I am starting up a company to develop language learning material for
self-study online, and need to know basic figures about the market in
order to get a bank loan or funds from potential investors.

I am targeting specifically the English-speaking market, worldwide
(but especially USA/Canada and the UK), but if there is sufficient
demand, I will look at developing English language courses for
Japanese or Spanish speakers, say.

The question is: What is the size of the language learning market in £/$ terms?

1) In it's entirety - i.e. incl. courses at colleges & universities,
immersion courses, as well as books aimed at language learners, and
self-study courses (CD-ROMs, tapes/CDs, etc.)?

2) Specifically as it relates to self-study material (whether online
or via CD-ROMs, books & tapes, etc.)?

3) Who are the major players in the market (such as Linguaphone, BBC,
Pimsleur, Linkword, Eurotalk, Routledge, Pearsons, etc.) and what are
their respective market shares (and revenues)?

4) Although not essential, it would also help to have some kind of
breakdown of the people who buy language courses, and where they are
spending their money. By analyzing queries on the search engines, I
managed to find that 2000 people a month search for "learn Hebrew",
65000 for "learn Spanish", 60000 for "learn German", 90000 for "learn
Japanese", etc. but I don't know who or where they are. I presume that
these are English-speaking people, predominantly from the States. More
importantly, I'm trying to find out what self-study courses they are
buying (and how much is being spent), or whether they attend classes
or immersion centres instead.

I also hope to target schools and language faculties, to develop
complementary material that could be used for self-study or to
simplify & speed up the class-based courses.

Please provide sources to back up the information, so that I can quote
this in the business plan. If the cost is likely to be high then
preliminary results will be okay until I get some funding, in which
case I will be willing and able to pay for more extensive research.

I hope that you'll be able to help - without costing me a fortune :) 

Many thanks in advance for your efforts.

Kind regards,

PS If it helps, here is what I've come up with so far in my own Internet
searches:

In Japan, the market for foreign language learning is worth
c.£800m/$500m, source: www.jetro.go.jp/ec/e/market/jmr/045/045.pdf

I used overture.com to analyze queries in the search engines. I hope
to develop material for English to Hebrew (1) Spanish (20),
German(20), French (10), Japanese (30), Italian (5), Chinese (3),
Arabic (2), Russian (1), Portuguese (1), Urdu (1) and Greek (1). I
used Hebrew as having a popularity of 1 (equivalent to 2000 queries for
"learn Hebrew" a month). The number in parentheses refers to the
relative popularity, e.g. Spanish and German are both 20 times more popular than
Hebrew. (I found this odd as there
are many more people speaking Spanish in the world than Germans, and
in more countries, so one would expect Spanish to be the most
popular language.)

I tried to work out a market value from taking all these 12 languages,
assuming each person who searches the Internet will probably spend and
average of, say $100, on courses, books, material. The total number of
searches are 200,000x12 (2.4m) p.a., multiplied by $100, makes the
market (for Internet users) worth $240m. This doesn't tally with the
value of the market for Japan alone. Either people spend a lot more on
languages on average (unlikely), or the Internet users are a
relatively small percentage. Howere, the figure for Internet
connectivity is 60% in the USA
[source:http://www.nua.ie/surveys/how_many_online/n_america.html], 60%
in the UK [source: http://news.bbc.co.uk/1/hi/technology/3121950.stm],
and 40% in New Zealand [source:
http://www.stats.govt.nz/domino/external/web/SchoolsCorner.nsf/htmldocs/Who+has+access+to+the+Internet].

In trying to work out the languages of choice, I thought that Spanish
would be  as it is the most widely spoken language after English. In
particular, the Spanish-speaking population in the USA is expanding at
a phenomenal rate, by 60% between 1990 and 2000 to 22m. USA will soon
be the second largest Spanish-speaking country in the world. This
means that English-speaking Americans are increasingly motivated to
learn Spanish, for business or personal reasons. Worldwide, there are
approximately 300m Spanish-speaking people, living in 23 countries. It
makes sense that the most popular language English speakers would wish
to learn would be Spanish. I am still researching the travel market to
determine the number of English speakers visiting Spanish-speaking
countries. However, as an indication, 55m tourists visit Spain every
year. The case for developing an English course for Spanish speakers
is equally compelling.

