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DocumentPreparationServicesintheUS June 2012

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Prepared for success: The industry is well placed to take advantage of trends toward outsourcing

IBISWorld Industry Report 56141

Document Preparation Services in the US
June2012 AndrewKrabeepetcharat
2 AboutthisIndustry
2 2 2 3 Industry Definition Main Activities Similar Industries Additional Resources 16 International Trade 17 Business Locations 29 Industry Assistance

30 KeyStatistics 19 CompetitiveLandscape
19 Market Share Concentration 19 Key Success Factors 19 Cost Structure Benchmarks 21 Basis of Competition 30 Industry Data 30 Annual Change 30 Key Ratios

4 IndustryataGlance 5 IndustryPerformance
5 5 6 8 Executive Summary Key External Drivers Current Performance Industry Outlook

31 Jargon&Glossary

21 Barriers to Entry 22 Industry Globalization

23 MajorCompanies
23 Nuance Communications Inc. 24 MModal Inc.

11 Industry Life Cycle

13 Products&Markets
13 Supply Chain 13 Products & Services 14 Demand Determinants 15 Major Markets

27 OperatingConditions
27 Capital Intensity 28 Technology & Systems 28 Revenue Volatility 29 Regulation & Policy

www.ibisworld.com|1-800-330-3772|info @ibisworld.com

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AboutthisIndustry
IndustryDefinition
This industry provides one or more of the following: letter or resume writing; document editing or proofreading; typing, word processing or desktop publishing; and stenographic (except court reporting or stenotype recording), transcription and other secretarial services. This industry does not include document translation services, prepress and postpress services, or document copying services.

MainActivities

Theprimaryactivitiesofthisindustryare Desktop publishing services (i.e., document preparation service) Dictation services Document preparation and transcription services Editing services Letter and Resume writing services Proof reading services Secretarial services Stenographic services (except court or stenographic reporting) Transcription services Word processing services

Themajorproductsandservicesinthisindustryare Document editing and proofreading Transcription and stenographic services Typing, word processing and desktop publishing

SimilarIndustries

32311 PrintingintheUS This industry provides document copying services in combination with printing services from establishments known as quick or digital printers. 32312 PrintingServicesintheUS This industry performs prepress and post-press services in support of printing activities. 54193 TranslationServicesintheUS This industry provides document translation services. 56143 BusinessServiceCentersintheUS This industry provides photocopying, duplicating and other document copying services.

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AboutthisIndustry

AdditionalResources

Foradditionalinformationonthisindustry www.bentley.edu Bentley University www.infotrends.com Infotrends www.census.gov US Census Bureau

I  BISWorld writes over 700 US industry reports, which are updated up to four times a year. To see all reports, go to www.ibisworld.com

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IndustryataGlance
DocumentPreparationServicesin2012 KeyStatistics Snapshot
Revenue

$4.5bn
Profit

AnnualGrowth07-12

-0.3%
Wages

AnnualGrowth12-17

$669.5m $2.3bn
MarketShare
Revenue vs. employment growth
10 5

3.9% 56,683
Businesses
9 8 7 6 5 4

Total health expenditure

Nuance Communications Inc. 14.5%
% change

MModal Inc. 9.9%

0 −5 −10

% change

Year 04 Revenue
p. 23

06

08

10

12

14

16

18

Year

3

05

07

09

11

13

15

17

Employment
SOURCE: WWW.IBISWORLD.COM

Products and services segmentation (2012)
Document editing and proofreading

KeyExternalDrivers

15%

Totalhealthexpenditure Demandfrom professional,scientific andtechnicalservices Corporateprofit Privateinvestmentin computersandsoftware

Typing, word processing and desktop publishing

30%

Transcription and stenographic services

55%

p. 5
SOURCE: WWW.IBISWORLD.COM SOURCE: WWW.IBISWORLD.COM

IndustryStructure

Life Cycle Stage Revenue Volatility Capital Intensity Industry Assistance Concentration Level

Mature Medium Low None Low

Regulation Level Technology Change Barriers to Entry Industry Globalization Competition Level

Medium Medium Low Low High

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 30

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IndustryPerformance
Executive Summary
Rising healthcare expenditure and outsourcing of business services have driven this industry’s long-term growth. Recently, however, growth has been hampered by poor performance in downstream markets during the recession, particularly the banking, finance and insurance industries. Growth has also been tempered by an increasing use of highly skilled suppliers overseas that can provide the same services at lower wage costs. These trends had a particularly devastating impact on the

ExecutiveSummary | KeyExternalDrivers | CurrentPerformance IndustryOutlook | LifeCycleStage

Rising healthcare expenditure have helped  drive long-term growth
Document Preparation Services industry’s revenue and profit performance in 2008 and 2009. As a result of declines during those years, IBISWorld estimates that industry revenue declined an annualized 0.3% to $4.5 billion in the five years to 2012. Poor operating conditions and falling prices have contributed to consolidation among large operators. In February 2010, Spheris, which previously provided document services to about 500 hospitals and health systems, declared bankruptcy and sold its US and Canadian businesses

to current major player MModal. Although such acquisitions are not uncommon, the industry’s low barriers to entry have pushed the number of small operators up. Consequently, the number of firms operating in this industry increased 0.4% annually on average to 59,683 in the five years to 2012, in spite of major player consolidation. In 2012, the industry is forecast to grow 5.1% as the economy slowly rebounds from the recession. Technological improvements, such as voice-to-text software, have helped reduce the price of providing document preparation services. Technology has been a double-edged sword, though, because improvements in internet technology enable document processing overseas in lower-wage countries. Increased price competition among firms has reduced profit margins during the past five years. Fortunately for industry operators, demand for industry services is forecast to increase in the five years to 2017, with revenue forecast to grow an annualized 3.9% to $5.4 billion. Although pricing competition will continue to limit profit growth, industry operators will benefit from rising healthcare expenditure, which will fuel demand for industry services.

