Translation Rates and The Matrix Revolutions

agent smith and neo

In the Matrix Revolutions lots of things happen and many of them make absolutely no sense, especially the ending. However, poor though the last part of the Matrix Trilogy was, Neo defeats the machines and Agent Smith (or Agent “Bottom Feeder” to us translators); and somehow saves Zion. If you’ve been following this Translation and the Matrix Trilogy, then in this post, you are expecting me to tell you how to free yourself from the Matrix; and by now you should have learned at least two things that will help you do that:

1. Just like in the Matrix there is no spoon, in translation there is no rates crisis. Rates are not dropping and the market has been increasing steadily for years. (If you haven’t seen the numbers supporting this, check out part one.)

2. The translation market is highly segmented and relies heavily on intermediaries. The bigger the Language Service Provider (LSP), the more market-specific information they have; thus also, the more leverage when asymmetry of information kicks in (explained here); leaving smaller LSPs, Agencies and Freelancers with the feeling they have no choice but to accept low prices and bad service agreements.

Translators often have a lot of misconceptions about how prices work in a capitalist economy; and in this blog, I have used my nerdy academic training in Law and Economics to explain how prices are actually set by the market (here and here). As I have shown in other posts, translators have little power over price in certain segments, but a lot of power in others.

If you remember the numbers, then you know that out of the US$ 34 billion that go into translation each year, only about US$ 4 billion are absorbed by the top 50 LSPs (that’s where translators have no power). What these numbers are also telling us is that US$ 30 billion are pouring into medium sized LSPs, small-or-medium sized boutique agencies, or directly into freelancers; and those US$ 30 billion are expected to increase by 12.17% next year. That’s where translators have power and can drop low-paying LSPs and bottom feeding agencies if they want to.

So the question is again choice; and the answer consists of choosing clients in the right segments. Those segments are “specialty service segments” or what some other translation bloggers are referring to as “premium markets”. Regardless of what you call it, the logic is simple: there are areas of translation that are prone to paying more because there is a lot of demand and very little supply, i.e. lots of translation work, very few qualified translators. Qualifications are hard to get and require large investments in training. Accessing these segments and escaping the Matrix involves depending less on large LSPs and more on direct clients and highly specialized or “boutique” agencies. To make more money as a translator, you don’t need to fight LSPs for a couple of cents on a given project, you need to change your clientele altogether and grab your piece of the 30 billion not being absorbed by them.

To escape the Matrix, you need to develop a business plan and marketing strategy that is appealing to direct clients and/or key players in the specialty service segments of your area of specialization. This is not easy, but it is feasible, and in future posts I will address different strategies for achieving it.

Translation Rates and The Matrix Reloaded


In the Matrix Reloaded, Neo meets the Architect and learns that the cause of the structural problem in the Matrix, leading to Zion’s systematic destruction and reconstruction, is choice. The same can be said about translation rates, but probably not the way you’re thinking. Allow me to elaborate…

In my previous post, we went down the rabbit-hole and found that translation is a US$ 34 billion a year market, with an estimated 12.17% yearly growth, that is expected to hit US$ 37 billion in 2018. Another interesting fact about the translation market is that it continued to grow steadily even throughout the recession. While the global economy plummeted, the translation market soared. However, paradoxically, throughout the recession, freelancers and small translation agencies were often being fed the idea that rates were dropping and the market was suffering.

How is this possible? Well, the Matrix, of course. By way of, at least, two factors:

1) Strong reliance on intermediaries: Translation is a highly segmented market where 70% of the work is distributed among freelancers and tiny translations companies with 1 to 5 employees. Thus, the market depends heavily on large companies that outsource to smaller intermediaries who, in turn, outsource to even smaller intermediaries or freelancers; each one biting off a piece of the final price.

2) Lack of information and/or excessive misinformation: During the recession, each player was told that the price being paid by the end client had dropped and that there was less overall demand for translation. However, the abovementioned yearly growth rate of the translation market proves otherwise. In addition, translators often lack training in business, law and economics, and there are very few translation-specific business studies to help them understand how the market works from a financial point of view. Meanwhile, large translation companies have this information. We know this from looking at their yearly revenue.

In Law, we refer to this as “asymmetry of information” and it results in an imbalance of power when negotiating terms and conditions of an agreement that leads the weaker party (the one without the information, or the “little guy”) in a position in which he feels there is no choice but to accept the terms and conditions imposed by the stronger party (the one with the information, or the “big guy”). That’s how choice plays into this: The little guy cannot make an informed choice when entering into business agreements, he has to accept what he is being told about rates because he lacks the necessary information to use as leverage for sealing better deals. Thus, he ends up accepting terms and conditions that are unilaterally established by the stronger party.

Of course there are many market giants who pay very well and are excluded from the above critique. But these giants are also highly specialized and quality oriented companies. There are two kinds of market giants: those who sell translation as a commodity good and those who sell translation as a specialty service. Similarly, there are two rational choices for translators who wish to earn higher incomes: i. to work directly with the market giants who sell translation as a specialty service, while avoiding intermediaries or commodity selling companies, and ii. to aim at end clients. The second choice is harder, but perfectly feasible. In my next post I will analyze the numbers supporting these choices.

Translation Rates and The Matrix

neo marty

I was recently contacted for a job by someone I deeply respect and with whom I genuinely enjoy working. I consider this person to be a great translator and a very intelligent human being, which is why something she said in our e-mail exchange really caught my attention, “you know that translation rates are dropping, right?” Actually, I don’t know that, because mine are rising.

If you think translation rates are dropping, there is a chance you are stuck in the Matrix. You are being fed an alternate reality from the outside by those who benefit from keeping you plugged in. Let’s take a quick look at the numbers and see how deep the rabbit-hole goes, shall we?

According to some sources (like the Common Sense Advisory Report), translation is a US$ 34 billion a year market with a 12.17% average yearly GROWTH that is expected to hit US$ 37 billion in 2018. In 2011, Mission Essential Personnel, which was rated #1 in the top 100 language companies, reported over US$ 725 million in revenue; while on the opposite end of that top 100, Intrawelt, reported US$ 4.18 million. Companies in the middle, like Global LT Inc., reported between US$ 12 and 14 million.

So, where’s all this money going and why are freelancers convinced that prices are dropping? Well, it seems translation is an incredibly fragmented market, where about US$ 4 billion goes to the top 50 language service providers, while the rest is scattered among all sorts of companies, 70% of which have five or less employees. This means, at least, four things:

1) There’s a lot supply, which affects rates. The amount of supply in certain market segments is decreasing prices, but only in those segments. This is basic Economics that I have explained in this blog here and here.

2) There’s also a lot of demand, especially, in higher paying segments. These higher-paying segments are highly specialized though, which is why supply is low and rates are high. That’s how I managed to increase my rates, for example, after Law School (more about that to come).

3) There are a lot of intermediaries between industry leaders and freelancers.

4) There’s a lot of money that’s not being absorbed by the business giants.

Items 2 and 4 above are your ticket out of the Matrix. I will address them in two upcoming posts.