazine proposing LangOps as a new paradigm for the language industry, rightfully arguing that terms like localization and internationalization have run their course. The article has sparked debate among industry leaders. Luminaries like Britta Aagaard and Jochen Hummel have hit the road sharing the vision of the end of the siloed approach to language services in the enterprise and its inefficiencies and the dawn of a cross-functional tech-enabled collaborative environment called language operations or LangOps. 

The vision makes sense from a logical and pragmatic perspective. Who wouldn't want to have all their content and communications aligned and managed in a consistent manner across organizations, platforms, and geographies? What enterprise wouldn't want to have their customers' journey through offerings and systems be integrated to allow for rapid and appropriate responses to customer inquiries, no matter what language the customer speaks? 

After many years of working with enterprise customers in multiple industries, we cannot count how many times we have worked on projects to centralize and consolidate language services inside organizations. Here are three examples that, in our opinion, hinder the dissemination of LangOps.

  • Organizational structures. A company like Microsoft is present in 190 countries and has over 220,000 employees, and Volkswagen has over 660,000 employees in 153 countries. Just try to imagine coordinating all the translations required in product, sales, marketing, legal, HR, training, support, events, and any other departments. An added element is that companies are in constant reorganizations, and all business functions are shuffled from one department to another, making it virtually impossible to standardize processes across areas. 
  • Original content and budgets. The first exercise we engage in when auditing localization practices is what we call "follow the content, then follow the money." It is necessary to look at who creates content for whom and in whose budget that content is. If original content is paid by many different stakeholders in the enterprise, so are language services. The person who owns the marketing budget might have zero influence on the budget for customer support or human resources. Training might be paid for by the product organization or by the sales department. To add complexity, some costs are covered by the headquarters while others are assigned to in-country operations. Philosophically, it makes sense to try to centralize language services and offer them as a LangOps inside corporations. Many have tried, and many try still. But the truth is that organizations are dynamic with constant modifications in policies and priorities dictated by changing economic, environmental, and leadership changes. In order to accomplish the vision of LangOps, companies would first have to be able to consolidate communications in the original language. 
  • Platform proliferation and new technologies. One of the key elements of the LangOps proposition is that language technology enhanced by machine translation and artificial intelligence can eliminate the barriers to cross-functional collaboration. This works in theory, but in practice it is something that might happen at a specific moment in time. It is a condition, not a state. The way content is delivered — and therefore the demand for language services — is in constant change with the proliferation of file formats, platforms, and technology solutions that crop up daily. There is a tendency to look at technology change almost linearly towards the future, when in reality change comes from all angles, all the time, and at different speeds. In the language industry alone, the number of technology solutions went from approximately 500 in 2017 to over 800 in 2022, according to Nimdzi's Language Technology Landscape report. Each business problem has several alternatives that can be implemented in multiple scenarios. The challenge now becomes: Which of these 800 technologies are going to compose the LangOps deployment? Which ones prevail when companies get acquired? Who is going to be the arbiter of these decisions? 

LangOps is here to stay. But it is not a solution — it is a promise. The growth and survival of the language industry hinges around the fact LSPs manage complexity. They can deal with multiple variables, randomness, nonlinearity, and even irrational behavior. In a world that loves entropy, LangOps can put some order or predictability in language processes for parts of an organization during a certain period of time, while the whole gradually declines into disorder. For the world at large, after a thorough explanation of  LangOps, their reaction might just be the classic: "Oh, you are talking about translation!"

Tech layoffs and the talent crunch — another Great Reshuffle?

