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Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Jotting it down: Digital recording systems will likely threaten demand for courtroom stenographers This report was provided to Seattle Pacific University (2134529962) by IBISWorld on 31 December 2019 in accordance with their license agreement with IBISWorld IBISWorld Industry Report OD5843 Stenographic Services in the US August 2019 Marisa Lifschutz About this Industry 14 International Trade Industry Definition 15 Business Locations Main Activities Similar Industries 17 Competitive Landscape 25 Industry Data Additional Resources 17 Market Share Concentration 25 Annual Change 17 Key Success Factors 25 Key Ratios Industry at a Glance 24 Industry Assistance 25 Key Statistics 17 Cost Structure Benchmarks 19 Basis of Competition Industry Performance 19 Barriers to Entry Executive Summary 20 Industry Globalization Key External Drivers Current Performance 21 Major Companies Industry Outlook 21 Veritext Legal Solutions 10 Industry Life Cycle 21 Planet Depos LLC 12 Products and Markets 22 Operating Conditions 12 Supply Chain 22 Capital Intensity 12 Products and Services 23 Technology and Systems 13 Demand Determinants 23 Revenue Volatility 13 Major Markets 24 Regulation and Policy 26 Jargon & Glossary www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM About this Industry Industry Definition This industry provides verbatim reporting and stenotype reporting of live legal proceedings and then transcribes Main Activities The primary activities of this industry are subsequent recorded materials Noncourt stenography services for depositions and related proceedings are included Stenotype recording Voice writing Taking depositions Closed captioning The major products and services in this industry are Additional services Local government stenographic services State government stenographic services Other stenographic services Similar Industries 54111 Law Firms in the US Establishments in this industry provide expertise on a range of areas or specific areas of law, such as criminal, corporate, family and estate, patent, real estate or tax 54193 Translation Services in the US Establishments in this industry translate written material, interpret speech from one language to another and provide sign language services 56141 Document Preparation Services in the US Establishments in this industry provide letter or resume writing; document editing or proofreading; typing, word processing or desktop publishing; transcription and other secretarial services 56143 Business Service Centers in the US Establishments in this industry provide photocopying, duplicating and other document copying services Additional Resources For additional information on this industry www.nad.org National Association of the Deaf www.ncra.org National Court Reporters Association www.uscra.org United States Court Reporters Association Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Stenographic Services in the US August 2019 Industry at a Glance Stenographic Services in 2019 Key Statistics Snapshot Revenue Annual Growth 14–19 Annual Growth 19–24 Profit Wages Businesses $2.7bn 2.7% 0.7% $336.1m $615.2m 4,494 Government consumption and investment Revenue vs employment growth There are no major players in this industry 10 % change % change Market Share -1 -5 -10 Year 11 -2 13 15 17 Revenue 19 21 23 -3 Year 25 13 15 17 19 21 23 25 Employment SOURCE: WWW.IBISWORLD.COM p 21 Products and services segmentation (2019) 5.5% Additional services Key External Drivers Government consumption and investment 27.0% Local government stenographic services Demand from law firms Private investment in computers and software 35.3% State government stenographic services Crime rate p 32.2% Other stenographic services Industry Structure Life Cycle Stage Regulation Level Medium Low Technology Change Medium Capital Intensity Low Barriers to Entry Low Industry Assistance High Industry Globalization Low Concentration Level Low Competition Level High Revenue Volatility Decline SOURCE: WWW.IBISWORLD.COM FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 25 Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance Executive Summary | Key External Drivers | Current Performance Industry Outlook | Life Cycle Stage Executive Summary Stenographers have played an important role in the courtroom process for centuries Stenographers attend legal proceedings and other public speaking events and create transcriptions Over the five years to 2019, demand for the Stenographic Services industry has been mixed as courts have increasingly cut back expenses amid massive budget cuts More courts have outfitted their courtrooms with digital recording systems, removing the need for in-person stenographers However, despite mounting external competition, an uptick More courts have outfitted their courtrooms with digital recording systems, removing the need for in-person stenographers in legal activity over the past five years is expected to support a moderate expansion for the industry As a result, IBISWorld only forecasts industry revenue to rise at an annualized rate of 2.7% to $2.7 billion over the five years to 2019 This includes an expected 1.5% boost in 2019 The industry is highly competitive and fragmented, exhibiting low market share concentration The industry relies heavily on labor for industry services and therefore does not benefit from economies of scale The industry’s low barriers to entry limit consolidation, and Key External Drivers Government consumption and investment Demand for stenographic services is heavily dependent on government expenditure, as stenographers are hired and paid for by local, state and federal courts As government expenditure decreases, courthouses have to reduce spending to balance their budgets In light of budget cuts, courts have increasingly online platforms that enable workers to act as nonemployers and easily reach contacts have further solidified such trends Larger companies have nonetheless lowered their dependency on labor through stenographic machines and related technology, leading industry wages to fall slightly as a share of revenue Falling relative labor costs have enabled a minor expansion in industry profit during the current