In the rapidly evolving landscape of digital entertainment, virtual YouTubers or more commonly known as VTubers have carved out a unique and growing niche that bridges anime culture with live streaming. Recently, we had the opportunity to have an exclusive interview with Motoaki Tanigo or better known as YAGOO, the CEO of COVER Corp, the parent company behind the wildly successful hololive production.

As one of the pioneers in the VTubing industry since its inception nearly eight years ago, YAGOO offers invaluable insights into the phenomenon’s explosive growth, current state, and exciting future prospects.

Breaking Down Barriers to Digital Stardom

One of the most revolutionary aspects of VTubing, according to YAGOO, is how it democratizes the path to becoming a digital entertainer.

“With VTuber, you get to act as a talent without showing your face, so regardless of your nationality or age, this system helps the young ones who are skilled and motivated to become a star,” YAGOO explains.

This accessibility has opened doors for talented individuals who might not otherwise find success in traditional entertainment industries. YAGOO emphasizes how VTubing offers an alternative pathway particularly valuable in competitive industries:

“In Japan it’s very difficult to become a voice actor and there are already many well-known VAs playing multiple famous roles, so it is not an easy job to get. That would be an equivalent to K-Pop artists in Korea. But with VTubers you can act like a voice actor or sing like a K-pop idol without showing your face.”

The AI VTuber Question

With the advancement of artificial intelligence, questions naturally arise about the potential competition between human-operated VTubers and fully AI-powered virtual personalities. YAGOO draws a clear distinction between these two models.

“I don’t think that AI VTubers can replace the business model of traditional VTubers. And that is because the fans of traditional VTubers are supporting them to make their dreams come true. But when it comes to AI VTubers, they don’t really have a dream, so I don’t think the fans would be the same,” he states confidently.

Instead, he envisions AI VTubers filling different roles in the digital ecosystem: “I think what we should anticipate for AI Vtubers is to become something like an NPC for games or something like a chatbot that you can talk to.”

Agency Evolution and Talent Retention

As the VTubing industry matures, agencies face the challenge of talent departure or “graduation” as it’s commonly called. YAGOO views this as a natural evolution.

“I think this trend is showing the fact that this VTuber business by individuals is becoming something like a commodity. And that is a good thing because it proves that the VTuber model has penetrated in this world,” he reflects.

For agencies to remain relevant, YAGOO emphasizes the importance of providing unique value: “What agencies need to do is to offer benefits to talents so that they would want to work with the agency. For example, we might be capable of holding big live concerts, and there’s much more.”

Regarding recruitment, he stresses the importance of long-term partnership: “I think we need to have a long term point of view because if talents decide to work with or do business jointly with an agency, the important thing is whether we can be a partner.”

The Rise in Popularity

When asked about why viewers increasingly choose VTubers over traditional streamers, YAGOO points to the growing global popularity of anime culture. 

“For one thing, I think this is coming from the growing audience of Japanese anime throughout the world. In the past 10 years, we’ve seen drastic expansion of the Japanese anime market overseas. Especially Gen Z who are the main viewer of such Japanese anime and watch YouTube regularly, so I think they are more compatible with VTuber culture as well.”

The COVID-19 pandemic also played a significant role in accelerating VTuber adoption: “During the pandemic, people were probably looking for ways to connect to each other. And I think we were able to benefit from that as well,” 

“VTubers are different from anime in the way that they do live streaming on YouTube and Twitch chat. And they can communicate with their fans or fans can communicate with each other if they like the same VTuber… I think that was very important for these people,” YAGOO noted.

Platform Strategy and Brand Collaborations

Despite hololive’s strong presence on YouTube, YAGOO doesn’t see platform concentration as a significant risk. “We don’t recognize a major risk, because it may seem that we’re focusing on a single platform, but we actually have accounts on YouTube, X, and Spotify and so forth. So if we feel that one platform is not serving enough, we may decide to refer our users to another platform.”

When it comes to brand collaborations, he acknowledges that some companies still struggle to understand the dual nature of VTubers:

“There are two features of VTuber. One is being an IP and the other is being an influencer. And people tend to focus more on the IP aspect and they feel more like collaborating with an anime producing company.”

To address this, COVER Corp takes an educational approach: “We try to introduce successful examples from Japan and other countries. And we try to bring in examples of a similar industry as the industry of the potential counterpart of collaboration.”

One standout example of successful VTuber collaboration is the partnership with the Los Angeles Dodgers:

“In this collaboration we were able to refer fans of the hololive to the baseball stadium. And I think we were able to demonstrate the possibility of collaboration with the VTuber for other baseball teams, for the teams of other sports. And I think it is very likely that we’ll be able to have a similar partnership in the future,” YAGOO shares.

According to him, the brands that benefit most from VTuber collaborations are those that can leverage both the IP and influencer aspects: “Those would be brands from the game industry, amusement facilities, baseball clubs, restaurants, landmarks, in short, we can send our fans and customers to these collaboration items, and we can also send them some collaboration goods or digital items for them to enjoy.”

The Future of VTubing: Technology and Global Expansion

Looking ahead, YAGOO sees technological advancement playing a key role in VTubing’s evolution.

“There is an evolution in the motion tracking technology, and even with a normal camera, there are solutions that give you high precision motion tracking. So if we can use that properly, maybe we’ll be able to do full body tracking for live streaming at home,” he explains.

Perhaps even more revolutionary is the potential of AI-powered real-time translation: “Another thing I can imagine is to have a real-time translation to a different language… it doesn’t just mean putting subtitles on, but it’s more like talking in his or her own tone of voice, but in a different language.”

This translation capability could further accelerate global growth, building on COVER Corp’s existing localization strategy: “We recruited local VTuber talents. And that means those VTubers do livestreaming in their own mother language, like we have talents in Indonesia and other English speaking countries.”

Holoearth and R&D Initiatives

When asked about Holoearth, COVER Corp’s virtual world project, YAGOO provides a brief update: “This is still under development aiming at the official launch. We have been gradually expanding the playable areas, but I think we’ll be adding many more features and functions.”

Regarding potential industry stagnation, YAGOO remains optimistic: “We are optimistic about the future trend because we believe the trend about XR, VR, and AR will continue to grow, and there will be more expansion of 3D online content including Holoearth along with other platforms like Roblox and Fortnite. These are favorable environments for VTubers.”

Nevertheless, he acknowledges the importance of continued innovation: “We are aware that we need to continue to catch up with such technological evolution and trends, so we have been focusing very much on our R&D activities.”

Building Community: The Online-Offline Connection

Perhaps most telling about COVER Corp’s vision is YAGOO’s emphasis on building community connections that span both digital and physical spaces:

“For VTubers, of course they do live streaming on YouTube, but that’s not only a place to meet with their favorite VTubers. They can go to live concerts or pop-up shops or stadiums if there is a collaboration. And I think those offline opportunities are critical.”

This community-building approach extends globally: “In the US, we currently have a pop-up open in L.A. at The Beverly Center through February 27. And also the Mori Calliope concert is happening this month, in L.A., at The Hollywood Palladium, on February 26, doors open at 6pm PT. So we would like to continue to explore opportunities in other countries as well to expand this kind of opportunity.”

YAGOO concludes with what he considers one of the most important lessons learned in the VTubing industry: “In the VTuber business, it’s extremely important to offer an online and offline opportunity to the community of fans. That is why we also offer a fan community application, Holo Plus. And that is also the reason why we offer trading card game services. It is not only for profit making, but we want the fans to have a place to interact with each other.”