Will “Virtual YouTuber” Business Succeed In Korea, As Did In Japan?
Japanese economic newspaper Nikkei’s industry-focused publication, “Nikkei Industry News,” introduced two Japanese venture capital (VC) firms that had the largest profits from IPOs in 2022 on February 15. They are Legend Capital, whose parent company is in China, and Japanese VC Skyland Ventures.
The two firms invested in a single company, the Japanese “virtual YouTuber” specialized company, “AniColor.” Last year, when the company went public and hit it big, the two VCs made investment profits of ¥16.6 billion (approximately 160 billion won) and ¥10.4 billion (approximately 100 billion won), respectively.
There are two main reasons why the virtual YouTuber industry has succeeded. Firstly, although it is a creator-centric industry, being affiliated with an “agency” like an entertainment agency gives it significant value. In Korea, even being affiliated with large planning agencies such as HYBE, SM, JYP, and YG can help idols achieve some success, and in the same way, being associated with “Nijisanji” and “Hololive” is also a significant factor for virtual YouTubers. This compensates for the weakness of the MCN model, which tends to decrease the bargaining power of creators as they grow.
Secondly, the subculture industry is fundamentally a global business. The Japanese market itself is significant, but it also has a rich fan base in English-speaking countries, China, Southeast Asia, etc. It overlaps with fans of Japanese anime and games. In the case of Nijisanji, 20% of the total YouTube views come from outside Japan. According to AniColor, virtual YouTubers are expected to capture part of Japan’s domestic anime market of ¥1.4 trillion and the global anime market of ¥1.3 trillion, and they are even expanding into the music and concert markets.
As the global virtual YouTuber market is growing rapidly in 2022, domestic companies are also making various attempts. The most representative of these is Kakao Entertainment.
However, what is popular in the domestic virtual YouTuber market is not companies-led virtual YouTubers but creator-led ones. Virtual YouTubers belonging to “Isekai Idol,” created by famous male streamer “Uwakguk,” and “Stellalive,” created by female streamer “Kang Ji,” are among the top-ranked in terms of viewership. This means that the influence of existing streamer-centered companies is still strong, and the planning and capital of large corporations do not guarantee success yet.
It has been pointed out that there are limits to the narrow market in Korea. An industry official said, “Looking only at the domestic market, female virtual YouTubers can only make money with 1-2 teams other than Isekai Idol, and men can only make money with about one team of ‘Revolution Heart’,” and said, “If they fail to succeed in overseas markets including Japan, they will be nothing more than a red ocean.”