KeyExternalDrivers

Total health expenditure Healthcare providers are one of this industry’s primary markets. An increase in total health expenditure will boost demand for medical transcription services. This driver is expected to increase during 2012, representing a potential opportunity for the industry. Demand from professional, scientific and technical services The service sectors of the economy, particularly the professional, scientific

and technical service sectors, are major users of industry services. Poor performance in downstream industries, particularly during a recession, adversely affects industry revenue. This driver is expected to increase in 2012. Corporate profit Growth in corporate profit increases the demand for outsourcing professional services. On the other hand, industry demand and revenue typically contract during a recession as

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IndustryPerformance

KeyExternalDrivers continued

companies review contracts and pricing. This driver is expected to increase slowly during 2012. Private investment in computers and software Advances in communications technology can have varying effects on demand.
Total health expenditure
9 8

Although technology can lower the cost of providing services, an increase in computer penetration also allows businesses to do more work in-house and use overseas services via the internet. This driver is expected to increase during 2012 and represents a potential threat to the industry.
Demand from professional, scientific and technical services
6 4

% change

6 5 4

% change

7

2 0 −2 −4

Year

3

05

07

09

11

13

15

17

Year 05

−6

07

09

11

13

15

17

SOURCE: WWW.IBISWORLD.COM

Current Performance

The Document Preparation Services industry is sensitive to changes in economic activity because businesses generally outsource more noncore business services as corporate profit rises. Unfortunately for industry operators, the recession caused revenue to fall as businesses reduced spending on outsourced services. Industry operators often create marketing documents for companies, including brochures, flyers and pamphlets; however, many companies reduced spending on marketing activities, which hurt demand for this industry. As such, IBISWorld estimates that the industry’s revenue decreased an annualized 0.3% during the five years to 2012. More significant decline over the

period was offset by advancing technologies in the Document Preparation Services industry, including new telecommunications, the internet and computer hardware and software, such as voice-to-text transcription that uses voice-recognition technology. These innovations are expected to continue benefiting the industry in coming years. And in 2012, the industry also faces brighter trading conditions as the economy gradually emerges from the depths of the recession. Industry revenue is expected to increase 5.1% in 2012 to $4.5 billion. Still, the industry’s highly fragmented nature will keep competitive pressures strong. Consequently, price competition will continue even as demand increases.

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IndustryPerformance

Medicaltranscription services

A significant growth area remains in the medical transcription services (MTSs) segment. Federal government requirements for healthcare providers (e.g. hospitals, doctors and specialists) to present patient records in electronic format have caused long-term growth for the industry. The industry’s largest players, including MModal and Nuance Communications, operate in this segment, providing medical reports from imaging and pathology services. The demand for MTSs grew at a rapid pace due to the need to maintain basic hospital data (which also must be acceptable to insurers) and record data and medical procedures for research. Documentation requirements have

significantly increased, resulting in a greater need for medical note dictation and transcription. Operators that provide MTSs must be familiar with regulations related to the Health Insurance Portability and Accountancy Act (HIPAA). The escalation in demand for healthcare services intensified as the baby-boomer generation ages, increasing the amount of money spent on healthcare. Although MTSs are still being conducted in-house at many hospitals, the healthcare segment grew significantly in the five years to 2012. In spite of this segment’s growth, poor performance across other markets is what caused the industry’s overall five-year decline.

Increased competitionlimits profitgrowth

Many major players have exhibited significant growth during the five-year period to 2012, primarily as a result of acquisitions at the top end of the market. For example, in 2010, MModal acquired Spheris, which helped boost company revenue 22.1% during the year. Similarly, Nuance Communications acquired Dragon Medical and SpeechMagic during 2010, increasing its revenue 20.4% during the year. In spite of this consolidation, small players have continued to proliferate due to the industry’s low barriers to entry. IBISWorld estimates that the number of firms operating in this industry has increased at an average of 0.4% annually to 56,683 in the five years to 2012, while industry employment has increased at an annualized 1.3% to 100,895 workers in 2012. The increasing use of computers and word-processing software by a greater proportion of the white-collar workforce in the United States has been a factor in price and margin pressure for document preparation service providers. Additionally, the rising number of firms offering document preparation services

Price and margin pressure  has resulted from advancing technologies and the subsequent competition resulted in price competition for the majority of products and services provided. Document preparation services are being conducted by a rising number of homebased operators, many of whom work on a part-time basis and generate low incomes. In 2012, about 91.5% of firms in the industry are nonemployers. Over the past five years, an increasing amount of document preparation work has been outsourced to countries with a highly skilled, but lower labor cost base, including India and the Philippines. This trend has been aided by improving telecommunications technology, which has helped to further establish links between the United States and these countries. Such improvements also reduced delivery times from foreign providers, further increasing price-based competition within the domestic market.

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IndustryPerformance

Recentperformance

The economic recession caused significant business liquidations and bankruptcies, which impacted heavily on the desktop publishing and related services segment and caused its revenue and profit to plummet. This segment’s clients include small businesses, which were particularly hurt by the recession. As a result, demand from small businesses declined as the pool of potential clients fell. This segment also relies on the finance and service sectors of the economy, both of which were significantly impacted by the recession.

The industry’s low concentration allowed clients to easily shop for lower prices. The combination of lower prices and limited demand caused industry revenue to fall 4.6% and 8.8% in 2008 and 2009, respectively. Prior to the recession, business investment contributed to industry expansion. In this environment, industry growth resulted from the acceleration in outsourcing of business and government business services. Rapid growth was evident in the MTS segment, where government legislation pushed for the computerization of patient records.

Industry Outlook

Operating conditions are expected to continue improving in 2013 as the economy’s recovery gains momentum, which will generate positive growth from clients in the service sectors, with revenue growth accelerating from the outsourcing of services by both businesses and governments. This growth will particularly benefit companies that provide document preparation and transcription services. In 2013, revenue is forecast to increase 4.0% to $4.6 billion. The majority of industry growth, however, will come from robust demand in the health and medical services sector as the baby-boomer generation progressively ages, requiring more medical transcription services (MTSs). This positive trend will be assisted by an increasing amount of money being spent on healthcare. Although advancing technologies and increased digitization, particularly the electronic storage of all patient medical records by hospitals and

Industry revenue
8 5

% change

2 −1 −4 −7

Year 04

−10

06

08

10

12

14

16

18

SOURCE: WWW.IBISWORLD.COM

medical services, are expected to benefit the industry, technology changes will also threaten it. Advances in computer and communications technology will make it easier for customers to perform industry services in house or outsource them to high-skill, low-wage cost countries overseas.

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IndustryPerformance

Revenue,employment Over the five years to 2017, industry revenue is forecast to increase at an andprofit

annualized rate of 3.9% to $5.4 billion, largely due to growth in the downstream markets. A return to outsourcing of the industry’s activities by the service sector will continue to create increasing competition, particularly from international service centers in the MTS segment. This competition will limit profit growth over the next five years. Over the same period, industry employment is anticipated to rise at an annualized rate of 2.5% to 114,327, with small firms remaining the mainstay of the industry. There will continue to be some consolidation, though, with an increasing emphasis placed on establishing international operations (or strategic alliances and partnerships) to lower costs for services and remain competitive in the domestic

Price-based competition  will continue, strengthening industry consolidation market. Major operators may eventually turn their attention toward MTSs in other countries. Overall, the industry is expected to continue to grow at a relatively stronger pace from 2013 onward, leading to stronger growth in industry revenue, profit and employment. But significant price-based competition will continue, eventually leading to further industry consolidation. Profit margins will generally remain under significant pressure due to subdued economic growth affecting demand growth and the industry remaining highly price-competitive.

