How large is the interpretation industry?
By Adam Wooten, Elanex General Manager (US)
Originally posted on Adam’s blog, T&I Business in February 2006.
The entire translation and interpretation industry has heard of Common Sense Advisory‘s list of the Top 20 Translation Companies, which is also the most timely resource for projections and estimates of translation and localization industry size ($9.46 billion in 2006). Unfortunately, it is much more difficult to find such information on the interpretation industry. Does such information exist? If so, where is it available?
Due to the nature of translation and interpretation, information on the interpretation industry is difficult to extract from most language industry research. This is particularly evident in Common Sense Advisory’s “Top 20” list of companies ranging from $377.1 million to $17.2 million in revenues. The report ranks Lionbridge and Titan (soon to be part of L-3 Communications) as the top two translation companies, both of which generate unspecified millions in revenues from interpretation services; however, the same report excludes the telephone interpretation giant Language Line, Inc., which generated $145.0 million in 2004 and therefore could be ranked 4th.
When questioned by T&I Business about Language Line’s absence from the rankings, Renato Beninatto, COO of Common Sense Advisory, noted that “in the case of all the Top 20 companies, interpretation represents less than 30% of their business, the formula being the inverse in the case of OPI [Over-the-phone Interpretation] companies.” Beninatto also noted that Language Line and NetworkOmni, the 2nd largest OPI firm, are often viewed differently by both buyers and other language companies Clearly, there are valid reasons both for and against distinguishing the interpretation industry from the translation industry in market reports, but that leaves us with very little information on the interpretation market and its key players.
Within the interpretation industry, the OPI market has seen an enormous amount of growth in recent years, so more information is available on this segment. Language Line’s 2004 SEC filings are a wonderful source of information on the OPI market. In one filing, Language Line pegs the potential OPI market at greater than $1 billion and the served OPI market at less than $200 million (based on the fact that it claims to hold 75% market share), which differs from the $300 million to $400 million estimate made by George Ulmer, owner of NetworkOmni, in the April 2004 issue of Los Angeles Magazine.
Language Line lists its most significant U.S. competitors as NetworkOmni, Tele-Interpreters, Bowne (now Lionbridge), and Pacific Interpreters, none of which were estimated to have generated more than $15 million in revenues in 2003. Language Line also estimated that Language Line, Ltd. (which Language Line, Inc. has since acquired), of the UK, generated $8 million and CanTalk, of Canada, generated $2 million in 2003. Language Line also provides internal information that may be very representative of the industry (considering Language Line’s self-declared 75% market share) and useful for competing in the market. This representative information includes language usage by billed minutes, customer distribution by industry, and an average annual increase in billed minutes of 21% from 1998 to 2003. All this information is vital to executives at small OPI firms who wish to identify competitors, languages to staff, industries to target, and growth expectations.
Unfortunately, information comparable to that already mentioned does not appear to be available for the interpretation market as a whole. T&I Business has informally asked many language executives how large they believe the interpretation market to be, and most have “guesstimated” it to be approximately 10% of the translation market – whatever that is. Applying that percentage to Common Sense Advisory’s numbers, that would put the US interpretation market at $397 million and the world interpretation market at $946 million in 2006. Until a market research firm accepts the challenge to tackle the interpreting industry, these are the some of the only estimates available.