The market for learning Hebrew is highly defined, approximately 13m
Jews worldwide, of which nearly 6m are in the USA, 5m in Israel (of
which perhaps a few hundred thousand newcomers need to learn Hebrew),
600,000 in France, 1m in former USSR, and 700,000 in English-speaking
countries. [Demographics from the Jewish Databank.] Jews are
particularly motivated to learn Hebrew as it is part of their cultural
heritage and forms part of their religious upbringing. Nevertheless,
except for devout Jews, most Jews living in the Diaspora have a poor
command of the language. Jews are also traditionally quite well off
and devoted to education and learning. According to recent demographic
surveys (e.g. NJPS North American Jewish Databank), fewer than half
(45%) of all American Jews could read no Hebrew at all, a third (31%)
could sound the words out slowly, and a quarter (24%) could read
Hebrew fluently. This implies, by extrapolation, that there are c.1.3m
Jewish households with no knowledge of Hebrew at all, a significant
proportion of which may have little interest in Hebrew or Jewish
affairs. However, the  remaining 0.9m households are likely to have a
strong desire to improve their linguistic abilities and this will be
our prime market for beginner to intermediate stage courses. In
Britain, there are only ¼m Jews, the majority of whom are concentrated
in London, but these are easily reached via the main newspapers,
Jewish.Chronicle and London Jewish News, and via the synagogues (all
of whom run Hebrew classes for children and adults) and the Jewish
Agency.

<Size of the global market.

There are conflicting figures for the market for learning foreign languages. 

According to rising wave, the worldwide market for learning foreign
languages is currently worth $40 billion.
http://www.risingwave.net/busplan.html

According to Linguaphone the global market for learning languages is
$15 billion. The market for learning English is estimated to be worth
$20 billion.
http://www.hltcentral.org/page-1068.0.shtml

According to this report the language learning market accounts for
one-fifth of the educational market.
http://www.infj.ulst.ac.uk/~recall/deliver/d5.html#RTFToC4

The English instruction market is worth $50 billion.
http://www.arcadiapartners.com/principals.php3?handle=alldetails

Japan
Market for language learning products is 150 billion Yen.
http://www.tradepartners.gov.uk/education/japan/profile/overview.shtml

According to IDC, the worldwide corporate market for elearning will
grow from $6.6 billion in 2002 to $23.7 billion in 2006.
http://www.crm2day.com/news/crm/EpuFEFlllpWIMRrZpT.php>

--------------------------------------------------------------------------------
Self study.

The UK market for self study
The UK market for self study learning materials including books, CD?s,
CD-ROMS and videos is worth £16 million.
A survey by Eurobarometer found that only 30% of UK adults interviewed
believed that the availability of language courses was good in their
area. There is a high drop out rate for conventional courses and a
high number of people who opt for self study give up after a short
time. An informal snapshot of adult education centres found great
demand for learning Spanish. A profile is also given of the learners
that sign up to elearning classes and the times that they choose to
study, reasons for dropping out.
 http://www.nuffieldfoundation.org/filelibrary/pdf/e-languages.pdf

The U.S. Market for self study.
Despite a large search, there appears no breakdown for the US market
available online. However an alternative method for calculating the
U.S market is to calculate average spending per person in the UK
market and multiply it by the U.S. population. UK population is 58.7
million (2001 census). Per capita spending on self study language
products is £0.2725. US population ? 283 million in 2001. The
estimated market for self study aids in the U.S. is therefore £77
million or $130 million.

The size of the language software market can be estimated from the
market share of Topics Entertainment and its revenue (see below). They
have a 45% share of the market and anticipate revenue of $40 million
for 2002. This gives a rough figure of $88 million for the total
market.

------------------------------------------------------------------------------
Other markets.
The corporate market in the U.S.
In the U.S. in 1999 $15 million was spent by companies on outside
training. 28% is spent on foreign language training. 14% of training
is done by computer. The corporate sector for learning languages
online in 1999 was therefore worth $0.58 million. 
http://www.learnativity.com/stats.html

China
According to Lingo Media, China is the largest market for programs
that teach English as a Foreign Language. There are currently 200
million Chinese children and adults studying English.
http://216.239.59.104/search?q=cache:yUkIfRFUThQJ:www.lingomedia.com/pdf/brochure.pdf+%22language+learning+materials%22+billion+market&hl=en&ie=UTF-8


USA
According to the Modern Languages Association, 1.4 million people
enrolled for foreign language courses last fall. This is a rise of
17.9%. Spanish accounts for 53% of enrolments. Enrolments in German
are decreasing.
http://www.badgerherald.com/vnews/display.v/ART/2003/11/18/3fb9884571058

Detailed figures for enrolments in 1998 for all languages are
available on the associations website.
http://www.adfl.org/resources/enroll.htm