period, with the average margin, measured as earnings before interest and taxes, reaching 12.2% of revenue in 2019 Over the five years to 2024, the industry will continue to endure challenges amid heightened competition and rapid technological change As federal and state courts struggle to balance their budgets in light of budget cuts, these markets will increasingly seek new cost-saving measurements More courts are consequently expected to move away from in-person stenographers toward digital recording systems, thus reducing demand for stenographers in the courtroom Demand from other opportunities outside of the courtroom, including providing closed captioning for TV programs and aiding students with hearing impairments, is expected to likewise decrease during the period Overall, IBISWorld estimates that industry revenue will rise a sluggish annualized 0.7% over the five years to 2024 to total $2.8 billion sought cost-saving methods, moving away from in-person stenographers toward digital recording systems, thus hampering industry demand Government consumption and investment is expected to rise moderately in 2019 Demand from law firms Demand for stenographic services is heavily dependent on legal activity Legal Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance activity can include lawsuits, criminal cases, intellectual property cases and civil cases Increased legal activity helps boost industry demand, as more courts require stenographers to record proceedings In addition, stenographers can take depositions for law firms Demand from legal services is expected to increase in 2019, representing a potential opportunity for the industry Private investment in computers and software Voice captioning technology has improved and limited demand for stenographic services in recent years Demand for industry services wanes as investment improves such software Private investment in computers and software is anticipated to rise in 2019 Crime rate An increase in the rate of reported crimes leads to higher demand for legal advice, increasing industry revenue as a result Throughout the past 20 years, the crime rate has declined, mainly because of the aging population The crime rate is expected to continue to decline in 2019, posing a potential threat to the industry Demand from law firms Government consumption and investment % change % change Key External Drivers continued -1 -2 -3 Year -1 -2 13 15 17 19 21 23 25 -3 Year 13 15 17 19 21 23 25 SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance Going digital The Stenographic Services industry has encountered a mixed operating environment over the five years to 2019 Demand for in-person stenographic services is largely dependent on government expenditure and legal activity, as stenographers are hired and paid by local, state and federal courts Stenographers attend legal proceedings and other public speaking events and create transcriptions, as well as provide closed captioning for individuals with hearing imparities Over the five years to 2019, industry demand has improved overall amid an uptick in legal activity and recovering state budgets However, demand conditions have been mixed as courts trimmed expenses by outfitting courtrooms with digital recording devices to replace the need for stenographers, reducing demand for in-person stenographic services in the courtroom Rising competition from these digital recording systems has hampered more robust industry growth However, despite challenging conditions over the past five years, an increasing level of legal activity has precipitated an expansion in demand for industry services As a result, over the five years to 2019, IBISWorld forecasts industry revenue to rise at an annualized rate of 2.7% to $2.7 billion, including a 1.5% boost in 2019 The proliferation of technology has continued to make big waves within the Stenographic Services industry Stenographers typically use stenograph machines, which have existed, mostly unchanged, since 1913 Technological advancements have equipped modern stenograph machines with memory cards that are capable of holding a full day’s work These new technological developments help improve the quality and efficiency of a stenographer’s work and yield more accurate results Nevertheless, over the past five years, industry operators have struggled to remain afloat as more courts have moved away from in-person stenographers toward digital recording systems Due to severe budget cuts, courts are seeking ways to implement cost-saving techniques Underfunded courts are increasingly looking into using audio and video recording in place of a court reporter for hearings According to the US Bureau of Labor Statistics, a salaried stenographer can cost the court more than $100,000 annually, with the median salary estimated at $55,120 Comparatively, the average cost of new mid-level audio and video equipment falls between $20,000 and $25,000 per courtroom, respectively Although digital recording systems are considered to yield significant cost savings in the long run, high reliance on these technologies poses some potential risks One strain associated with these systems includes the difficulty to monitor discussions in the courtroom For example, stenographers can let attorneys know when they talk over each other or stop witnesses to answer questions before Industry revenue 10 % change Current Performance -5 -10 Year 11 13 15 17 19 21 23 25 SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance Going digital continued the attorney is finished talking, whereas audio recordings are unable to interact Furthermore, glitches in digital systems may delay the workflow of courts and even increase operating costs For example, in Kentucky, where courts have used video recordings for more than 30 Industry landscape The Stenographic Services industry exhibits a relatively low level of market share concentration, with no singular operator accounting for above 5.0% of total revenue for the industry The industry is highly competitive and fragmented, primarily composed of small companies According to the US Census Bureau, more than 90.0% of industry operators employ fewer than 10 people Due to the high level of accuracy required when recording court cases, delivering quality and efficiency becomes