MIDAS SHARE THE ORDERS: Zoo Digital proves the perfect Netflix sequel

Netflix has had a rollercoaster year. Once the darling of the US stock market, shares fell when subscription rates went into reverse in early 2022.

Now they are on the rise again. Last week, the firm reported a record 223 million paid subscribers, with several million more expected to sign up by the end of the year.

Netflix was once the only streaming service in town. Today, competition is fierce as Disney+, Apple TV+, Amazon Prime and many others compete for viewers’ wallets.

Increasingly, they do this by creating their own shows, hits like Squid Game or Ted Lasso that are only available on the network that created them but are broadcast to subscribers around the world.

Zoo Digital helps make it all happen. The firm has pioneered the use of software to translate movies and series into dozens of different languages ​​so that audiences from Kathmandu to Sao Paulo can watch whatever they like in their local language.

CEO Stuart Green has assembled a network of 10,000 freelance language professionals, including subtitlers, dubbing experts, voice actors and directors. Using Zoo’s kit, they can work from home with just a computer, an internet connection and, in the case of actors, basic recording equipment.

The ease of the process – and the quality of the work – has allowed Sheffield Zoo to forge relationships with all the streaming giants, including Disney+, which is behind the wildly popular Welcome to Wrexham series, which is now available in dozens of languages.

Zoo said last month that business was brisk, with first-half sales expected to rise almost 90 per cent to $51m (£45m) and plenty of new contracts on the books.

Brokers expect full-year revenue of $95 million in the year to March 2023, with profits more than doubling to $6.9 million and a further big increase planned for the year ending March 2024. Greene is also ambitious, targeting annual sales of $400 million by 2030, with sharp growth in profits. The goal seems quite achievable. The big streaming beasts are fighting to make the best shows, and the more languages ​​they translate into, the more subscribers they can reach.

Independent analysis shows that the market for translation and localization services for media companies is set to double to $3 billion a year by 2030, with Zoo leading the way.

The Midas Verdict: Midas recommended Zoo in January 2021 when shares were trading at 79p. They are now at £1.43 and brokers believe they should reach £2.50 within the next year or two. At least the stance is strong.

Bidding for: PURPOSE Ticker: ZOO Contacts: zoodigital.com or 0114 241 3700