Casual Talk on Vtubers: Business Models and Development @2024

From a young age, I have always understood idols from a commercial perspective without investing much emotion in them. However, as a tech enthusiast and internet user, I naturally began to study the fusion of technology and idols in Vtubers, paying attention since the era of Kizuna AI. While not particularly obsessed, I found this new mode of idols very interesting.

Time flies, and Vtubers have become a burgeoning business. In Hong Kong, several Vtubers have emerged, and even brands have started collaborating with them. Occasionally, I watch local Vtubers’ cover songs and videos, which have matured significantly compared to a year or two ago, with a notable increase in viewership. To avoid becoming outdated, one must keep up with the times.

Vtuber stands for Virtual YouTuber, consisting of two parts: the “Naka no Hito” (the person performing) and the “Avatar” (the appearance). The Naka no Hito is the performer, while the Avatar is the visual representation, which often comes with different settings. It doesn’t necessarily have to be human; it can be a demon, dragon, or other non-human entities. The age can be arbitrary, with some using settings of even hundreds of years old.

Avatars are generally divided into 2D and 3D, with the latter offering more dynamic movements, making stage performances easier but at a higher cost. Typically, a Vtuber is bound to a specific Naka no Hito, though there are instances of changing the performer, which usually end in failure. The identity of the Naka no Hito is generally kept secret and may not necessarily be an amateur; they could be YouTubers, voice actors, or actors.

Technologically, with advancements, basic Vtuber effects can now be achieved using a smartphone. However, creating a beautiful dynamic avatar requires precise motion capture devices and substantial investment, reaching tens or hundreds of thousands of Hong Kong dollars.

The operational model of Vtubers is quite similar to underground idols, mainly divided into corporate (managed by companies with systems), individual (self-employed), and group (alliances of individuals). Commercially, Vtubers are a blend of underground idols and YouTubers, with primary revenue sources including fan donations, advertising fees, endorsement/appearance fees, event performance fees, and product sales, similar to influencers or early bloggers.

Essentially, apart from using technological avatars, there’s not much difference between Vtubers and traditional idols. Both involve performers playing pre-set roles, though Vtuber settings tend to be more exaggerated. Unlike traditional idols striving for realism, Vtubers often use obviously fictional settings, such as the popular local Vtuber Mya, who is set as a five-year-old panda girl.

The charm of Vtubers lies in their diverse content styles and interaction with viewers. The personal charisma of the Naka no Hito is crucial. Compared to the limited interaction of underground idols, Vtubers’ live streams and social media nature enhance fan participation and engagement. While the settings and avatars are fictional, the interactions and emotions are direct and real. The avatar provides a sense of distance and safety between fans and the Naka no Hito, which might be the biggest appeal of Vtubers. Of course, there are cases where the Naka no Hito turns out to be an older man, but whether that matters is up to the viewers, much like traditional idols who might be packaged as good people but are actually scum.

In Japan, there were about 1,000 Vtubers in 2018, surpassing 10,000 by 2020, and over 20,000 by 2022, growing at a staggering rate. Recently, songs sung by Vtubers have also gained significant popularity. For instance, the Japanese hit song “粛聖!! ロリ神レクイエム☆ / しぐれうい” accumulated over 90 million views on YouTube in just over four months, rivaling popular new tracks by major artists.

Japanese Vtubers rank high globally in Super Chat (a donation feature). In the 2023 Super Chat Ranking, Koyori ch. 博衣こより ranked third, earning over HKD 4 million. The famous virtual idol agency hololive Production’s parent company, Cover, went public in Japan in 2023. According to Cover’s latest financial report, revenue from July to September 2023 was approximately JPY 12.3 billion, with a year-to-year growth of 58%, which is astounding.

According to a recent survey by the Yano Research Institute, the majority of Japanese Vtuber fans are aged 15-24, accounting for about 29%. Those aged 40 and above make up only about 6%, indicating that Vtubers belong to the younger generation and are a trend for the future. Vtubers are increasingly emerging across various regions in Asia. While they may not become absolutely mainstream, they are undoubtedly an unmissable trend.

Even if live streams aren’t preferred, watching Vtubers play games or cover songs can be quite entertaining. The author admits not being an expert on Vtubers and welcomes additional information or corrections from others.