crucial for industry operators to stand out from competitors Stenographers are required to receive a license and must be able to type at least 225 words per minute to transcribe legal proceedings Operators that successfully use voice-capture software and other web-based technologies to help improve accuracy and efficiency are able to gain a competitive advantage Although the industry exhibits relatively low barriers to entry, primarily in the form of minimal upfront capital requirements, the number of industry operators is expected to contract at an annualized rate of 0.6% to 4,494 years, a judge in Jefferson County had to rehear a murder case due to the malfunction of the court’s digital recording system However, stenographers can still be brought into a courtroom when an attorney requests one and pays for the service Industry operator exits have reduced internal competition independent businesses over the five years to 2019 Due to mounting competition and subdued demand for in-person stenographic services, industry operators have been consolidating or exiting the industry The remaining operators are leveraging technology to improve employee output and reduce wage costs Consequently, industry employment is expected to decline at an annualized rate of 0.3% during the same five-year period to reach 13,015 workers Industry operator exits have reduced internal competition and enabled industry operators to charge higher prices for services that cannot be replaced by technological substitutes Accelerated by decreasing wage costs, the average industry profit margin, measured as earnings before interest and taxes, is expected to improve marginally during the current period, reaching an estimated 12.2% of revenue in 2019 Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance Industry Outlook Over the five years to 2024, the Stenographic Services industry is anticipated to continue its expansionary trajectory, albeit at a decelerated pace The trends that have affected demand for industry services over the previous five years are expected to continue to shape the industry during the five-year outlook period Federal and state courts will likely find new ways to save on costs, including replacing in-person stenographers with digital recording Alternative markets In addition to courts’ subdued demand for stenographic services, stenographers will likely find reduced relief from outside markets Stenographers can provide real-time closed captioning for those with hearing imparities or take depositions for law firms or agencies Stenographers who work with deaf individuals and those with hearing imparities use communication access real-time translation (CART) to convert speech to text According to the National Association of the Deaf (NAD), CART services enable instant translation of spoken words into text by using a stenotype machine, computer or real-time software on a local or remote basis Stenographers accompany their clients to various events, physician’s appointments or any other place where their services are needed While applications such as Google voice-enabled translators have limited capabilities, their use for informal translations has limited industry demand Other stenographers are employed by high schools and college campuses and provide closed captioning of lectures to students with hearing imparities or those learning English as a second language Despite being a threat, new technological advancements can also enhance stenographers’ work, enabling them to work remotely over an internet or phone connection systems that consequently decrease demand for stenographers in the courtroom Additionally, an anticipated acceleration in the decline of the crime rate from the previous five-year period will likely reduce the amount of legal activity, hindering demand for the industry’s courtroom services As a result of these trends, IBISWorld forecasts industry revenue will grow at a slower rate, rising an estimated annualized 0.7% to total $2.8 billion Closed-captioning efforts are anticipated to facilitate demand for stenographic services Under federal laws, broadcasting and cable companies and other satellite TV service providers must provide closed captioning for all new English-language programs, without exception In some locations, closed captioning is also required for televised emergency messages The Federal Communications Commission reinforces closed captioning rules In addition, associations such as the NAD are making efforts to provide millions of hearing-impaired individuals with access to radio, one of the most popular forms of entertainment and communication For example, National Public Radio (NPR) has tested real-time captioning streamed over the internet for some of its programs In addition to making these captions accessible through the internet, NPR tested the use of HD radio technology to display the captions on specialized receivers, which could be used anywhere These efforts are anticipated to facilitate demand for stenographic services over the next five years Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance Industry landscape The Stenographic Services industry will likely continue to remain highly competitive and fragmented Over the five years to 2024, the number of industry operators is projected to stagnate as companies continue to consolidate their operations or exit the industry Overall, this trend will lead industry enterprises to total 4,492 independent operators by 2024 However, despite increasingly competitive conditions, industry employment is forecast to rise slightly during the five-year outlook period, increasing at an annualized rate of 0.4% during the period to total 13,278 workers While significant outside competition from technology is expected to persist, an overall uptick in industry services provided will An uptick in industry services provided will necessitate a small increase in the industry’s workforce necessitate a small increase in the industry’s workforce Meanwhile, the average industry profit margin, measured as earnings before interest and taxes, is anticipated to improve modestly over the five years to 2024 While demand conditions for the industry will remain mixed, consolidation of operations will enable a rise in the average industry profit