Media localization has exploded as a business segment in the last couple of years. The space is congested with strategic merging and acquisition (M&A) activities as well as investments provided by venture capitalists or private equity. With M&A, companies are aiming to expand their solution portfolio by adding new service lines. Other motives behind consolidations include winning over the clients and talents of the acquired companies and improving their technology for scalability.
The increase in the number of video streaming platforms is driving more growth for media content localization. Popular SVODs such as Netflix, Disney+, and HBO Max lead the way on this front. Social media giants are asserting a strong role, too. 500+ hours of videos are uploaded to YouTube every minute. In addition to that, there are other video-sharing platforms such as TikTok, Facebook, and Instagram, which collectively offer an enormous quantity of audio-visual material.
TV broadcasters have recognized the threat they're facing: People are increasingly turning to digital video platforms at the expense of linear or cable TV. New models have begun appearing in the TV broadcasting industry to create a stronger digital presence in the media. They adapt their shows and series for other languages via subtitling and dubbing. With ad-supported free streaming channels (FAST) gaining traction, TV broadcasters can use such localized content on FAST channels or establish their own digital platforms with content in multiple languages.
Media Localization Will Continue Gaining Steam
The major factors having a knock-on effect on the rising demand for multilingual content include:
- Transformation of digital content space,
- Increase in the number of video streaming platforms,
- Rise of a more demanding audience for premium content,
- Role of social media companies in optimizing video sharing functionality,
- Desire for a more personalized viewing experience in the audience’s native languages.
Investors are shifting toward media localization. They target companies that keep abreast of the business through cutting-edge, AI-powered scalable solutions. Along with rising investments, another wave has been sweeping the industry for a while now: acquisitions & mergers, or joining ventures and partnerships if outright M&A is out of the question. The primary goal of M&A activities is to branch out into new markets, diversify solutions for existing and newly "acquired" clients, and leverage novel technologies to meet the demand for large volumes of localized content.
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Persuasive Reasons to Invest and Consolidate: Why It Makes Sense
↣ Language touches every area of our lives
Just remember the dark days when Covid-19 pandemic was in its full swing. Many businesses closed during the lockdowns while students and employees quickly shifted to remote modes of communication. Streaming video platforms attracted massive numbers of viewers and some shows such as Netflix production Squid Game became instant hits. Social media served as a conduit through which people interacted with each other and stayed connected with an isolated world. During this time, the burgeoning creator economy marked an impressive growth trajectory during this time. With language being at the heart of all these activities, people recognized the value of experiencing content adapted for local languages. For example, 60 percent of the people who watch Squid Game have chosen the English dubbed version.
Language services and media localization are highly resilient, sustainable and relatively risk-free - even against events that dramatically impact the lives of the global community such as pandemics. That’s the key reason why investors consider it profitable to invest in media localization. This is not good only for business but for the benefit of humanity, as well.
↣ The Digital Content Boom Shows No Signs of Slowing Down
We are in a time of the digital content boom, and there is no sign of it losing its momentum. With the use of AI-powered technologies, subtitling and dubbing are increasingly becoming the most effective, direct, and scalable ways to cater for the needs of the global audience. Many content owners and distributors find that the utilization of technology, such as AI-enabled tools, simplifies their localization efforts. The use of AI technologies for localizing content addresses common challenges associated with traditional ways of localization. These include prolonged delivery times, high production costs, a lack of quality, and streamlined workflows.
↣ Fragmented localization market can become more integrated
The media localization market is quite fragmented. This has important implications for how competition among localization providers is driven and M&As are transacted. Even if they are positioned as competitors within the market, it’s often the case that two localization companies differ greatly in the types of solutions they offer and have varying capabilities, especially in terms of human resources and technological innovation. Similarly, not all localization companies target the same markets, another factor that explains the fragmented nature of the industry. M&A transactions promise to bring a more consolidated ecosystem as they fuel service variation, the use of technology, scale-up, and globalization.
Investments in AI-focused Localization Solutions Are Increasing
Technology is vital to breaking down barriers set by traditional ways of subtitling and dubbing, which are extremely human-dependent, resulting in prolonged delivery times and increased costs. In such an environment, media companies, online learning platforms, and players in the creative industries, including content creators and influencers, may back down, and massive amounts of precious stories will remain unheard on a global scale. They require effectively automated solutions for subtitling and dubbing their content for worldwide audiences, and they need to start talking to them in their languages.
Many investors have already recognized the positively disruptive potential of the use of AI in content localization. In the last year, VC funds invested in localization companies like Ollang Inc. that utilize AI for their solutions.
Localizing media content requires creative solutions. At Ollang, we combine automation with the best of human talent. Any content owner, especially video streaming platforms, TV broadcasters, and e-learning platforms, can upload content into Olabs, our centralized AI-driven dashboard for project management, and trust the outcome they will get. Our software starts the automated process and runs step by step: it extracts texts and embeds time-codes to form subtitle files. At the same time, the subtitle file in question is automatically translated to the desired languages. In dubbing projects, the step is completed with the most suitable synthetic AI-generated voice or voices being assigned to the project by the system, which then voices the speech and mixes it with media files.
With that being said, the involvement of human translators and voice artists continues to be a key part of our business. Our translators and editors from more than 50 countries review and refine the automated results. Moreover, we invest in training our translators through initiatives such as Localization School and introduce our business to prospective talents in the industry by organizing student gatherings.
Key takeaways
Capacity requirements, affordability, and speed are major challenges faced by media localization companies. Investments in companies that are always on the lookout for scalable, technology-led solutions to lower the barriers to localization will make a stronger business case. So, we will see more investors taking advantage of allocating funding to such future-proof companies.
On the side of M&A activities, there will be enough deal-making transactions to note in 2023, just as there were in the previous two years. A recent example came from Piccoma, a Japan-based subsidiary of the South Korean company Kakao, which has purchased the majority share of Voithru, a content translation company. South Korea’s content market has seen significant growth in the last few years, and the amount of non-English content is on the rise. Media companies are looking for scalable and more efficient ways to localize such content to English as well as other European languages. Piccoma’s move is noteworthy in that it enables Asian content creators and companies to bring their content to international audiences.
Among the platforms added to its service line, Jamake gets attention for serving YouTube creators with subtitle translation. Piccoma will definitely try to use this platform as a lucrative space for content creators; however, it may consider partnering with a localization provider that offers more diverse and quality solutions. At the moment, Jamake serves in a limited number of languages and does not have a solution for dubbing. Human review of the automated translation is available on request, which means extra costs may be incurred if human review is demanded.
Whether acquisitions and mergers will bring benefits to the media and entertainment industries depends on how sincere companies are in their efforts to create value for both businesses and people, as well as a media localization environment that liberates content distributors from financial, quantitative, and qualitative bottlenecks around subtitling and dubbing.