Enrolment figures for Italian, Spanish, French and German. This site
details how many high school, college and university enrolments there
were for these languages in 2000 and compares the figures to 1994.
Italian has seen a 46% increase in popularity.
http://66.102.11.104/search?q=cache:0djNFdFI_zAJ:www.osia.org/public/culture/Italian_Lang_Study_2002.pdf+%22modern+language+association%22+%22enrolled+in%22&hl=en&ie=UTF-8

The European market.
According to the BBC, 1.5 million people in the UK have learnt a new
language in the last two years and a further 8 million express a
desire to learn a language.
http://www.languageadvantage.com/news/specialnovember2000.htm


A study by the European Union found that there is a shortage of
language learning materials for adult language learners. The shortage
is particularly acute for vocational language learners.
http://216.239.59.104/search?q=cache:0edV5SC_WVoJ:europa.eu.int/comm/education/socrates/downfile/lingua_en.pdf+uk+market+%22+language+learning%22&hl=en&ie=UTF-8

This report analyses the UK market and identifies the languages where
there is a shortage of learning products to meet the demand. (Note
several pages are missing from the report and you need to scroll down
past these to find this information.) The Nuffield Languages Inquiry
Report 2000 found a dramatic increase in the popularity of Spanish and
Italian and a decline in French and German.
http://europa.eu.int/comm/education/policies/lang/languages/download/uk.pdf

There are also reports available for the other countries of the European Union at
http://europa.eu.int/comm/education/policies/lang/languages/download/survey_en.html

According to a study by the Department of Trade and Industry, 21
percent of British firms had lost business due to lack of linguistic
skills. http://216.239.59.104/search?q=cache:sFb2ycu4A68J:www3.open.ac.uk/events/200212_56070_nr.doc+language+british++lost+%22trade+and+industry+study%22&hl=en&ie=UTF-8



-------------------------------------------------------------------------------
Major players.
Comparing the market share for each of the major players is not easy
as they tend to each have different definitions of the market that
they are competing in. For example Linguaphone claims to be the number
one provider of self study language courses in the world. Whereas the
BBC claims to be number one in the UK market for adult language
learning.

International web-based language learning on the internet.
This is a survey of what is currently available on the internet for
learning European languages. The survey found that truly web-based
language courses are rare. Free grammars, dictionaries, audio files
and interactive learning games are common. There are few serious
providers. This site gives details of  the major providers for each
language and links to their sites.
http://europa.eu.int/comm/education/policies/lang/languages/download/web.pdf

Berlitz
World?s largest language education company.
6.1 million lessons in 2002.
http://www.benesse.co.jp/IR/english/pdf/annual/2003/ar2003e_0704.pdf
http://216.239.59.104/search?q=cache:VEwdFBRXxKAJ:www.benesse.co.jp/IR/english/pdf/annual/2003/ar2003e_0704.pdf+%22berlitz%22+sales+2002+language&hl=en&ie=UTF-8
2002 sales 258,259 million Yen. $2,368 million.
http://216.239.59.104/search?q=cache:lXq7h5mnRlUJ:www.benesse.co.jp/IR/english/pdf/annual/2003/ar2003e.pdf+berlitz+%22annual+report%22&hl=en&ie=UTF-8

2001 sales
http://www.benesse.co.jp/IR/english/pdf/other/fy2000_3.pdf

Berlitz home page
http://www.berlitz.com/NR/exeres/610A2F5C-B170-4425-9BAC-98E0E1E5598B.htm?ISO=en
-----------------------------------------------------------------------------------------------------
McGraw-Hill
The largest provider of educational materials in the U.S.
Company report
http://www.compustat.com/www/pages/PressReleases/McGrawHill-2nd-qrt-2003.pdf

McGraw-Hill ? annual report 2002.
http://www.mcgraw-hill.com/about/annual.html
----------------------------------------------------------------------------------------------------------
Pimsleur ? Division of Simon & Schuster Inc.
Over 1 million people use this system each year. Estimated revenue in
excess of $30 million.
http://www.simonsays.com/about_us.cfm
-------------------------------------------------------------------------------------------------------------
Rosetta stone
4 million users in 55 countries.
http://www.919marketing.com/sections/about919/subsections/news_articles/accountwins/accountwins_07.html
-----------------------------------------------------------------------------------------------------------
Eurotalk
Sales - £2 million
http://news.bbc.co.uk/1/hi/programmes/working_lunch/2291707.stm
Home page
http://www.eurotalk.co.uk/
------------------------------------------------------------------------------------------------------
BBC worldwide learning.
Sales of learning products over £100 million.
http://db.bbc.co.uk/pressoffice/commercial/worldwidestories/pressreleases/2002/02_february/childrens_marketing_campaign.shtml
Market leader in the adult education sector for foreign language
learning in the UK.
http://www.bbcworldwide.com/aboutus/corpinfo/annualreps/annualreport2002/product/learningprint.html
Annual report
http://www.bbcworldwide.com/aboutus/corpinfo/annualreps/annualreport2003/product_learning_02.html
Annual report
http://www.bbc.co.uk/info/report2003/
---------------------------------------------------------------------------------------------------
Linguaphone
http://www.epic.co.uk/company_news/archive/2000/291100_2.htm