In the 2022 edition of the Nimdzi 100 we reported that LSPs from all sides of the market listed talent acquisition and talent retention as two of their biggest challenges in 2022. Summarizing briefly, below are three of the factors we identified as affecting the talent crunch at the start of 2022:

  • Finding the right people for the right price: While some could not hire as fast as demand was growing, others struggled not with finding but being able to afford the right people. At the same time, linguists were (and still are) criticizing low rates and poor working conditions. 
  • The right people at the right time: Depending on the segment of the market, it is not too uncommon that demand can rise and fall quite abruptly (especially in media localization). For instance, when several clients suddenly want to scale up in the same region at the same time. Finding the right talent quickly during these hyper growth spurts and then trying to keep them around after were two challenges identified as affecting talent acquisition and retention.  
  • Competition: The talent shortage also applied to roles such as sales and project management. In 2022, a number of companies on the top 100 highlighted that they lost quite a few good people to client-side companies outside the language industry. Particularly to large tech firms who were able to make more lucrative offers. 

Checking in on the same trend this year it appears the tides have turned. For one, only about one third of respondents to our survey for the Nimdzi 100 report they are currently experiencing challenges related to talent acquisition and retention. In addition, when asked directly during the interview stage of this project, LSPs confirmed that aside from the peaks and valleys in demand surrounding hyper growth spurts, attracting and retaining talent is no longer a top-of-mind concern. 

An interesting development in this regard is related to the mass layoffs in the tech industry. Between October 2022 and January 2023, news of layoffs in the thousands to tens of thousands at tech giants, including Amazon (30,000), Microsoft (11,000), Google (12,000), Twitter (3,750), and Meta (11,000) made headlines. Interviews with LSPs who derive a large portion of their revenue from clients in this sector revealed that, as a result of these layoffs, employees who had previously left the company to work for the client side are now looking to return to their previous positions. 

While the tech industry might be the most extreme and most visible example,layoffs are increasing in other industries across the labor market as well, even though unemployment rates are still low.

Typically, when layoffs occur on the client side, there is an increase in the demand for contractors. In other words, the need for language services doesn't disappear, and the people who did the work on the client side are now doing the work on the vendor side and therefore the demand for LSPs increases.

Multilingual meetings — more than just interpreting

One major byproduct of the boom in virtual events caused by the pandemic was that there were more requests for multilingual meetings than ever before and in entirely new formats and compilations. What we have witnessed ever since is both the emergence of the Multilingual Meeting Provider (MMP) and the multi-skilled linguist.

From multilingual meeting provider to event platform

The needs of clients are shifting and buyers are increasingly looking for a provider that can do it all. Clients don’t want to go to one company for their interpreting needs, to another for translation, and again to another for captioning — and potentially all for the same event. 

That being said, as the pandemic effect winds down, the novelty of interpreting systems and environments is also waning. Instead, what we are seeing is that the focus is increasingly shifting toward event management. In fact, we predict that over time, the different language services MMPs offer will simply become features on event platforms clients can avail of. While this might be in early stages, first moves have been made. For instance, remote simultaneous interpreting (RSI) technology provider KUDO no longer consider themselves an RSI platform, but rather a meeting platform. And for good reason, because what KUDO and others in this space offer is no longer just about interpreting. Today, multilingual meetings can be facilitated in many different ways, including:

  • Captioning: Monolingual live-transcript of the conversations on screen, either facilitated by a machine, a linguist, or a mix of both.
  • Subtitling: Translated transcript of the conversation on screen, also either facilitated by a machine, a linguist, or a mix of both.
  • Interpreting: Interpreting comes in many different forms, ranging from RSI to video remote interpreting (VRI) in consecutive form, to over-the-phone interpreting (OPI), to fully automated machine interpreting (MI) using AI.
  • Respeaking/Speech-to-text interpreting: Respeaking requires the respeaker to add punctuation and other formatting to their verbal output. It can be performed in many different ways and typically requires both a linguist and a machine.
  • Document translation: Let’s not forget about all the documents that might need to be available in many different languages for onsite and virtual events.
  • Voice-over: This might be used when pre-recorded videos are played at an event.

