The Vtuber Industry: Corporatization, Labor, and Kawaii

Why vtubers have become a hot investment vehicle, and why the space is already consolidating.
An anime
Gawr Gura playing Maneater

“I do play games, I promise I play games. Just not this type of game.” A tiny animated girl wearing a shark hood named Gawr Gura demurs on stream as she maneuvers a 3D shark through the ocean of the video game Maneater. “I wanted to play this game so I could wow everybody with my shark skills but all I’ve done is make a fool of myself.” Her voice sounds dejected, but even her model slumps downward, her eyes closed. For a vtuber (virtual YouTuber) who streams every week as a cheery shark-girl, the moment is oddly revealing of the person behind the avatar.


Gawr Gura is just one of over 60 anime-faced streamers under Hololive, the virtual talent agency wing of the Japanese tech company Cover Corporation. With its animated roster of characters, all with backstories and unique designs, Hololive is Disney; if Disney hired Mickey Mouse to stream Minecraft for several hours a day. 

While vtubing as a phenomenon has grown sharply in popularity here in the United States within the last couple of months due to Hololive debuting several new vtubers who speak English on stream, it has existed in one way or another for at least a decade, with various vloggers on YouTube or streamers using face animation technology to hide their actual faces. However, vtubing as most people would know it started in Japan in 2016 with Kizuna AI, a character created by Activ8. Hololive and another Japanese agency, Nijisanji (owned by Ichikara, Inc.), whose creations now dominate much of the “corporate” vtubing space, started in late 2017, inspired by the success and attention that Kizuna AI generated. 

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While anyone can become a vtuber on their own with enough time or money,  companies like Cover or Ichikara take up an outsized portion of the interested audience on streaming sites. (Cover started out as a company in the AR and VR business, but moved into the virtual talent sector; Ichikara is a startup designed to support their virtual talent) In 2020, Cover Corporation received 700 million yen (US$6 million) in venture capital funding in order to expand into new international markets like Indonesia and the United States. With these much larger resources and workforce, they can develop IP, market it on social media, create merchandise, produce music and even put on live “3D” events. In a bid for everyone’s finite attention, vtubing talent agencies can operate at a scale that individual “indie” vtubers can’t. They also have set the terms of engagement for vtubing as an industry rather than a hobby.


Cover and Ichikara’s method operates at scale: build a relatively comfortable stable of proprietary characters, and hire the performers to make them come to life on stream through a combination of auditions and private hiring. Through vtubing, these companies have harnessed the entertainment value of both streaming and J-pop idol groups. And harnessed they have, as streaming monetization and even advertising sales can earn up to hundreds of thousands of dollars a year. However, all of this money comes along with all of the weird parasocial engagement and labor issues that those two industries regularly deal with. 

The aforementioned problems are also exacerbated by the fact that vtuber companies enforce quite a lot of secrecy around what they do. While it is standard in vtubing to keep all details around performers’ identities behind closed doors for safety reasons, there’s also weird blank spaces around internal company operations. Because of this lack of publicly available information, their professional discretion may be hiding any number of labor problems.

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Concrete information about how the business of vtubing works is fleeting, but exists. Hololive’s rapid rise outside Asia compared to its competition has made it a valuable source of insight into how vtubers operate. Hololive’s Kiryu Coco, who debuted in 2019, is one of the company’s largest earners via YouTube Super Chats. Viewers pay real money to highlight their messages in chat (to a maximum of $500 US) to stand out in the sea of comments or to be read on one of many regular Super Chat reading streams -- something traditional streamers don’t typically do. According to Playboard’s Super Chat worldwide earning statistics for 2020, vtuber fans are more than happy to donate absurd amounts for brief attention. Super Chats form a cycle where fans get to hear their favorite vtubers acknowledge them with a potentially funny response that gets immortalized in popular clip videos and then routes back to the vtuber’s pseudo-canon and subscriber count. And it works. Kiryu Coco, along with several other Hololive idols, dominate the charts with millions of dollars in combined estimated earnings.


How that money makes it to the streamer is largely obscured by the glare of Hololive’s idol sheen. But when you have a large roster of streamers talking online for many hours a week, things slip. According to Coco, 30 percent of the Super Chat money goes to Google and the remaining 70 percent is split between Cover and the streamers. That pay goes on top of the streamers’ cut of paid YouTube memberships and the base pay they all reportedly receive. But streaming is about numbers, and only numbers that platforms like YouTube and Twitch deem valuable enough to pay you for. Although there’s a level of guaranteed eyes when you’re streaming as a cute cat or sheep girl, Hololive vtubers and therefore Cover at large could still be subject to the volatility of streaming as a job for everyone else: long hours and little pay. The pay is about as opaque as the rest of Cover's business. Many Hololive streamers work full-time and participate in ad deals with companies like Nissin, while other streamers balance streaming as a side job with other work or school.