margin, which is expected to reach 12.3% of annual revenue by 2024 Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 10 WWW.IBISWORLD.COM Industry Performance Life Cycle Stage Industry value added is contracting The number of industry operators is declining Substitute technologies are siphoning industry demand Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 14 WWW.IBISWORLD.COM Products & Markets Major Markets continued Major market segmentation (2019) 28.6% Local courts Total $2.7bn State courts 34.0% Other customers slow to switch to digital recordings Additionally, local courts are the most numerous out of local, state and federal courts Due to the high volume of local courts and the high salaries that local courts pay to stenographers, this segment’s share of revenue has nearly caught up to state courts within the past five years International Trade 37.4% SOURCE: WWW.IBISWORLD.COM Other customers Other customers for the industry include private law firms, nonprofit organizations and other companies that require court reporting and other litigation support services, such as closed captioning for recorded and live events Federal courts are also included within this segment and the most likely to need a stenographer to read back a transcription during a trial, as these cases tend to be high profile Digital recordings not have a feature to read back what was said in real time, therefore limiting technology substitutions in this segment As a service-based industry, the Stenographic Services industry does not participate in international trade, with industry operations being largely domestic However, as the industry is becoming more globalized, industry operators are increasingly offering their services in countries abroad Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 15 WWW.IBISWORLD.COM Products & Markets Business Locations 2019 West New England AK 0.2 Great Lakes WA ND MT 2.2 Rocky Mountains ID OR 0.9 West NV 1.7 2.0 SD 0.3 WY 0.5 MN 0.3 0.6 Plains 0.6 UT CO 1.6 12.2 OK 2.2 AZ NM 2.5 0.7 Southwest TX 5.6 0.6 NC 1.6 SC Southeast MS AL 1.0 0.6 TN AR WV VA 2.3 0.6 CA West 1.9 1.2 1.6 1.1 OH KY MO KS 1.7 1.7 2.6 IN 5.2 0.6 PA 2.5 IL 0.4 NY 5.1 MI 0.8 IA NE 0.2 WI ME MidAtlantic 1.3 GA 3.6 0.7 LA 2.9 FL 17.8 Establishments (%) HI 0.4 Less than 3% 3% to less than 10% 10% to less than 20% 20% or more Additional States (as marked on map) VT NH MA RI CT NJ DE MD 0.3 0.3 0.1 2.1 1.4 0.3 0.3 1.2 DC 0.5 SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 16 WWW.IBISWORLD.COM Products & Markets Distribution of establishments vs population 40 30 20 10 Southwest Southeast Plains New England Rocky Mountains Establishments Mid-Atlantic Great Lakes West Establishments for the Stenographic Services industry are located largely in line with population trends The industry is concentrated in the Southeast, MidAtlantic and Western regions of the United States, the three regions with the highest concentrations of the national population Stenographers are also located in close proximity to law firms and courtrooms as these are the primary industries that stenographers work with The Southeast region accounts for an estimated 33.9% of industry establishments Within the region, Florida alone is home to 17.8% total industry establishments The Southeast is the most heavily concentrated region for this industry as it is also home to a significant proportion of law firms This region additionally accounts for the greatest proportion of the US population at 25.7% of the total The West region is the second-most concentrated region of industry activity, accounting for 17.6% of industry establishments California is the most population-dense state in this region and is expected to account for 12.2% of total establishments There is a large concentration of corporate clients located in this region, especially healthcare and technology companies; these businesses often require legal services for intellectual property and copyright concerns, in turn requiring stenographers to record the court cases % Business Locations Population SOURCE: WWW.IBISWORLD.COM The Mid-Atlantic region is also home to a significant concentration of industry establishments, accounting for an estimated 11.7% of industry establishments New York and Washington, DC are both home to high percentages of law firms due to the financial sector being based in New York and the federal court cases in Washington, DC requiring a high amount of law firms As a result of the heavy court activity in this region, the Mid-Atlantic provides favorable demand conditions for stenographers located there, leading to its high share of industry establishments Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Stenographic Services in the US August 2019 17 Competitive Landscape Market Share Concentration | Key Success Factors | Cost Structure Benchmarks Basis of Competition | Barriers to Entry | Industry Globalization Market Share Concentration Level Concentration in this industry is L ow Key Success Factors IBISWorld identifies 250 Key Success Factors for a business The most important for this industry are: Cost Structure Benchmarks Market share concentration in the Stenographic Services industry is low, as no industry operator accounts for a notable share of industry revenue Indeed, in 2019, the top two industry companies are expected to collectively control just 2.0% of annual revenue for the industry This industry is highly fragmented and is composed of predominantly small companies, with over 90.0% of industry operators employing fewer than 10 workers This is in line with other service-based industries, which are typically fragmented because operators have low purchase costs and not benefit from economies of scale Market share concentration for the industry is anticipated to remain low over the next five years Access to highly skilled workforce This industry requires highly skilled stenographers who are able to pass a rigorous certification process Prompt delivery to market Stenographers are expected to have prompt and efficient services Industry operators are also expected to produce transcripts on demand to their clients Access to the latest available and most efficient technology and techniques Stenographers need to be efficient when transcribing court cases