As the market for multilingual meetings is evolving it is perhaps not surprising that this field is no longer dominated by interpreting providers alone. Other players have appeared on the scene, including machine translation providers, pure tech players from outside the language services industry, media localization companies, video conferencing giants (Zoom, MS Teams, etc.), and LSPs who traditionally only focused on VRI and OPI services and are now looking to get into the events space by adding RSI. At the same time, RSI providers — the traditional players in this field — are expanding their offering to reach a wider client base by adding features such as MI and machine-generated live subtitling.

The multi-skilled linguist: adapting to a changing market

It should come as no surprise that this trend has also trickled down to the linguists who are facilitating these meetings. The pandemic pushed many into offering a more diversified service portfolio as they sought to make ends meet. Today, many interpreters are increasingly moving into new terrain such as voiceovers, respeaking, captioning, technology consulting, and event management to stay relevant and offer a better service to their clients.

While in many cases, linguists simply upskill themselves, some LSPs are also actively facilitating the transition into new language services. For instance, media localization provider Iyuno has an open call on its website that allows anyone to record their voice and submit it to be considered for work as a voice actor. A clever move that speeds up the search for potential talent and offers a quicker in-road for those interested in going into this line of work. 

As the multilingual meeting provider develops, we can expect that the multi-skilled linguist will be in high demand.

Machine Translation Quality Estimation (MTQE)

The language services landscape is known to be quickly exposed to technological trends and disruptions. Nonetheless, no matter how big the threat is, the industry always manages to adapt and adopt. In a deteriorating global economy where artificial intelligence (AI) is booming, localization teams are forced once more to transform themselves into flexible and innovative business centers that constantly scan the technology market for cost-efficient solutions driving productivity. In this context, MTQE is a technology trend we identified that is likely to break through in 2023.

MTQE is driven by AI models that are trained on millions of post-edited translation pairs to assess and predict the accuracy of machine-translated content. As evaluating MT quality is never entirely unbiased — not even in the case of human evaluation, MTQE is intended to predict how much post-editing a specific machine translation requires, thus identifying potential risks associated with the translation.

MTQE isn't necessarily new but, accelerated by the dim economic situation, it is about to establish itself in the language technology landscape. Leading providers include Unbabel, TAUS, and ModelFront. The Translation Management System (TMS) space is represented by Phrase and Smartling.

Apart from being cost effective and fast, it is also scalable since the data that is used to train MT models can be reproduced to train MTQE models. That way, it generates an additional layer of intelligence on top of regular machine translation systems. It’s a great opportunity for localization managers with lots of MT-ready content such as ecommerce product owners.

AI has made incredible strides in recent years and became the talk of every industry since the end of 2022 with the release of OpenAI’s ChatGPT (see section on ChatGPT further on in the report).

Within the language services industry, the use of AI certainly is nothing new, yet it continues to shape the industry. Thanks to advances in MT and synthetic voice quality — technologies that had previously been considered sub-par and not ready for use — are now stepping out of the shadows, presenting new use cases and opportunities. This is a trend we can expect to accelerate. 

This section outlines the latest AI trends in the language services industry that businesses and professionals alike should be aware of.

Machine-generated live subtitling: A new staple for (virtual) meetings?

Live subtitling is a service that has picked up immensely since the spike in video conferencing, and the technology in this space has made tremendous strides.

In essence, the service of live subtitling involves taking spoken content and converting it to written content in multiple languages with minimal delay. Live subtitles are used for online meetings as well as in live broadcasts, at onsite events, and to make radio content accessible online. There currently are three main ways in which live subtitles can be generated:

  1. A linguist types the subtitles in real-time.
  2. Speech-to-text technology followed by machine translation is used to generate the initial subtitles, and a linguist edits the output in real-time.
  3. The subtitles are fully generated by a machine, without any human input.

While the first option is the traditional way, it is also increasingly a rare sight. Even for live broadcasts, a mix of human and machine is becoming the norm in an effort to increase speed and efficiency. Ever since the Zoom boom, the use of purely machine-generated live subtitles has increased both as a result of higher demand and advances in MT technology. 