Thefuture

Government and business sectors will continue to seek further cost savings by outsourcing noncore tasks, such as back-office activities. The Document Preparation Services industry will benefit from this trend. However, increasing office automation and organizational restructuring will continue to make secretaries, desktop-publishing staff and other office assistants more productive, which may adversely affect the level of overflow work outsourced to document preparation service providers. At the same time, the industry is expected to face rising pressure from offshore service providers, with service providers that specialize in the financial services and healthcare industries taking the biggest hit. Foreign competitive pressure will mainly come from Asia due to the region’s plentiful supply of high-quality, low-cost labor. In recent years, MTSs haves been increasingly outsourced to countries

with low labor costs, such as India and the Philippines. This trend has been aided by improvements in, and lower costs for, internet communication links between the United States and these countries. Additionally, US companies have become more comfortable with sending their work overseas. Such trends are expected to continue during the five years to 2017. Solid demand for MTSs is expected to continue, particularly from existing demographic trends. This relates to the aging baby-boomer generation and its increasing need for medical services, which will lead to a corresponding increase in the demand for MTSs. Reimbursement pressures from managed-care growth have fueled consolidation within the healthcare industry and the formation of various types of healthcare provider groups, from integrated delivery networks to managed service organizations.

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IndustryPerformance

Thefuture continued

Documentation requirements have significantly increased, resulting in a rise of MTSs. As a result of breakthroughs in technology, telecommunications, the acceptance of the internet and new applications (such as speech-recognition tools), healthcare providers are relying on new technologies and outsourcing to remain competitive. The ability to

process transcription services off-site allows for faster turnaround times, increased availability of scarce skilled professionals, improved quality and lower costs. As a result of these trends, this industry will benefit as specialized healthcare service companies continue to leverage technology to increase their value to healthcare providers.

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IndustryPerformance
LifeCycleStage

Further growth in the medical transcription service segment is expected Demand for service outsourcing grew slowly following the recession International competition has led to significant price-based competition

%Growthofprofit/GDP 

30

25

Company consolidation; level of economic importance stable

Maturity

QualityGrowth

High growth in economic importance; weaker companies close down; developed technology and markets

KeyFeaturesofaMatureIndustry Revenue grows at same pace as economy Company numbers stabilize; M&A stage Established technology & processes Total market acceptance of product & brand Rationalization of low margin products & brands

20

15

QuantityGrowth

10

Many new companies; minor growth in economic importance; substantial technology change

5

SpecialistDoctors PrimaryCareDoctors Copier&OfficeEquipmentWholesaling 
0

DocumentPreparationServices

Shake-out
–5

Printing PrintingServices

Shakeout

Decline
–10 –10 –5

Crash or Grow?

PotentialHiddenGems
Future Industries 5 10 15 20

TimeWasters
Hobby Industries 25 30

0

%Growthofestablishments
SOURCE: WWW.IBISWORLD.COM

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IndustryPerformance

IndustryLifeCycle T  his industry is Mature

The Document Preparation Services industry is between the growth and mature phases of its industry life cycle. More specifically, some of the services provided by the industry, such as medical transcription services (MTSs), are growing while others are mature. The industry has benefited from hospitals’ move to online record keeping. This trend is expected to account for the majority of industry growth during the next five years. During the 10 years to 2017, IBISWorld forecasts that the industry’s contribution to the overall economy, measured by industry value added (IVA), will grow at an annualized rate of 1.7%. This growth is roughly in

line with the overall economy, which is estimated to expand at an annualized rate of 2.1% during the same period. MTSs have been increasingly outsourced to countries with low labor costs, such as India and the Philippines. This trend has limited domestic revenue growth as larger operators capitalize on cost-saving opportunities. It has also hampered profit and revenue growth for small players that have faced increasing price competition. Furthermore, many clients slowed their use of outsourcing services following the recession as a way to mitigate falling profit. This factor also limited revenue and profit during the past five years.

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Products&Markets 
SupplyChain
KEYBUYINGINDUSTRIES
62111a 62111b 62211

SupplyChain | Products&Services | DemandDeterminants MajorMarkets | InternationalTrade | BusinessLocations

PrimaryCareDoctorsintheUS Primary care doctors use this industry for transcribing work. SpecialistDoctorsintheUS Specialist doctors use document preparation for transcribing work. HospitalsintheUS Hospitals are a major source of demand for transcribing work.

KEYSELLINGINDUSTRIES
32311 42342 PrintingintheUS Document preparation services utilize printing services Copier&OfficeEquipmentWholesalingintheUS Document preparation services require office equipment, such as fax machines and photocopiers. Computer&PackagedSoftwareWholesalingintheUS Document preparation services require office equipment, such as computers, printers and other peripherals PaperWholesalingintheUS Paper is required when printing documents.

42343

42411

Products&Services

Products and services segmentation (2012)
Document editing and proofreading

15%

Typing, word processing and desktop publishing

30%

Transcription and stenographic services

55%

Total $4.5bn
The transfer of documents via e-mail has increased service levels and productivity for each of the industry’s segments; however, this has been offset by the availability of increasingly powerful pre-packaged software, which allows clients to more easily perform their own document preparation, editing and desktop publishing capabilities.

SOURCE: WWW.IBISWORLD.COM

Stenographic, transcription and other secretarial services Medical transcription services (MTSs) are a significant area of activity in this industry. MTSs involve people listening to dictated recordings made by physicians or other healthcare professionals and transcribing these into medical reports, correspondence or other

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Products&Markets

Products&Services continued

formats required. The process may also involve some grammar correction and editing to improve the clarity of the material presented. The internet has been increasing in popularity as a method to transmit verbal reports for transcription. Speech- recognition software is also increasingly being used, with a higher degree of editing skills required by transcribers to fix any translation errors by the programs. This generally applies in specialist areas of healthcare, such as pathology or imaging. The type of documents transcribed include: autopsy reports, reports on operations, medical histories, referrals of patients to specialists or interpretation of pathology or medical imaging results for physicians. Documents are usually returned via e-mail to the initiating physician, who may correct some details and return it for amendment prior to signing off. The MTS market is the industry’s largest client -base. The industry’s largest players, MModal and Nuance Communications, focus on this market. This market is expected to expand during the next five years as healthcare expenditure continues to rise. Typing, word processing and desktop publishing Desktop publishers use computer software to format and combine data,

text, graphs, charts and other graphical details into an appropriate format. Clients often use this for the creation of books, reports, magazines, flyers, pamphlets and brochures. Desktop publishing requires creative and graphic design skills to manipulate and present text and graphics in an organized and easy-to-read format. This service can differ depending on client and audience needs. Use of colors, fonts, headings and graphics and pictures in the documents is important. The technology required includes computer hardware, appropriate software packages and scanners. All the activity is presented in digital formats to clients for ease of copying and printing, as well as potential modification at a later stage. Documents are usually presented in a print-ready format to clients. Document editing and proofreading services Document editing and proofreading services are specialist tasks. These services are used for books, articles and magazines that are aimed at particular age groups or specialist markets. They are also used for academic or technically written documents. These services may also be undertaken by desktop publishers.