Industry operators need to have access to the latest technology and techniques to aid in these transcriptions The following discussion represents the cost structure of an average operator in the Stenographic Services industry Wages As a service-based industry, the industry is highly labor intensive, with wages representing an expected 22.7% of annual revenue in 2019 Despite increasing use of technology over the past five years, the industry remains highly labor intensive; this is unlikely to change soon The cost of labor for this industry far outweighs the cost of capital because stenographers primarily require a stenograph machine, which is relatively inexpensive Over the past five years, wages as a share of revenue have declined marginally in light of increasing use of digital recording services Having a good reputation This industry is highly competitive due to how fragmented the market is Due to the high competition it is important for industry operators to have a good reputation to gain market share Purchases Purchases are expected to account for 30.7% of annual revenue for the industry in 2019 Although the industry is primarily service-based, industry operators require equipment such as stenograph machines, cases, ribbon and ink; paper trays; chargers and adapters; key cushions and ergonomic wrist supports to assist with providing stenographic services Additionally, industry stenographers use audio recording devices to double check the accuracy of their transcriptions However, such devices are typically purchased by the courts and are installed in the courtrooms; industry operators not have to purchase these devices Over the past five years, industry purchase costs have risen slightly as a share of annual revenue Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Stenographic Services in the US August 2019 18 Competitive Landscape Profit IBISWorld estimates that operating profit, measured by earnings before interest and taxes, accounts for 12.2% of annual revenue for the Stenographic Services industry in 2019 The industry has a large number of small players due to its relatively low barriers to entry The fragmented nature of the industry increases price competition, which ultimately hampers profit growth Nonetheless, recent company exits have reduced internal competition for remaining industry operators Consequently, industry margins have been able to improve modestly over the past five years, up from 12.1% in 2014 Depreciation Significant expenses include the lease or depreciation of equipment such as computers and office-related software IBISWorld estimates that depreciation expenses represent 1.4% of industry revenue in 2019 Marketing Marketing costs are relatively minor for industry operators, accounting for an anticipated 2.4% of annual industry revenue Rent Rental costs consume an anticipated 5.9% of annual industry revenue This category includes any office spaces leased by industry stenographers Utilities Utilities costs are relatively low for the industry, accounting for an estimated 2.3% of annual revenue in 2019 Other Additionally, industry operators incur a variety of other expenses related to the Sector vs Industry Costs Average Costs of all Industries in sector (2019) 100 Industry Costs (2019) 6.9 12.2 80 Percentage of revenue Cost Structure Benchmarks continued 22.7 52.9 n Profit n Wages n Purchases n Depreciation n Marketing n Rent & Utilities n Other 60 30.7 40 20 1.1 15.2 1.8 2.3 19.8 1.4 2.4 8.2 22.4 SOURCE: WWW.IBISWORLD.COM Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Stenographic Services in the US August 2019 19 Competitive Landscape Cost Structure Benchmarks continued day-to-day costs of running a business These costs include legal, administrative and insurance expenses Communication costs in terms of telephones and high- speed broadband access can also be significant Overall, this category is anticipated to represent the remaining 36.0% of revenue in 2019 Basis of Competition The Stenographic Services industry exhibits a high level of competition The market for industry services is highly fragmented and digital recording is increasingly cutting into industry demand The majority of industry operators are small companies that serve local or state courtrooms competitive advantage by using voicerecognition software and other webbased technologies to help improve the stenographer’s accuracy and efficiency Level & Trend ompetition C in this industry is Highand the trend is I ncreasing Internal competition With each industry operator accounting for a relatively negligible share of total industry revenue, competition is high among companies trying to enter the saturated and declining market Industry competition is primarily based on quality and efficiency, as it is extremely important for court cases to be recorded accurately Stenographers are required to be licensed and must have the ability to write at least 225 words per minute to be permitted to transcribe legal proceedings Some companies are able to gain a Barriers to Entry Level & Trend arriers to Entry B in this industry are Lowand S teady The Stenographic Services industry is characterized by low barriers to entry due to the relatively minimal upfront capital costs required to operate in this market The industry’s low level of capital intensity makes it comparatively easy for companies to enter the industry as there is no large initial investment The primary capital required for industry operators are stenograph machines, which are relatively inexpensive compared with a stenographer’s salary These machines are easily portable and not require much space for storing; additionally, these machines not change often, enabling an operator to continue using the same External competition Over the past five years, stenographers have experienced increasing competition from audio and video recording services With stagnant state and local government funding, audio and video recordings are increasingly being placed into courtrooms to reduce the need for stenographers in an effort to cut costs Consequently, the increasing level of digital recording in courtrooms is siphoning revenue away from industry operators However, courts still rely on stenographers for felony and high-profile cases to be able to have the stenographer