Knowing this, “expected” streaming behavior from Hololive vtubers is a mystery. They all adhere to weekly schedules where the time investment varies wildly. One streamer might “clock out” after two hours, another might marathon for 10. And these schedules can repeat throughout the week with special “collab” and karaoke streams in between. Hololive’s presence appears largely hands off. Although the streamers mention having managers, it seems that they determine the length and frequency of their streams on their own. Quotas, limitations, and best practices are never apparent. Like with many streamers, vtubing runs on a willingness to sit in front of a keyboard and camera and talk (mostly as characters) for hours on end; your body is the job.


To work as a Hololive vtuber is to be a mascot. The vtubers and their likenesses are leveraged as both talent and product much like traditional idols. Cover is in the business of selling uncomplicated characters played by uncomplicated people. In its short history, Hololive has had moments where it failed to protect its talent when that illusion was threatened. Several vtubers, like Mano Aloe, Hitomi Chris, and Yozora Mel, have been victims of harassment. Information about these instances is scarce, but it’s clear that Cover wasn’t prepared to protect their talent, despite running the type of business where parasocial relationships from fans can easily explode into targeted campaigns. Only after a series of incidents which ended in the “graduation” (a term borrowed from J-pop idol culture) or end of the job for the affected vtubers, Cover said it would take legal actions against harassers and introduce a reporting system. This reaction underlines a key question about the capability of a tech company that suddenly shifted to an idol agency, and the ethics of the corporate vtubing industry in general. 


Cover has already changed its approach to harassment of its talent. Instead of cutting ties, it enacted damage control when its vtubers angered Chinese viewers. In September, Coco and Akai Haato streamed themselves reviewing viewer analytics per region where they both brought up Taiwan in the discussion. Bilibili users began flooding the vtubers’ channels with reports and severe harassment, leading Cover to respond with three week suspensions for both streamers. In the English statement, Cover said they were punished for divulging “confidential YouTube channel analytics information.” In the Chinese statement on Bilibili, however, Cover added that it supports the One China policy. Cover quickly addressed the discrepancy in the statements, saying that “we decided to adapt the contents of our statement and the manner of its release accordingly.” The company apologized and said it would create a “Compliance Committee” to avoid this error in the future, as well as start internal training for what it's vtubers can and cannot talk about.

Coco and Haato’s flub had lasting consequences for Hololive China, a separate group within Hololive. The six members saw a rush of harassment, reports, and apparent boycotting on Bilibili, which led Cover to disband the group entirely. According to some of the members, the group was notified of the closure early on and were allowed to keep their models to stream elsewhere. As is custom with vtuber graduations, all of the members have had their social media accounts wiped or made inactive. None of them have reappeared at the time of this writing.


It’s hard to be surprised at Cover’s response to this when so much about vtubing is still new. Once again it wasn’t prepared to handle the consequences of operating a business around global, public personas. It has only shown it can react, which raises the question about how many scrapes and bruises (or worse) will its vtubers suffer as it drags them forward. Corporate vtubing doesn’t look a lot better than independent vtubing if the person behind the avatar is just as vulnerable.

As Cover tries to figure out this new form of business, its talent gets treated like products that it can pull off of store shelves and replace in a few months. The secrecy around the operation allows them the power to appear generous when we don’t have any specific information about what happened. While there’s precedent for collective action from the vtubers themselves like with the Nijisanji Resistance, most of what we see are solutions to problems explained to us by the company. There could be any number of issues that we don’t hear about because Hololive vtubers are largely barred from speaking with press or non-vtuber content creators.

This is why the closer that you get to Hololive and how it operates with regards to its talent’s well-being, the murkier it all becomes, which is largely ironic given that they spend so much time being publicly viewed. We aren’t sure of anything that most people would consider to be important knowing about the job, which is fraught because streaming is still a job, one that requires oversight and incurs tons of risks. 

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Even if the industry were remarkably transparent, the performers themselves are still beholden to tech corporations. Corporations only are ever as good as they feel like being, with many tech companies falling well short of that mark on a good day. While Cover, Ichikara or any of the other fledgling vtubing companies may not have the juggernaut status of other media corporations that have been around for much longer, it’s clear that we are already in the midst of watching streaming talent and platforms grow, with millions of dollars in capital behind them.

The dynamic changes because the entertainment product is the bouncing anime girl in front of the stream, not the performer themselves. This diverges from traditional streaming, where the value comes from the person being the brand themselves and ostensibly making all of their own decisions. Ninja and Shroud are not owned by Twitch, they bring value to it as a platform. When they decided to leave Twitch, that money went with them. This is obviously not the case with vtubers, whose performance feels largely interchangeable so long as the output remains consistent. While having the security of a paycheck and anonymity as a streamer is nice, the fact that your value is largely interchangeable is a huge drawback. Of course, that's also what makes the format so appealing to the companies investing in it: at last, talent can be fungible.

Cover or Ichikara have not responded to requests for comment.

Japanese translation assistance provided by Anne Lee.