Demand Determinants

Growth in the white-collar labor force and the service sectors of the economy is vital to this industry since it tends to have greater requirements for document preparation services. The recession devastated many major and high-profile services industries (including banking, finance and insurance). This factor adversely affected industry growth as these industries cut back on service outsourcing.

Another important factor is the extent to which business and government sectors outsource documentation preparation services. Outsourcing can turn a fixed cost into a variable one. Healthcare providers are increasingly outsourcing MTSs as part of a requirement under federal government legislation to computerize all medical records. This factor has caused the MTS segment to increase as a proportion of

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Products&Markets

Demand Determinants continued

revenue, a trend that is expected to continue over the next five years as total healthcare expenditure continues to rise. Technological advances in computer, communications and IT security can have varying effects on demand. It can lower the cost of providing document preparation services (such as through productivity gains). These can be passed through to clients in the form of lower unit selling prices, promoting demand. And if industry players develop or restrict access to technology, they can help attract more outsourcing work. On the other hand,

easily accessible and user-friendly technology can create opportunities to undertake more work in-house and reduce the level of outsourcing to document preparation service providers. The development of international networks has enabled US-based organizations to outsource transcription work to overseas-based providers, usually in low wage-cost countries. The provision of industry services overseas can reduce the amount of revenue generated domestically by limiting the workload of US operators.

MajorMarkets

Major market segmentation (2012)

Small service-related business

30%

Healthcare providers

40%

Total $4.5bn

Other businesses
SOURCE: WWW.IBISWORLD.COM

30%

The industry’s major market segments are the healthcare and service sectors of the economy. In the typing, word processing, or desktop publishing segment, the major markets are enterprises in the property and business services industries. Smaller operators in these industries are likely to outsource these services. Unfortunately for industry operators, many small service-related businesses were the victim of the recession, resulting in declining industry demand from this market. Furthermore, the recession devastated many major and high-profile

services industries, including those in the banking, finance and insurance sectors. This factor adversely affected industry growth as these industries cut back on service outsourcing. The recession also caused many clients to seek discounts on outsourced services, which ultimately increased pricing competition and reduced industry revenue. At the same time, the industry has experienced an overall increase in demand for medical transcription services (MTSs). As such, healthcare providers have become a growing market for the Document Preparation

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Products&Markets

MajorMarkets continued

Services industry. The MTS segment serves healthcare providers, with the major markets comprising hospitals, physicians, pathology laboratories and imaging centers. During the five years to 2017, an increasing amount of

money will be spent on healthcare, representing a potential opportunity for the industry. Furthermore, an increasing number of hospitals are storing patient data online, which will ultimately boost industry demand.

InternationalTrade

The industry is largely focused on providing services to the domestic market. However, more medical transcription work is being outsourced to countries with low

labor costs, such as India and the Philippines. This trend has been aided by improving internet communications links between the United States and these countries.

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Products&Markets 
BusinessLocations2012

West
AK
0.1

New England Great Lakes
MN

MidAtlantic
MI
2.3

ME
0.6

WA
1.8

OR
1.0

Rocky Mountains ID
0.1 0.2

MT

ND
0.1

SD
0.1

Plains
IA
0.6

1.2

1 2 3 NY 13.4 5 4 6 7 8

WI
1.1

PA
4.7

WY
0.2

West NV
0.8

NE
0.2

IL
4.7

IN
0.7

OH
4.5

9

UT
1.0

CO
1.8

KS
0.4

MO
1.2

KY
0.5

WV VA 3.4
0.2

NC
1.4

CA
10.0

OK AZ
2.4 0.8

AR
0.4

Southeast
4.2

TN

SC
0.5

NM
0.2

Southwest
TX
5.9

MS
0.2

AL
0.3

GA
5.1

LA
0.9

FL
9.2

West

HI
0.2

AdditionalStates(as marked on map) 1 VT
0.1 0.4

Revenue(%)  Lessthan3%  3%tolessthan10%  10%tolessthan20%  20%ormore
SOURCE: WWW.IBISWORLD.COM

2 NH
0.2

3 MA
2.7

4 RI
0.1

5 CT

6 NJ
4.5

7 DE
0.3

8 MD
1.7

9 DC
1.4

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Products&Markets 

BusinessLocations

The Document Preparation Services industry is concentrated in the Southeast and Mid-Atlantic regions of the United States. The industry’s operations are largely focused on levels of economic activity and proximity to complimentary industries, which include the information, finance, insurance, real estate, and professional services sectors. The Mid-Atlantic and Southeast regions account for 16.4% and 25.2% of industry revenue, respectively, making them the two most active regions for industry operations across the United States. This fact is not surprising given that the Southeast is home to the greatest proportion of the US population and the
Revenue vs. population
30

Mid-Atlantic is home to the headquarters of many service industries. California and Florida account for the largest portions of industry revenue, generating about 11.0% and 9.6%, respectively. California (given the size and diversity of its industrial structure, as well as population size) and Texas have a higher concentration of establishments and employment in this industry. However the average number of employees per employer establishment varies, ranging from a high of 26 in Tennessee to a low of two to three in some states. In general, the industry comprises a large number of small businesses, including non-employers.
Revenue vs. establishments
30

20

20

%

10

%
10 0 Great Lakes New England Mid-Atlantic Rocky Mountains Southeast Southwest West Plains 0 Great Lakes Mid-Atlantic New England Southeast Rocky Mountains Southwest Plains West

Revenue Population

Revenue Establishments
SOURCE: WWW.IBISWORLD.COM

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CompetitiveLandscape
MarketShare Concentration
Level  Concentration in In 2012, IBISWorld estimates that the four largest firms in the Document Preparation Services industry represent about 27.5% of market share. The vast majority of operators in this industry are nonemployers; about 91.5% of firms do not have any paid employees. Despite the high number of nonemployers, they are estimated to generate just 29.2% of industry revenue. In the five years to 2012, the number of firms operating in this industry has increased 3.7% annually to 56,683. In spite of this trend, the industry has experienced some consolidation, primarily at the top end of the market. The largest firms in the industry have grown over the past five years, largely as a result of acquisition. For example, MModal acquired Spheris during 2010, significantly boosting its market share. About 76.3% of firms have fewer than five employees, and 86.6% of operators

MarketShareConcentration | KeySuccessFactors | CostStructureBenchmarks BasisofCompetition | BarrierstoEntry | IndustryGlobalization

Enterprisesbyemploymentsize (2012)
No.of employees 1 to 4 5 to 9 10 to 19 20 to 99 100 to 499 500+ Total No.of enterprises 3,690 499 320 253 66 6 4,834 Share (%) 76.4 10.3 6.6 5.2 1.4 0.1 100.0

this industry is Low

SOURCE: US CENSUS BUREAU AND IBISWORLD

employ fewer than 10 people. Nonemployers, in particular, have increased as a proportion of industry enterprises and revenue during the past decade. Consequently, the inflow of small players into the industry has counterbalanced the consolidation of larger firms.