read back what was said in real time and ensure quality, a function currently not available with digital recordings Barriers to Entry checklist Competition Concentration Life Cycle Stage Capital Intensity Technology Change Regulation and Policy Industry Assistance High Low Decline Low Medium Medium High SOURCE: WWW.IBISWORLD.COM stenograph machine for multiple years, keeping costs low Labor is the largest expense for this industry The main barrier to entry for Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Stenographic Services in the US August 2019 20 Competitive Landscape Barriers to Entry continued industry operators is securing skilled and certified court reporters Court reporters must be licensed in their state and able to type a minimum of 225 words per minute in order to record legal proceedings Additionally, federal courts require stenographers to have completed a training program credited by the National Court Reporters Association The high level of skill required to become a stenographer can pose a potential barrier for new entrants Industry Globalization Globalization in the Stenographic Services industry is low because the majority of industry operators only serve local courts However, industry operators are increasingly expanding their operations overseas to record international court cases For example, industry player Planet Depos LLC maintains operations globally throughout the Americas, Europe, the Middle East and Asia-Pacific regions Improving global telecommunications has made it easier for stenographers to operate internationally, increasing the industry’s level of globalization Level & Trend lobalization G in this industry is Lowand the trend is I ncreasing Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 21 WWW.IBISWORLD.COM Major Companies There are no Major Players in this industry | Other Companies Other Companies The Stenographic Services industry is highly fragmented, with no industry operator accounting for more than 5.0% of industry revenue Furthermore, an estimated 86.1% of establishments in this industry employ fewer than four workers, while less than 6.0% of industry operators have more than 10 employees Due to the small size of industry operators, there are no major players in this industry; however, there are a handful of companies operating on a national scale that manage to generate a small portion of industry revenue Other Company Performance Veritext Legal Solutions (Veritext) is a leading provider of deposition and litigation support services The company provides a range of services including court reporting services, deposition services, exhibition management services, client support, video technologies, training programs and privacy and data protection services The company also offers a suite of online and mobile management tools, such as case management and support and online scheduling Veritext operates 52 brick-and-mortar offices nationwide, as well as several affiliate locations In 2019, the company is expected to control just over 1.0% of annual industry revenue Planet Depos LLC (Planet Depos) is a global provider of court reporting, interpretation and trial services Headquartered in Washington, DC, the company operates over 50 offices worldwide, with locations across North, Central and South America; Europe; Asia and the South Pacific; Africa and the Middle East Additionally, Planet Depos maintains more than 1,000 court reporters and has serviced more than 55,000 clients The company provides domestic court reporting, videography, videoconferencing, interpretation and trial support services through its 40 US office locations In 2019, Planet Depos is expected to account for less than 1.0% of annual revenue for the industry Veritext Legal Solutions Market Share: 1.1% Other Company Performance Planet Depos LLC Market Share: 0.9% Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 22 WWW.IBISWORLD.COM Operating Conditions Capital Intensity | Technology & Systems | Revenue Volatility Regulation & Policy | Industry Assistance Capital Intensity Level The level of capital intensity is L ow Capital intensity in the Stenographic Services industry is low IBISWorld estimates that for every $1.00 spent on wages, industry operators will allocate $0.06 toward capital investment As a service-based industry, the cost of labor for this industry far outweighs the cost of capital; stenographers primarily only require a stenograph machine, which is relatively inexpensive The industry’s low level of capital intensity enables small players and nonemployers to enter this industry with relatively minimal start-up costs The use of technology, such as the increasing use of audio recordings, has increased within this industry over the past five years Stenographers use Capital Intensity Capital units per labor unit 0.5 0.4 0.3 0.2 0.1 0.0 Economy Administration, Stenographic Business Support and Services Waste Mgmt Services Dotted line shows a high level of capital intensity SOURCE: WWW.IBISWORLD.COM audio recordings to double check the accuracy of their transcriptions However, the digital recording devices Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 23 WWW.IBISWORLD.COM Operating Conditions Capital Intensity continued are typically purchased by the courts and are installed in the courtrooms Industry operators not have to purchase these devices, thus keeping the industry’s level of capital intensity low Technology and Systems Court reporters typically use a stenograph machine, which have existed without major changes since 1913 The most significant difference is that modern machines have memory cards to hold a full day’s work Stenograph machines are similar to keyboards, but only have 22 keys to make it easier for court reporters to type at the same speed as speech The industry’s use of technology has increased over the past five years Courtrooms in the United States are increasingly being outfitted with audio and video equipment to record the events of a court case Stenographers will sometimes use audio recordings to double check their transcriptions to ensure accuracy However, many courts are using audio and video recordings instead of a court reporter as a way to cut costs and save money Digital recordings are currently being increasingly used for