Turnover -£20 million
http://216.239.59.104/search?q=cache:Kec9JpMVnUoJ:www.chelverton.com/download/NBradburyCV2003.doc+%22linguaphone+group%22+turnover+2002&hl=en&ie=UTF-8

-----------------------------------------------------------------------------------------------------------
Software companies.

The learning company
Number one market share in the U.S. in the education sector.
1999 revenues $750 million.
http://www.gores.com/archive_13.html

Division of Riverdeep. Financial results for second quarter 2003 available at 
http://www.riverdeep.net/about_us/press_releases.jhtml#
1998 sales $30 million
http://www.fool.com/DDouble/1997/DDouble971107.htm

http://www.broderbund.com/welcome.asp
http://www.peterborough.co.uk/bytes/


-------------------------------------------------------------------------------------------------------
Transparent Language
The leading language software provider in the U.S. with over 45% market share.
http://www.transparentlanguage.com/company_info/press_release.cfm?prid=34
Transparent language ? 53% market share in 2001.
http://216.239.59.104/search?q=cache:8__TuLaIyrEJ:usaic.hua.army.mil/112bde/aics/aics%2520web/language%2520stuf/LanguagePro%2520for%2520Enduring%2520Freedom.ppt+%22transparent+language%22+%22market+share%22&hl=en&ie=UTF-8

Ranked number one language education publisher in the U.S.
http://www.transparentlanguage.com/company_info/press_release.cfm?prid=26

Seventh largest educational software publisher in the U.S.
http://www.transparentlanguage.com/company_info/press_release.cfm?prid=13

About Transparent Language.
Developers of language software.
http://www.transparentlanguage.com/company_info/info_comp_bg.htm

Transparent language has over 400,000 users worldwide including over
10,000 schools and colleges.
http://www.premiumchat.com/press_switch.asp?article=transparent


------------------------------------------------------------------------------------------------------------
In 2001 Topics Entertainment was the number one maker of language
software with 45.5% market share. Transparent Language was number 2
with 23.1% market share.
http://seattlepi.nwsource.com/business/41958_topics09.shtml

Topics entertainment 
About.
http://www.topics-ent.com/aboutus.asp

Topics Entertainment 
Revenue details from 1998 to 2001. 
http://seattle.bizjournals.com/seattle/stories/2001/10/22/focus8.html

Topics Entertainment
Revenue details 2001 ($21 million) and 2002 ($40 million).
Their language courses sell 50,000 copies a month.
http://www.kingcountyjournal.com/sited/story/html/109941


----------------------------------------------------------------------------------------------------------

Additional information.



Top selling language software.
According to NPD Intelect, the top selling educational language
software January 20-26, 2002 are as follows.
Learn to Speak Spanish 8.1, The Learning Company $18
Spanish Now 8.0, Transparent Language $27
Instant Immersion Spanish, Topics Entertainment $20
http://www.intelectmt.com/corp/intelectmt/press/press-it/press_020207.htm


Demographics of Spanish learners.
Around 25% of students are Hispanics who did not learn Spanish when
growing up. Most are in their 40?s and 50?s and enrol in beginners and
intermediate classes. Spanish courses are popular with medical,
educational and social service professionals.
http://66.102.11.104/search?q=cache:baSAdB--CJoJ:www.latinoreporterdigital.org/2003/print/0626lr00701.pdf+%22are+learning+spanish%22+million&hl=en&ie=UTF-8


Detailed report about language learning in Europe with details of
number of institutions, languages learnt, prices of language learning
CD Rom?s
http://www.infj.ulst.ac.uk/~recall/deliver/d5.html

The elearning markets.
http://www.theenglishplace.co.uk/marketing_language.html

31% of elementary schools are offering foreign language instruction.
Due to a shorter of teachers and budget cuts schools are increasingly
using video-based and distance learning programs.
http://www.cal.org/front/news/rhodes-pufahl.html

Adult education market comprises 15 million adults.
http://www.nowinternational.com/footnotes/laarticle.htm