What is interesting to note about this trend is that, similarly to the wider multilingual meetings space, the providers of live subtitling services are coming from different sides of the industry:

  • Media localization providers experienced in the field of subtitling in a more general sense.
  • Machine translation providers who are integrating their technology into the meeting and events space.
  • RSI providers who are looking to offer a more robust service portfolio to their existing clients and also reach clients with smaller budgets.
  • Tech companies from outside the industry as well as video conferencing giants such as Zoom, MS Teams, and Webex, who have all added their own text-to-speech translation feature to their platforms. 

In other words, with the advances of AI, we are starting to see crossovers between segments of the industry that used to be quite separate for a long time.

AI dubbing

Dubbing is one of the bread and butter services in the media localization industry and, to date, one that is (almost) exclusively performed by voice actors. However, the latest developments in AI dubbing might change the landscape 

The advancement of synthetic voice technology has greatly improved. Some synthetic voices now sound incredibly similar to human voices, making it difficult to distinguish them from actual human speech. The latest technological innovations allow for the synthetic voice to mimic the inflection and mannerisms of the original speaker.

Although not fit for entertainment purposes (yet), current use cases for AI dubbing range from international broadcasts to voiceover for documentaries and corporate videos. In addition, during interviews for the Nimdzi 100, several media and game localization providers reported that they are exploring use cases, such as the following:

  • Minor characters: AI dubbing might be used for minor characters, either in a fully synthetic way or in such a way that one voice actor speaks all minor characters and the voice is synthetically altered to sound different each time. 
  • Background chatter: In games, AI dubbing might be used for background chatter when players still need to understand the information in the background but the entertainment factor is less relevant.
  • Tiers: Several LSPs mentioned that they are considering offering different tiers to their clients, depending on the dubbing quality that may be required for different kinds of productions and budgets.
  • Changing voices via AI:
    • Child actors could potentially be dubbed by older actors and then the voice could be changed to sound younger, using AI, which would be a major increase in efficiency.
    • In many traditional dubbing countries, specific voice actors are assigned to on-screen actors (permanently, always the same voice). But what if these voice actors are suddenly too busy or retire? AI could present an opportunity for voice actors like that to sell their voices, meaning someone else does the actual dubbing work and then the voice is changed artificially afterward.
  • Audio description (AD): AD is a service that is not available in all markets yet, and in countries where AD does exist, the majority of AD services are provided in English. Considering that AD typically requires more neutral narration than acting, using AI might be one way to bring AD to more markets in a budget-friendly way.

The developments in synthetic voice applications and AI have drawn attention in the business world. Although the exploration of this technology is ongoing, it is significant that the idea of AI dubbing has transitioned from being rejected to being actively researched and considered by major media localization players.

Machine interpreting — on the rise

This is not the first time that we are reporting about MI, but it continues to be a hot topic since AI advances at such an accelerated pace. 

But let’s clarify first what exactly we mean when we talk about MI. MI is the transmission of a spoken message in one language into a spoken message in a different language using AI. MI, which can also be called speech-to-speech translation (S2ST), uses automatic speech recognition (ASR), followed by AI transcription, machine translation, and finally a synthetic voice to speak the message in the target language. This so-called cascade model is what all MI solutions on the market to date are built on.

What MI solutions are currently available?

MI technologies can be roughly divided into two categories: those for individuals and those for businesses.

The solutions for individuals come in the form of handheld devices like Cheetah Talk, ili Handheld Translator, and Vasco Translator or as applications for mobile devices such as the solutions by Skype Translator and iTranslate Voice App. Another popular form of MI hardware are earbuds. Timekettles’ WT2 Plus is a good example of this technology, as are the Google Pixel Buds

For businesses, MI software in the form of applications are most widely used and are gaining in popularity. This type of MI tool is used to interpret meetings, conferences, large-scale events (both online and in-person) or other spoken interactions online, such as online courses. In the conference and events space, Wordly is currently the most specialized and well-known solution on the market, though by far not the only one. For example, other noteworthy solutions come from GTCOM as well as XL8. Watch this space!