misdemeanors, while felony cases still use the services of a stenographer The Stenographic Services industry has exhibited a low level of revenue volatility over the five years to 2019 Changes in government expenditure and legal activity largely affect demand for industry services A decrease in government expenditure will prompt court houses to trim their expenses to balance their budgets, thus replacing in-person stenographic services with digital recording systems In addition, changes in legal activity and the crime rate also affect demand for stenographic services Overall, changes in government expenditure and legal activity have exhibited some volatility over the past five years, leading industry revenue to fluctuate modestly Level The level of technology change is M edium Revenue Volatility Level The level of volatility is L ow Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 24 WWW.IBISWORLD.COM Operating Conditions Regulation and Policy Level & Trend he level of T Regulation is Mediumand the trend is S teady Industry Assistance Level & Trend he level of T Industry Assistance is H ighand the trend is S teady The Stenographic Services industry is subject to a moderate level of regulation, as court reporters must be certified to record court cases in most states Individual states have their own examinations for stenographers to receive the title of Certified Court Reporter (CCR) Additionally, many court reporters receive training at a vocational or technical school before taking their state’s examination to enhance their typing speeds and accuracy The National Court Reporters Association (NCRA) certifies top training programs for industry stenographers Federal courts require stenographers to have attended an NCRA certified program before taking the CCR examination Additionally, court reporters can take other certificate examinations to distinguish their abilities The NCRA offers several certificates, such as the Registered Professional Reporter, Registered Merit Reporter and the Registered Diplomat Reporter recognitions The United States Court Reporters Association also offers a Federal Certified Realtime Reporter certification for stenographers who work in federal courts Government assistance is high in the Stenographic Services industry, as stenographers primarily generate their revenue through the government Court reporters are hired by local, state and federal courts, in addition to private law firms and other customers, to transcribe what is said during a court case In 2019, the industry is expected to generate just over 65.0% of its revenue from services to local, state and federal courts There are several national associations that assist industry operators The National Court Reporters Association (NCRA) certifies training programs for court reporters, offers various certifications for industry operators and argues for legislation to help stenographers Additionally, the United States Court Reporters Association (USCRA) offers training programs for stenographers The USCRA also helps develop industry standards and efficient techniques for transcribing Provided to: Seattle Pacific University (2134529962) | 31 December 2019 WWW.IBISWORLD.COM Stenographic Services in the US August 2019 25 Key Statistics Industry Data 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Industry Value Added Establish($m) ments 999.6 4,927 944.6 4,905 909.2 4,946 881.3 4,834 905.0 4,752 887.9 4,721 950.8 4,601 945.2 4,633 970.6 4,649 983.2 4,657 986.7 4,643 991.4 4,638 999.1 4,645 1,005.7 4,651 1,011.4 4,667 Revenue ($m) 2,645.9 2,584.9 2,389.5 2,327.2 2,368.9 2,413.9 2,535.9 2,612.1 2,669.2 2,710.3 2,723.8 2,740.1 2,764.3 2,783.6 2,800.5 Annual Change 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Key Ratios 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenue (%) -2.3 -7.6 -2.6 1.8 1.9 5.1 3.0 2.2 1.5 0.5 0.6 0.9 0.7 0.6 Industry Value Added (%) -5.5 -3.7 -3.1 2.7 -1.9 7.1 -0.6 2.7 1.3 0.4 0.5 0.8 0.7 0.6 IVA/Revenue (%) 37.78 36.54 38.05 37.87 38.20 36.78 37.49 36.19 36.36 36.28 36.23 36.18 36.14 36.13 36.11 Imports/ Demand (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Establishments (%) -0.4 0.8 -2.3 -1.7 -0.7 -2.5 0.7 0.3 0.2 -0.3 -0.1 0.2 0.1 0.3 Enterprises Employment 4,768 15,317 4,738 14,196 4,838 13,604 4,711 13,122 4,630 13,245 4,563 12,950 4,456 12,644 4,480 12,811 4,491 12,925 4,494 13,015 4,477 13,030 4,469 13,071 4,473 13,140 4,478 13,204 4,492 13,278 Exports Enterprises Employment (%) (%) -0.6 -7.3 2.1 -4.2 -2.6 -3.5 -1.7 0.9 -1.4 -2.2 -2.3 -2.4 0.5 1.3 0.2 0.9 0.1 0.7 -0.4 0.1 -0.2 0.3 0.1 0.5 0.1 0.5 0.3 0.6 Exports/ Revenue (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Revenue per Employee ($’000) 172.74 182.09 175.65 177.35 178.85 186.40 200.56 203.90 206.51 208.24 209.04 209.63 210.37 210.81 210.91 Imports Exports (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Wages/Revenue (%) 25.88 25.34 25.05 25.17 24.70 24.28 23.39 23.09 22.85 22.70 22.63 22.58 22.52 22.48 22.47 Wages ($m) 684.8 655.1 598.6 585.8 585.2 586.2 593.2 603.1 610.0 615.2 616.4 618.7 622.4 625.7 629.3 Imports (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Employees per Est 3.11 2.89 2.75 2.71 2.79 2.74 2.75 2.77 2.78 2.79 2.81 2.82 2.83 2.84 2.85 Figures are in inflation-adjusted 2019 dollars Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Wages (%) -4.3 -8.6 -2.1 -0.1 0.2 1.2 1.7 1.1 0.9 0.2 0.4 0.6 0.5 0.6 Domestic Demand N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Crime rate (Crimes per 100,000 people) 3,350.4 3,292.5 3,255.8 3,112.4 2,971.8 2,927.8 2,913.6 2,838.3 2,645.4 2,534.3 2,416.7 2,342.4 2,266.5 2,167.2 2,061.5 Domestic Demand (%) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Average Wage ($) 44,708.49 46,146.80 44,001.76 44,642.58 44,182.71 45,266.41 46,915.53 47,076.73 47,195.36 47,268.54 47,306.22 47,333.79 47,366.82 47,387.16 47,394.19 Crime rate (%) -1.7 -1.1 -4.4 -4.5 -1.5 -0.5 -2.6 -6.8 -4.2 -4.6 -3.1 -3.2 -4.4 -4.9 Share of the Economy (%) 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.00 0.00 0.00 SOURCE: WWW.IBISWORLD.COM Stenographic Services in the USAugust 2019 26 WWW.IBISWORLD.COM Jargon & Glossary Industry Jargon COMMUNICATION ACCESS REAL-TIME TRANSLATION (CART)Services that enable instant translation of spoken words into