KeySuccessFactors I  BISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:

Prompt delivery to market Ability to offer prompt and efficient service, and to meet deadlines. Access to quality personnel management Good management skills, including personnel management, as the quality and timeliness are important competitive factors. Training is also important in this industry (i.e. keeping pace with new or updated software).

Guaranteed supply of key inputs A reserve of casual staff to call on when necessary. Outsourced contracts Since outsourced contracts is a key growth area of industry growth, experience in negotiations on, tendering for and managing these contracts with clients is essential

CostStructure Benchmarks

The cost structures of firms in this industry vary based on a variety of factors. Small operators are often sub-contractors of large firms. This factor causes a difference of cost structure items between companies on the lower and upper end of the market.

For example, larger firms often have more significant marketing expenses. Profit IBISWorld estimates that in 2012, the industry’s operating profit represents 15.0% of industry revenue. The

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CompetitiveLandscape

CostStructure Benchmarks continued

Document Preparation Services 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. Nevertheless, most operators have relatively few variable costs, a factor that enhances industry profit as revenue increases. Unfortunately for industry operators, the recent decline in industry revenue had the opposite effect, causing industry consolidation in 2009 and 2010. Price-based competition is particularly prevalent in the medical transcription service (MTS) segment. During the recession, the intense price competition caused two of the three major industry players to report losses. Wages This industry is labor intensive, with wages representing about 50.5% of
Sectorvs.IndustryCosts
AverageCostsof allIndustriesin sector(2012) 100

industry revenue in 2012. Until the recession, the industry was adversely affected by the domestic shortage of medical language specialists. This factor forced operators to offer more competitive pay and benefits to attract and retain workers during the early part of the past decade. The recession has caused wages to begin declining once again, however, since potential employees are willing to work for lower wages. Another factor that has caused a long-term decline in wages is the ongoing development of laborsaving technology, including voice-to-text software. Firms have also increasingly used offshore facilities in highly skilled and low laborcost countries, such as the Philippines and India. Other Significant expenses include lease or depreciation of equipment, including

IndustryCosts (2012)

7.1

15.0

80

Percentage of revenue

52.5
60

50.5

■Profit  ■Wages ■Purchases ■Depreciation ■Marketing ■Rent&Utilities ■Other

40

13.2 2.9 4.7 17.2 2.3

3.5

20

3.9 6.0 4.0 17.1
SOURCE: WWW.IBISWORLD.COM

0

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CompetitiveLandscape

CostStructure Benchmarks continued

computers and office-related software. IBISWorld estimates that rent and depreciation represent 2.0% and 3.9% of industry revenue, respectively. For the MTS segment, additional costs include purchase of voice recognition and voice-to-text equipment and software. Industry operators incur a variety of other expenses related to the day-to-day costs of running a business. These costs

include legal and administrative expenses. Communication costs in terms of telephone, and particularly for high speeded broadband access, can also be significant. Document preparation companies – particularly large operators – also incur costs associated with marketing. IBISWorld estimates that marketing represents about 6.0% of industry revenue.

BasisofCompetition
Level&Trend  Competition in

this industry is High and the trend is Increasing

The Document Preparation Services industry is currently characterized by a relatively large number of small players that serve a local or regional market. The industry’s fragmented nature contributes to its high level of competition. Internal competition Industry competition is primarily based on price and quality, and these factors can improve a company’s turnaround time and accuracy. The ability to satisfactorily complete time-sensitive work is important. In the medical transcription segment, good proprietary voice-recognition software and other web-based technologies also provide a competitive advantage. With the increasing use of e-mail as a means of data transfer, word processing

and other desktop publishing services can readily be provided from a small or a home office. Additionally, clients have increasingly considered electronic security, data backup capabilities and data integration when considering industry operators. External competition Companies in this industry compete with in-house providers of transcription and document preparation services. In the healthcare market, there has also been an increase in the outsourcing of some services to countries with relatively lower labor costs, including India and the Philippines. Improving internet communication links between the United States and these countries has aided this trend.

BarrierstoEntry
Level&Trend  Barriers to Entry

in this industry are Low and Steady

The barriers to entry into the Document Preparation Services industry are low, as evidenced by the large number of small players in this industry. The industry’s low level of capital intensity makes it relatively easy for firms to enter the industry. Furthermore, the vast array of relatively cheap and sophisticated word processing and desktop publishing software has diminished the industry’s barriers to entry. These factors have caused

BarrierstoEntrychecklist
Competition Concentration Life Cycle Stage Capital Intensity Technology Change Regulation & Policy Industry Assistance

Level
High Low Mature Low Medium Medium None

SOURCE: WWW.IBISWORLD.COM

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CompetitiveLandscape

BarrierstoEntry continued

non-employers to account for a growing proportion of revenue and enterprises. Little training is required for staff to become proficient in the use of computer technology and software packages and the use of telecommunications and the internet. For the medical transcription services segment, however, transcriptionists must have an understanding of the Health Insurance Portability and Accounting Act of 1996 (HIPAA). HIPAA includes standards for

electronic healthcare transactions and addresses the issues of patient privacy and data security. A potential barrier to success for new operators is limited profit growth. This industry has a significant amount of competition, especially in relation to pricing, so operators may have to lower prices and sacrifice profit to compete. And to reduce their costs, major operators have increasingly established offices overseas.

Industry Globalization
Level&Trend  Globalization in

this industry is Low and the trend is Increasing

Most operators in this industry are small and primarily serve local clientele; however, improving global telecommunications has significantly increased the amount of work performed overseas, particularly in the

medical transcription service (MTS) segment. MTS work is increasingly being outsourced to countries that have a relatively high- skilled labor force yet low labor costs, including India.