The language advantage survey.
http://www.personnelzone.com/WebSite/webwatch.nsf/0/87c0ab7494b4b6a680256b13005717e6?OpenDocument

English language learning market.
http://www.ellis.com/company/ir/marketinfo.php>


<Additional links:>

<Instituto Cervantes>
<http://www.cervantes.org/index.html?lang=eng>

<Foreign languages in non-university education.>
<http://www.bm30.es/plan/stat/prs1_uk.html>

<Nuffield report on languages.>
<http://www.nuffieldfoundation.org/filelibrary/pdf/languages_finalreport.pdf>

<Modern language association.>
<http://www.daily.umn.edu/daily/1999/10/18/news/new5/>

<Modern language association.>
<http://www.mla.org/homepage>

<Language learning in distance education.>
<http://assets.cambridge.org/052181541X/sample/052181541XWS.pdf>

<The National Centre for Languages>
<http://www.cilt.org.uk/publications/bulletins/index.htm>


<Search strategy:>

I searched for many short phrases including:

<"language learning market">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22language+learning+market%22>

<"language learning market" billion>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22language+learning+market%22+billion>

<"language learning market" million>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22language+learning+market%22+million>

<"language learning" spending>
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22language+learning%22+spending>

<"leading provider" "language learning materials">
<://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22leading+provider%22+%22language+learning+materials%22>

<Hope this helps.>

---

Request for Answer Clarification by rll-ga on 25 Nov 2003 07:45 PST

Hi Belinda,

Many thanks for your very comprehensive reply. As you say, there do
seem to be conflicting figures. My greatest concern is that huge
disparity between the estimate of the UK self study market (£16m) with
the Japanese value (150bn Yen) and Merill Lynch's estimate of $50bn
worldwide. If you extrapolate the value of self-study material in the
UK, the global figures should be in the region of £100m-£120m. A far
cry from $50bn.

I was also puzzled by Pimsleur's claim to have revenues of $30m and
Transparent Language having a 53% share of the market (when a D&B
report states that their latest revenues were $3m). Could the $30m
refer to the entire Simon & Schuster group? And Transparent Language's
53% is a share of what? A related query is whether the "major players"
are major only because of all their operations combined, or whether
they have the lion's share of the language learning market between
them? You state on occasion that the figures refer to "educational"
products, but how much of this is specific to language learning as
opposed to the much larger market of education in general?

I hope you will be able to clarify these issues satisfactorily. I
appreciate the work you've done so far, but I am still not much closer
to having an accurate understanding of the language learning sector.

The reason why this is important is that I am making sales forecasts
based on these figures. It doesn't take much for a small company to
reach sales of a few million £/$. But if the global market is in the
region of £100m then that is a significant share of the market when
compared with the major players, who have massive marketing and R&D
resources behind them.

Many thanks in advance for your kind efforts.

All the best,

Gary Orman

---

Clarification of Answer by belindalevez-ga on 26 Nov 2003 05:39 PST

<I have looked at the figures in more detail and can offer the
following interpretations that may help you to calculate your market.

I think the reason for the discrepancy in the figures is that the
figure of $50 billion is for entire language learning market. This
probably includes English learning as a foreign language and the
schools market for children.

The UK figure is just for materials (books, cd?s and videos) for adult
self learning of foreign languages. This will not for example include
formal courses at language schools or other institutions.

The Linguaphone figure of $15 billion is more likely to be a more
reliable indication of the self study market as this is the market
that they are competing in. Depending on what figures you take for the
proportion of learning English, up to half of the $15 billion could be
for English learning. This would cut the linguaphone figure to $7.5
billion for foreign language learning.

Revenue for the Simon & Schuster group was $648.7 million in 2001.
The $30 million figure for Pimsleur is an estimation based on one
million customers per year spending an average of $30 each.

The 53% market share is claim by Transparent Language appears to be in
the market for language software. However the figure from NPD Intelect
is probably more reliable. They claim that Transparent Language has a
23.1 percent market share of the language software market.
http://seattlepi.nwsource.com/business/41958_topics09.shtml

The major players appear to have the lions share of the schools and
beginners market. However as revealed by the European report there is
a shortage of material that is not being addressed by the major
players. They tend to concentrate on the lucrative schools market and
on beginners courses. This has resulted in a shortage of material in
certain sectors of the adult market that could be targeted by a new
entrant. http://216.239.59.104/search?q=cache:0edV5SC_WVoJ:europa.eu.int/comm/education/socrates/downfile/lingua_en.pdf+uk+market+%22+language+learning%22&hl=en&ie=UTF-8>