text by using a stenotype machine, computer or real-time software on a local or remote basis VOICE-RECOGNITION TECHNOLOGYSoftware that transcribes spoken words to on-screen text STENOGRAPH MACHINEAn electronic device, similar to a keyboard, with only 25 keys and a memory card that records the day’s typing IBISWorld Glossary BARRIERS TO ENTRYHigh barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for new companies to enter an industry CAPITAL INTENSITYCompares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity High capital intensity is more than $0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of capital for every $1 of labor CONSTANT PRICESThe dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e year published) as the base year This removes the impact of changes in the purchasing power of the dollar, leaving only the “real” growth or decline in industry metrics The inflation adjustments in IBISWorld’s reports are made using the US Bureau of Economic Analysis’ implicit GDP price deflator DOMESTIC DEMANDSpending on industry goods and services within the United States, regardless of their country of origin It is derived by adding imports to industry revenue, and then subtracting exports EMPLOYMENTThe number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers and executives within the industry ENTERPRISEA division that is separately managed and keeps management accounts Each enterprise consists of one or more establishments that are under common ownership or control ESTABLISHMENTThe smallest type of accounting unit within an enterprise, an establishment is a single physical location where business is conducted or where services or industrial operations are performed Multiple establishments under common control make up an enterprise EXPORTSTotal value of industry goods and services sold by US companies to customers abroad IMPORTSTotal value of industry goods and services brought in from foreign countries to be sold in the United States INDUSTRY CONCENTRATIONAn indicator of the dominance of the top four players in an industry Concentration is considered high if the top players account for more than 70% of industry revenue Medium is 40% to 70% of industry revenue Low is less than 40% INDUSTRY REVENUEThe total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); and capital work done by rental or lease Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded INDUSTRY VALUE ADDED (IVA)The market value of goods and services produced by the industry minus the cost of goods and services used in production IVA is also described as the industry’s contribution to GDP, or profit plus wages and depreciation INTERNATIONAL TRADEThe level of international trade is determined by ratios of exports to revenue and imports to domestic demand For exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20% Imports/domestic demand: low is less than 5%, medium is 5% to 35%, and high is more than 35% LIFE CYCLEAll industries go through periods of growth, maturity and decline IBISWorld determines an industry’s life cycle by considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments; the amount of change the industry’s products are undergoing; the rate of technological change; and the level of customer acceptance of industry products and services NONEMPLOYING ESTABLISHMENTBusinesses with no paid employment or payroll, also known as nonemployers These are mostly set up by self-employed individuals PROFITIBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability It is calculated as revenue minus expenses, excluding interest and tax Provided to: Seattle Pacific University (2134529962) | 31 December 2019 Stenographic Services in the USAugust 2019 27 WWW.IBISWORLD.COM Jargon & Glossary IBISWorld Glossary continued VOLATILITYThe level of volatility is determined by averaging the absolute change in revenue in each of the past five years Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%; and low volatility is less than ±3% WAGESThe gross total wages and salaries of all employees in the industry The cost of benefits is also included in this figure Provided to: Seattle Pacific University (2134529962) | 31 December 2019 www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com At IBISWorld we know that industry intelligence is more than assembling facts It is combining data with analysis to answer the questions that successful businesses ask Identify high growth, emerging & 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We are strategists, analysts, researchers, and marketers We provide answers to information-hungry, time-poor businesses Our goal is to provide real world answers that matter to your business in our 700 US industry reports When tough strategic, budget, sales and marketing decisions need to be made, our suite of Industry and Risk intelligence products give you deeply-researched answers quickly IBISWorld Membership IBISWorld offers tailored membership packages to meet your needs Disclaimer This product has been supplied by IBISWorld Inc (‘IBISWorld’) solely for use by its authorized licenses strictly in accordance with their license agreements with IBISWorld IBISWorld makes no representation to any other person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or information contained herein Copyright in this publication is owned by IBISWorld Inc The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes In the event that the purchaser uses or quotes from the material in this publication – in papers, reports, or opinions prepared for any other person – it is agreed that it will be sourced to: IBISWorld Inc Copyright 2019 IBISWorld Inc ... The major products and services in this industry are Additional services Local government stenographic services State government stenographic services Other stenographic services Similar Industries... and services segmentation (2019) 5.5% Additional services 27.0% 35.3% State government stenographic services Local government stenographic services Total $2.7bn 32.2% Other stenographic services. .. 31 December 2019 Stenographic Services in the USAugust 2019 WWW.IBISWORLD.COM Industry Performance Industry Outlook Over the five years to 2024, the Stenographic Services industry is anticipated
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