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MajorCompanies 
Majorplayers
(Market share)

NuanceCommunicationsInc. | MModalInc. | OtherCompanies

MModalInc.9.9%

75.6%
Other NuanceCommunicationsInc.14.5%
SOURCE: WWW.IBISWORLD.COM

PlayerPerformance Nuance Communications Inc. M  arket share: 14.5%

Nuance Communications was incorporated in Delaware in 1992. The company provides voice and language solutions, including dictation and transcription services that are included in this industry. Nuance currently employs 7,300 workers worldwide. The company serves four markets: healthcare, mobile and consumer, enterprise, and imaging. The company primarily operates in this industry through its healthcare segment. Clients in this segment use Nuance’s services for transcription and dictation, as well as the generation and distribution of clinical documentation. The company also provides voice-recognition services for enterprise and consumer clients. These services are incorporated into products for voice control, predictive text and text to speech. Nuance offers its recognition software in about 60 languages. Although

Nuance operates in international markets, nearly 70.0% of the company’s revenue is generated in the United States. And IBISWorld estimates that about 70.0% of the company’s industry-specific revenue is generated in the US market. In 2010, the company acquired Dragon Medical products and SpeechMagic solution. These acquisitions came on the heels of the 2009 purchase of eScription and PSRS. Similarly, in 2007, the company’s acquisition of Dictaphone and Focus caused the healthcare segment’s revenue to increase a drastic 105.8%. In the five years to 2012, the healthcare segment has grown very quickly, with revenue rising at an estimated annualized rate of 18.2% to $648.1 million. Although the company has experienced some organic growth during this period, the rapid growth has largely been the result of acquisitions.

NuanceCommunicationsInc.(UShealthcaresegment)– financialperformance* 
Year 2007 2008 2009 2010 2011 2012
*Estimate SOURCE: US CENSUS BUREAU AND IBISWORLD

Revenue ($ million) 281.3 350.0 392.0 449.2 526.8 648.1

(% change) 105.8 24.4 12.0 14.6 17.3 23.0

OperatingIncome ($ million) 143.5 179.0 184.8 227.4 269.4 353.0

(% change) 105.9 24.7 3.2 23.1 18.5 31.0

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MajorCompanies

PlayerPerformance MModalInc. M  arket share: 9.9%

MModal was first incorporated in 1984, and then acquired its first medical transcription company in 1994. MModal provides transcription- and informationmanagement services to more than 3,000 hospitals, physician groups and other healthcare organizations nationwide. In January 2012, MModal changed its name from MedQuist Inc. The company currently employs 12,000 workers across five countries and holds more than 140 patent and licenses in speech recognition and understanding. Its service offerings include the DocQment Enterprise Platform, which is a healthcare information platform that serves as the foundation for its transcription software. It includes workflow management, core measures reporting, structured documentation, data analytics and key customer reporting. Other software tools used include SpeechQ real-time interactive speech recognition for radiology and general medicine and DocQvoice for capturing dictation, and computerassisted coding and abstracting. In the years since its first acquisition, MModal has made more than 50 acquisitions. Prior to 2008, Philips Electronics owned 70.0% of the company until it sold this stake to CBaySystemsHoldings. CBaySystems, now known as MedQuist Holdings Inc.,

added MedQuist Inc. to its collection of healthcare information-management businesses. In July 2008, the company was listed on the NASDAQ global market. In April 2011, the company announced that it would be integrating the operations of MedQuistHoldings Inc. and MedQuist Inc. MModal’s recent growth has largely been the result of an April 2010 acquisition of Spheris, which contributed to revenue growth of 22.1% during the year. Spheris filed for bankruptcy in February 2010 and sold its US and Canadian businesses to MModal for about $75 million in cash. The acquisition of Spheris added some $88 million of revenue during 2010. Due in part to the acquisition, IBISWorld estimates that MModal’s revenue increased at an estimated annualized rate of 5.3% to $439.8 million in the five years to 2012, despite revenue declines between 2006 and 2009. The return to growth is a welcome sight for the company. In 2008, the company experienced lower medical transcription revenue, due to both lower volume and pricing, as well as reduced revenue from maintenance contracts. The trend continued in 2009, when a decrease in transcription services prices, coupled with a decline in demand for maintenance services, caused

MModalInc.(USrelevant)–financialperformance* 
Year 2007 2008 2009 2010 2011 2012
*Estimate

Revenue ($ million) 340.3 326.9 307.2 375.2 425.0 439.8

(% change) N/C -3.9 -6.0 22.1 13.3 3.5

NetIncome ($ million) -15.2 68.8 23.3 31.1 35.0 36.9

(% change) N/C N/C -66.1 33.5 12.5 5.4

SOURCE: ANNUAL REPORT AND IBISWORLD

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MajorCompanies

PlayerPerformance continued

consolidated revenue to fall. Additionally, the company has been the subject of some lawsuits and federal investigations involving allegations of over-billing clients and underpaying employees. The

latest of these lawsuits was filed by Kaiser Foundation Health Plan Inc. In July 2010, the companies reached an agreement that required MModal to pay $2 million to resolve Kaiser’s claims.

OtherCompanies

While the industry has experienced some consolidation among large operators, the number of small firms has increased considerably. As such, this industry is characterized by a large number of small firms. IBISWorld estimates that about 91.5% of the firms in this industry are non-employers. The trends toward better technology and high-speed internet access have led to an increasing proportion of home-based operators.

Transcend Services Inc.

Estimated market share: 3.1% Atlanta-based Transcend Services Inc. (TSI) is listed on the NASDAQ exchange and provides medical transcription services. The company’s web-enabled voice and data distribution technology allows Transcend’s home-based medical language specialists to convert physicians’ voice recordings into electronic medical record documents. Transcend delivers dictation and transcription services to 61 hospitals and clinics with recurring revenue

under long-term contract or other arrangements. In the five years to 2012, IBISWorld estimates that the company’s revenue will increase an annualized 26.9% to $140.0 million. Like many of the larger firms in the Document Preparation Services industry, this significant growth is largely the result of acquisitions. TSI provides two primary transcription options for customers; proprietary BeyondTXT workflow technology and services, and transcription support services for customers with their own transcription systems. The company’s transcription operations run 24 hours per day, every day of the year. Physicians may use any of several dictation products on the market or any phone. The information is securely captured in a digital format in a central voice hub. The digital voice files are then compressed, encrypted and stored. The company’s homebased medical language specialists access these files over the internet, play

TranscendServicesInc.(USindustryoperations)–financialperformance 
Year 2007 2008 2009 2010 2011 2012*
*Estimate SOURCE: ANNUAL REPORT AND IBISWORLD

Revenue ($ million) 42.5 48.7 71.8 94.3 110.0 140.0

(% change) 29.2 14.6 47.4 31.3 16.6 27.3

NetIncome ($ million) 9.6 5.8 6.8 8.5 10.0 14.6

(% change) 540.0 -39.6 17.2 25.0 17.6 46.0

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MajorCompanies

OtherCompanies continued

back the voice recordings using headsets and foot pedals and either transcribe the recorded voice or edit

the document created by the BeyondTXT speech-recognition tool to create electronic documents.