Up until recently, most MI solutions targeted individual consumers — such as tourists — especially in Asian markets. They were designed to facilitate simple two-way communication. Increasingly, however, MI is moving into the sphere of multilingual online meetings and conferences, which has traditionally been the realm of human conference interpreters. There are two main reasons for this shift; the first is pandemic-induced and the second is technological. The pandemic ushered in a new era of virtual meetings driving the need for multilingualism online. At the same time, technology in this space made significant leaps, particularly thanks to the advances made in machine-generated live subtitling. 

This combination of increased demand and considerable improvements in quality has resulted in more companies investing in speech-to-speech technology and new solutions popping up on the market. It’s a development that is not only true for the interpreting sector but also the media localization field where AI dubbing is coming onto the scene and some solutions can even retain the original actor’s voice in the synthetic version (see section on AI dubbing). It is not unlikely that, when it comes to AI, we will eventually witness a convergence of the media and the interpreting segments.

Another noteworthy development is that RSI providers are starting to come into this space. In January 2023, KUDO was the first RSI platform to release its own MI feature. This development enables the company to do two things:

  1. Tap into a larger client pool and also reach those with smaller budgets for whom RSI services are too expensive. 
  2. Remain competitive when up against video conferencing giants, such as Zoom, MS Teams, and Webex, that have all added their own RSI features in addition to closed captions and machine-generated live subtitling. At least for now, none of the big platforms have their own MI feature, although Zoom, for instance, has an add-on for Wordly.

ChatGPT

OpenAI’s latest GPT-3 (stands for Generative Pre-trained Transformer 3) variant, called ChatGPT, is all the rage these days. And for good reason — the technology has come a long way and some are calling this a tipping point for AI. For those not in the loop, here is a brief introduction: GPT-3 is trained on public data and applies machine learning to perform a number of on-demand tasks with only minimal input, including:

  • Translation of common languages
  • Summarizing text 
  • Writing articles, poems, stories, scientific papers, etc.
  • Answering questions

ChatGPT is the latest variant of GPT-3. In addition to the tasks listed above, ChatGPT can also:

  • Write and correct code
  • Be used in chatbots and virtual assistants
  • Generate conversational text
  • Explain complex subject matters
  • Be fine-tuned/customized for a variety of language tasks

What makes it a potential game changer as opposed to what’s already out there? There are two main things: 

  1. the quality of the results, which sound remarkably human. 
  2. The potential use cases because it is open to everybody! 

Although not without its limitations and by no means a de facto source of truth, ChatGPT has already changed the game because it enables anybody to produce more work at a much faster rate. To what extent the technology can be used (e.g. how much editing and fact-checking is required), and whether it will truly become “the Google killer” that some hype it to be, remains to be seen. 

In the language industry, people are talking about ChatGPT and trying to figure out how it will impact them. While it’s too early to make firm statements, it’s not unlikely that large language models (LLM) such as GPT-3 will be embedded in different steps of the translation process. Already, it has proven to be a useful tool to unlock writer’s block in the content creation process or to fast-track scripts for presentations and speeches. While not entirely monolingual, the technology works best in English for now. Additional use cases that have been determined so far include:

  • Augmented MT: eliminating gender bias, adapting formality.
  • TMS integrations: automated terminology extractions, QA, scoring, etc.
  • Transcreation: producing more content at a faster pace.

Right now, there is a lot of hype, and ChatGPT has already become a game-changer no matter which way you look at it. However, whether this means that the technology will be a true disruptor in the long run in the sense that it will impact our everyday lives as well as our workflows in the language industry is rather doubtful but it remains too early to say.

