3 weeks ago
July 1, 2019
Media Localizer ZOO Digital Strives to Move Past ‘Frustrating’ Disruptions
Media localization was one of the key topics at the latest edition of SlatorCon London, as buyers from Discovery, A+E Networks UK, and ITV took the stage during the media localization panel.
Collectively responsible for hundreds of thousands of hours of subtitling and dubbing each year, the three buyers discussed how they managed the high volumes of content that need to be localized within the media entertainment space.
These localization needs are, for the most part, outsourced to global media localizers, which simultaneously contend with and benefit from the rise in demand for multilingual media content.
One such media localizer and a relatively new entrant to the space is ZOO Digital, having pivoted from largely providing media production services for DVD and Blu-ray prior to 2012. As a UK-listed company, media localizer ZOO Digital reports on its earnings on a regular basis.
Slator 2019 Language Industry Market Report
After its 2019 fiscal year closed at the end of March 2019, ZOO published a year-end trading update and notice of results. Revenue came in at USD 28.8m, and growth slowed to a little over 1%. ZOO also reported an operating loss of USD -1.3m for the period, down from a USD 0.6m profit the year before.
What these results demonstrate is that it is not just the largest media localizer by revenue, SDI Media, which is facing headwinds and tapering off in its growth. SDI fell further into operating losses of USD -11m in 2018 and revenues inched up by 0.6%. Furthermore, ZOO’s latest results are a far cry from the company’s 2018 performance, when annual revenues grew 73% from 2017. As demand for media localization has risen in recent years, competition has become increasingly fierce.
ZOO’s audited results for the year ended March 31, 2019 also point out “frustrating” disruptions encountered by the company during the year, which had an impact on revenue growth. The statement from ZOO Chairman Roger Jeynes identified two main challenges: First, “one of our largest clients changed the way in which it engages with its supply chain”; second, “our non-core declining legacy DVD and Blu-ray business shrank at a faster rate than had been anticipated.”
As a response to these challenges, ZOO now plans to be “more cautious in our forecasting of sales from this major client,” and is no longer forecasting any significant income from its DVD and Blu-ray business. DVD and Blu-ray sales were slow over the Christmas period, which led to a further decline in sales in the second half of the year.
Slator 2018 Media Localization Report
The company also continued to invest heavily in technology over the year, having rolled out ZOOStudio and ZOOScripts, launched the ZOO-Enabled Dubbing Programme (ZEDS), and extended its cloud-subbing service ZOODubs to cater to lip-sync dubbing in addition to voice-over.
Slator reached out to Stuart Green, CEO of ZOO Digital, for comment on the audited results. Green told Slator that “ZOOStudio does not itself incorporate linguistic productivity features, but rather it is integrated tightly with all our productivity tools.”
Collaboration is now a key factor in ZOO’s product development: The ZOOStudio project management platform is available to third-party media localizers through an API so customers can work with multiple vendors simultaneously, while the ZEDS program has onboarded 70 dubbing studio partners.
According to MESA, dubbing accounts for 70% of total media localization spend in EMEA in an industry that is expected to grow between 5–8% per year for the next two years.
ZEDS was developed to allow for “certain circumstances when our clients may request that some recordings (perhaps for specific languages or for certain voice artists) are captured in traditional dubbing studios,” Green said. Differentiated from the company’s cloud-dubbing offering (where voice recording is done remotely and not necessarily in a traditional dubbing studio), with ZEDS, third-party studios can record voice directly into the ZOO system. ZEDS is initially focused on 15 key languages although “we anticipate that this requirement may arise in any language,” he added.
Partnering with smaller, traditional brick-and-mortar studios is a compelling strategy in the highly fragmented dubbing market. According to Green, customers can be “unwilling to source their localisation needs from a single vendor and this is unlikely to change in the future.” Referencing figures from media entertainment body MESA Europe, published as part of a recent research report, ZOO highlighted that the top four dubbing providers account for only 20% of the market.
According to MESA, dubbing accounts for 70% of total media localization spend in EMEA in an industry that is expected to grow between 5–8% per year for the next two years.
ZOO also expects there to be an increase in demand for dubbing as a result of family-friendly content suitable for younger viewers becoming “more prominent on a wider territorial basis.”
ZOO’s outlook is positive and “trading in the new year has begun well,” the company said. ZOO shares have seen a slight dip since the publication of the audited results.
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