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OperatingConditions 
CapitalIntensity
Level  The level of capital The Document Preparation Services industry requires a low level of capital investment. Minimal capital costs make this an attractive industry for small players and non-employers, many of which work on a part-time basis out of their homes. There are also some associated savings on their office space requirements, maintenance and rental costs. The use of technology like voice-to-text transcription and voice-recognition software has increased during the past five years. Still, the industry remains labor intensive in spite of the increasing use of laborsaving technology. The industry’s labor intensity is high due to the required manual input throughout the document preparation and

CapitalIntensity | Technology&Systems | RevenueVolatility Regulation&Policy | IndustryAssistance

Capital units per labor unit 0.5 0.4 0.3 0.2 0.1 0.0 Economy Administration, Document Business Support & Preparation Waste Mgmt. Services Services
SOURCE: WWW.IBISWORLD.COM

Capital intensity

intensity is Low

Dotted line shows a high level of capital intensity

transcription service process. While computer equipment and software has improved labor productivity, it has not

ToolsoftheTrade:GrowthStrategiesforSuccess
NewAgeEconomy Recreation,PersonalServices, HealthandEducation. Firms benefit from personal wealth so stable macroeconomic conditions are imperative. Brand awareness and niche labor skills are key to product differentiation. InvestmentEconomy Information,Communications, Mining,FinanceandReal Estate.To increase revenue firms need superior debt management, a stable macroeconomic environment and a sound investment plan.

CapitalIntensive

LaborIntensive

TraditionalServiceEconomy

Document SpecialistDoctors Primary Care PreparationServices Doctors Copier&OfficeEquipmentWholesaling 
Printing PrintingServices

OldEconomy AgricultureandManufacturing. Traded goods can be produced using cheap labor abroad. To expand firms must merge or acquire others to exploit economies of scale, or specialize in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM

WholesaleandRetail. Reliant on labor rather than capital to sell goods. Functions cannot be outsourced therefore firms must use new technology or improve staff training to increase revenue growth.

ChangeinShareoftheEconomy

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OperatingConditions

CapitalIntensity continued

replaced the skilled labor requirements. IBISWorld estimates that for every dollar spent on the use and replacement of buildings and equipment, industry

operators will spend $12.95 on wages in 2012. By 2017, laborsaving technology is expected to push down wages to $11.59 per every dollar spent on depreciation.

Technology &Systems
Level  The level of

Technology Change is Medium

The Document Preparation Services industry has experienced medium technological and systems changes during the past five years. Competitive factors like price and quality have caused firms to invest in speech recognition capability, electronic security, hardware redundancy (to protect against data loss) and data integration. Technology improvement, which helps improve turnaround time and accuracy, has been particularly prevalent for medical transcription services (MTS). Technology change and the proliferation of broadband internet connections have also caused an increasing amount of work to be

performed internationally. With the exception of the MTS segment, firms do not usually develop any significant technology or system that is particularly unique or not available “off the shelf” in prepackaged form. Nevertheless, the industry is heavily reliant on computer hardware and software and communications technologies. Nevertheless, these areas are subject to considerable technological change, brought about by advances in microchip, and information and communication technologies. Accordingly, industry players need to keep abreast of trends and invest in training.

RevenueVolatility
Level  The level of

Volatility is Medium

Revenuevolatility*(%)

A higher level of revenue volatility implies greater industry risk. Volatility can negatively affect long-term strategic decisions, such as the time frame for capital investment. When a firm makes poor investment decisions it may face underutilized capacity if demand suddenly falls, or capacity constraints if it rises quickly.

VolatilityvsGrowth
1000 100 10 1 0.1

Hazardous

Rollercoaster

DocumentPreparation Services
Stagnant
–30 –10 10 30 50

BlueChip
70

Fiveyearannualizedrevenuegrowth(%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM

The Document Preparation Services industry has a moderate level of revenue volatility. In the five years to 2012, year-on-year revenue changes averaged 5.5% per year. During the

period, revenue has grown by as much as 4.8% in 2007 and declined by as much as 8.8% in 2009. These highs and lows increased industry volatility during the past five years. The

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OperatingConditions

RevenueVolatility continued

industry’s revenue volatility generally increases during recession because some of the industry’s markets are sensitive to economic activity, particularly in the service industries. Medical transcription services,

however, are expected to increase as a proportion of revenue during the next five years as the healthcare sector continues to grow. This stability is expected to reduce industry volatility during the five years to 2017.

Regulation&Policy
Level&Trend  The level of

Regulation is Medium and the trend is Steady

Although there is little regulation that specifically applies to this industry, the provision of medical transcription services is heavily regulated. Medical transcribers must understand the Health Insurance Portability and Accountancy Act (HIPAA) of 1996, and other regulations governing, among other things, the privacy of information. HIPAA requires the adoption of standards for the exchange of health information in an effort to encourage the overall administrative simplification and

to enhance the effectiveness and efficiency of the healthcare industry. In addition to requirements under HIPAA, there are numerous other federal and state laws and regulations that regulate the privacy of an individual’s health information. For example, the Health Information Technology for Economic and Clinical Health Act of 2009 strengthened the enforcement of HIPAA’s rules. It also extends some of the privacy standards covered by HIPAA to business associates of covered entities.

IndustryAssistance
Level&Trend  The level of

There is no industry specific government assistance provided to this industry.

Industry Assistance is None and the trend is Steady

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KeyStatistics 
IndustryData
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SectorRank EconomyRank Revenue ($m) 3,840.7 4,057.9 4,145.3 4,311.1 4,519.9 4,312.0 3,932.7 4,057.7 4,247.0 4,463.2 4,640.8 4,861.3 5,039.4 5,276.6 5,415.0 22/26 605/704 Industry ValueAdded Establish($m) ments 2,604.7 46,445 2,709.9 48,243 2,825.0 49,244 2,973.9 51,515 3,108.7 55,741 3,091.1 59,508 2,788.3 55,622 2,856.6 54,895 2,968.7 54,861 3,097.5 56,875 3,211.4 58,748 3,339.7 61,089 3,457.0 63,080 3,582.8 65,342 3,670.0 66,650 20/26 5/26 487/704 104/703 Enterprises Employment 46,293 80,752 48,106 85,932 49,120 86,785 51,406 88,973 55,647 94,770 59,308 99,409 55,412 99,187 54,698 99,004 54,659 98,386 56,683 100,895 58,567 103,663 60,912 105,987 62,892 109,432 65,166 112,086 66,500 114,327 5/26 16/26 95/703 292/704 Exports ---------------N/A N/A Imports ---------------N/A N/A Wages ($m) 1,878.8 1,943.0 2,041.5 2,159.1 2,254.4 2,276.2 2,045.0 2,089.7 2,166.0 2,253.9 2,334.3 2,420.9 2,504.6 2,585.5 2,645.0 19/26 416/704 Domestic Demand N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A TotalHealth Expenditure ($ trillion) 1.8 1.9 2.0 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3.0 3.2 3.4 3.6 3.9 N/A N/A