The Beninatto Theorem

It is a universal principle that people tend to adopt new fears, such as anxiety about the future or the fear of obsolescence, before they are able to overcome previous fears, which eventually fade into the subconscious.

In the language industry, this phenomenon is manifesting as the introduction of new technologies creating new fears of obsolescence or the demise of the industry. However, as time passes and new technologies emerge, the industry begins to overcome these fears and they eventually become relegated to the subconscious. This cycle repeats as each new technology brings with it new fears, only to be overcome as the industry adjusts, moves forward, and keeps growing.

The Beninatto Theorem and Amara's Law provide a framework for understanding the impact of new technologies like ChatGPT on the language industry. Amara's Law highlights that we often overestimate the short-term effects of a technology while underestimating its long-term impact. By considering both of these principles, we can gain a more comprehensive understanding of how ChatGPT and other AI language models will shape the future of the industry.

The impact of global events

We like to say that the language services industry is impervious to crises. There is always a need for language services, which is why our industry tends to outpace the global economy. At the same time, there is no denying the fact that individual businesses will nonetheless have ups and downs. 

Recent shocks to the global economy have triggered a mass reshuffling of the labor market, and we are currently experiencing inflation, currency fluctuations, an energy crisis, and mass layoffs in the tech industry. 

For this year’s Nimdzi 100, we wanted to know how many LSPs are already feeling the impact of these global events and for how many it is impacting their 2023 strategy.

The results from our survey show that two out of five companies are already feeling the impact of the current economic crisis, and another 30% are preparing for it in their 2023 strategy, despite not feeling the impact yet. Another 30% report not feeling any impact at all.

Overall, experiences are similar from one continent to the next. However it is clear that the effects have been felt more keenly in Europe and Asia than the Americas so far. Almost half of European and Asian companies (44.4% and 47.8%, respectively) have already felt the impact on their businesses, compared to 31% of companies based in North and South America. There is also a difference in the number of companies that predict not being impacted at all: roughly a quarter of companies headquartered in Europe and Asia (27.8% and 26.1%), compared to a more than a third of companies in the Americas (34.5%). 

Digging deeper, we asked those who reported having felt the impact already what strategies they have implemented so far. For companies in this bracket, the most popular strategy has been to invest in technology and process change (68.2%). Another 43.2% have also added new services, and approximately a third have raised prices or reduced staff. Just 15.9% have reduced prices as a reaction to the economic changes.

What changes have you implemented?

Though of course it is not just LSPs who are impacted — everyone is, and buyers are no exception. So we asked respondents to our survey what the reactions from their clients have been so far.

The majority of companies note that clients have reduced their order volumes (64.2%), and another 22.2% report that clients have reduced the number of languages they are localizing into. In addition, 44.4% state that clients are choosing cheaper, machine-generated solutions instead of human-led services. For 16% of respondents, clients have not made any changes to their business with them yet.

What are your customers doing?

Lastly, we wanted to know what strategies companies in our industry are implementing to combat rising inflation and economic pressure in 2023. The results show that the most-reported course of action for LSPs is increasing the use of machine translation; almost 60% of companies will be using this cost-saving method. Other popular solutions include increasing prices with clients (39.7% of companies) and reducing office space to save costs (32.9%).

In addition to these strategies to increase revenues and cut costs, 53.4% of companies report that they will increase salaries for their employees to help compensate for the higher costs of living in the current economic climate.

Only 17.8% are planning to reduce staff and 23.3% want to ask vendors to reduce their rates.

What strategies are you planning to roll out in 2023 to offset rising inflation and economic pressure?

Acronyms used in this report

Sarah Hickey Chief Researcher Nimdzi Insights

This report has been researched and written by Nimdzi's VP of Research, Sarah Hickey. If you wish to learn more about the state of the language industry today, reach out to Sarah at [email protected].

21 February 2023

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