AnnualChange
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SectorRank EconomyRank Revenue (%) 5.7 2.2 4.0 4.8 -4.6 -8.8 3.2 4.7 5.1 4.0 4.8 3.7 4.7 2.6 7/26 119/704

Industry EstablishValueAdded ments (%) (%) 4.0 3.9 4.2 2.1 5.3 4.6 4.5 8.2 -0.6 6.8 -9.8 -6.5 2.4 -1.3 3.9 -0.1 4.3 3.7 3.7 3.3 4.0 4.0 3.5 3.3 3.6 3.6 2.4 2.0 8/26 4/26 217/704 88/703

Enterprises Employment (%) (%) 3.9 6.4 2.1 1.0 4.7 2.5 8.3 6.5 6.6 4.9 -6.6 -0.2 -1.3 -0.2 -0.1 -0.6 3.7 2.6 3.3 2.7 4.0 2.2 3.3 3.3 3.6 2.4 2.0 2.0 2/26 11/26 74/703 180/704

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 N/A N/A

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 N/A N/A

Wages (%) 3.4 5.1 5.8 4.4 1.0 -10.2 2.2 3.7 4.1 3.6 3.7 3.5 3.2 2.3 4/26 122/704

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 N/A

TotalHealth Expenditure (%) 5.6 5.3 10.0 4.5 4.3 4.2 4.0 3.8 3.7 7.1 6.7 6.3 5.9 8.3 N/A N/A

KeyRatios
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 SectorRank EconomyRank IVA/Revenue (%) 67.82 66.78 68.15 68.98 68.78 71.69 70.90 70.40 69.90 69.40 69.20 68.70 68.60 67.90 67.77 6/26 25/704

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 N/A N/A

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 N/A N/A

Revenueper Employee ($’000) 47.56 47.22 47.77 48.45 47.69 43.38 39.65 40.99 43.17 44.24 44.77 45.87 46.05 47.08 47.36 22/26 679/704

Wages/Revenue (%) 48.92 47.88 49.25 50.08 49.88 52.79 52.00 51.50 51.00 50.50 50.30 49.80 49.70 49.00 48.85 6/26 34/704

Employees perEst. 1.74 1.78 1.76 1.73 1.70 1.67 1.78 1.80 1.79 1.77 1.76 1.73 1.73 1.72 1.72 26/26 647/703

AverageWage ($) 23,266.30 22,610.90 23,523.65 24,266.91 23,788.12 22,897.32 20,617.62 21,107.23 22,015.33 22,339.07 22,518.16 22,841.48 22,887.27 23,067.11 23,135.39 24/26 602/704

Shareofthe Economy (%) 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 N/A 20/26 487/704

Figures are inflation-adjusted 2012 dollars. Rank refers to 2012 data.

SOURCE: WWW.IBISWORLD.COM

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Jargon&Glossary

IndustryJargon

BABYBOOMER The demographic of Americans born between 1946 and 1964, accounting for a major proportion of the population. MEDICALTRANSCRIPTIONSERVICE(MTS) A service with operators dealing in transcription of medical documents or converting voice-recorded reports into text.

OUTSOURCING To procure goods or services under contract with an outside supplier. Outsource is always written as one word without a hyphen. VOICE-RECOGNITIONTECHNOLOGY Technology that transcribes spoken words to on-screen text.

IBISWorldGlossary

BARRIERSTOENTRY Barriers to entry can be High, Medium or Low. High means new companies struggle to enter an industry, while Low means it is easy for a firm to enter an industry. CAPITAL/LABORINTENSITY An indicator of how much capital is used in production as opposed to labor. Level is stated as High, Medium or Low. High is a ratio of less than $3 of wage costs for every $1 of depreciation; Medium is $3 – $8 of wage costs to $1 of depreciation; Low is greater than $8 of wage costs for every $1 of depreciation. CONSTANTPRICES The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using 2012 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. DOMESTICDEMAND The use of goods and services within the US; the sum of imports and domestic production minus exports. EARNINGSBEFOREINTERESTANDTAX(EBIT) IBISWorld uses EBIT as an indicator of a company’s profitability. It is calculated as revenue minus expenses, excluding tax and interest. EMPLOYMENT The number of working proprietors, partners, permanent, part-time, temporary and casual employees, and managerial and executive employees. ENTERPRISE A division that is separately managed and keeps management accounts. The most relevant measure of the number of firms in an industry. ESTABLISHMENT The smallest type of accounting unit within an Enterprise; usually consists of one or more locations in a state or territory of the country in which it operates. EXPORTS The total sales and transfers of goods produced by an industry that are exported. IMPORTS The value of goods and services imported with the amount payable to non-residents.

INDUSTRYCONCENTRATION IBISWorld bases concentration on the top four firms. Concentration is identified as High, Medium or Low. High means the top four players account for over 70% of revenue; Medium is 40 –70% of revenue; Low is less than 40%. INDUSTRYREVENUE The total sales revenue of the industry, including sales (exclusive of excise and sales tax) of goods and services; plus transfers to other firms of the same business; plus subsidies on production; plus all other operating income from outside the firm (such as commission income, repair and service income, and rent, leasing and hiring income); plus capital work done by rental or lease. Receipts from interest royalties, dividends and the sale of fixed tangible assets are excluded. INDUSTRYVALUEADDED The market value of goods and services produced by an industry minus the cost of goods and services used in the production process, which leaves the gross product of the industry (also called its Value Added). INTERNATIONALTRADE The level is determined by: Exports/Revenue: Low is 0 –5%; Medium is 5 –20%; High is over 20%. Imports/Domestic Demand: Low is 0 –5%; Medium is 5 –35%; and High is over 35%. LIFECYCLE All industries go through periods of Growth, Maturity and Decline. An average life cycle lasts 70 years. Maturity is the longest stage at 40 years with Growth and Decline at 15 years each. NON-EMPLOYINGESTABLISHMENT Businesses with no paid employment and payroll are known as non-employing establishments. These are mostly set-up by self employed individuals. VOLATILITY The level of volatility is determined by the percentage change in revenue over the past five years. Volatility levels: Very High is greater than ±20%; High Volatility is between ±10% and ±20%; Moderate Volatility is between ±3% and ±10%; and Low Volatility is less than ±3%. WAGES The gross total wages and salaries of all employees of the establishment.

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