4 years ago, I wrote a blog post on the VTuber scene. Since then, I’ve learned a lot. Let’s go through the old thing once more. I will go through the old post chronologically, but putting the section on umbrella brands (Hololive, Nijisanji) at the end, because… well. If you have paid attention to the scene, you’ll know why.
I wrote that the benefits of VTubers are full privacy (in principle) while maintaining facial expressions and having an more-interesting-than-average brand.
All of these things principally are still true. If anything, the facial expression bit has increased a lot, both hardware and software has become better and more affordable. I also have seen the models themselves improve in recognizability, especially among independent VTubers. While Chibidoki’s old model was somewhat easily confused with… any pink chibi girl, really, her new ones are a lot more distinct and, well, “deranged”, unique to her.
Last time I wrote that formats matter, with non-game and non-just-chatting streams having a big future ahead of them. This has proven true, with more new formats like cooking shows (Onigiri) and straight-up IRL streams becoming more prevalent among VTubers. As it turns out, being a 2D cardboard cutout is quite limiting in what you can do as content, and being able to switch between 2D, 3D and IRL depending on content has proven to be quite an interesting mix.
Highlights and clips still matter immensely, they certainly do for my personal consumption of this content as I no longer have the time to watch streams for hours on end. Interestingly, there doesn’t seem to have been a major shift in the implement clips on official channels. This effort remains almost entirely fan-driven.
The streaming platform market has changed immensely. Back when I wrote the blog, there was a 4-way race between Amazon (Twitch), Google (YouTube Gaming), Microsoft (Mixer) and Facebook (FB Gaming) to attract talent and gain dominance. One could say it was the only time any of these platforms have paid talent fairly. Today, all of these companies have gotten bored of streaming: Microsoft shut down Mixer, Amazon is shutting down Twitch in areas they deem too expensive to serve, and generally trying to distribute computing load onto the streamers rather than themselves, Facebook seems to bumble around aimlessly as the Metaverse wasn’t the next big thing they hoped it would be, and Google shut down the “gaming” bit of YouTube Gaming, though YouTube live continues to receive technically perhaps impressive but ultimately extremely boring features. The only other platform of note is Kick, a streaming site with casino backing specifically targeting gambling streamers and hoping to get the masses gamble more. Previously, YouTube was technically the best platform to stream to with Twitch being culturally the best one; today, it seems like YouTube is the only platform to stream to which has any hope of surviving for another 5 years.
Sexuality remains a massive draw to the VTubing scene, and the entirety of anime-esque content for that matter. Previously I wrote that I found this an easy, yet effective way to generate interesting content; today it feels like “empty calorie fast food”. That is to say, even in cases where “haha booba funni”, it no longer feels like meaningful content I want to engage with. That is more of a comment on myself than it is on the content, but I do wonder: What if anime-esque content wasn’t this horny all the time? What if Goddess of Victory: Nikke, which I am assured has an amazing story, actually was a story-driven game, rather than an ass jiggle simulator designed to pull money out of your pocket so you can watch more asses jiggle?
There has been not much change in VTubers typically posting daily and live content. Again, not something bad per se, but worth noting that almost none do anything else. Perhaps this explains the incredible rise of Filian, who outside of organizing the VTuber awards also posts 10-20 minute videos on her channel once or twice a week.
And now for the section that I promised in the beginning:
Umbrella brands and broken promises
I wrote previously that umbrella brands are immensely powerful. This is still true; Hololive has an amazingly strong pull as a brand. I had criticized Nijisanji last time for not having as strong of an umbrella brand, both due to a wider focus and talent pool, and some more technical issues. When I wrote that blogpost, I got a lot of pushback on that. But looking back at that – I was right. And holy fucking shit do I wish I wasn’t.
Nijisanji went public in 2022. At the time, they had 107 VTubers (or, as we in the showbiz say: talent), with an excellent retention rate of 97%, and set out with lofty goals:
Today, Nijisanji would have 257 talent in total, except a quick counting on the Wikipedia shows that 81 left the company or have been on hiatus for years. Which leaves us with 176 still in the company, and a retention rate of 68.5%. Again, this is down from 97% retention.
From talent who quit or got forced out, horror story after horror story are brought to light: Unpaid invoices, unpaid taxes, extremely one-sided contracts, workplace abuse, a general lack of interest from the company into talent, a lack of funding, prohibitions to develop the content further, and much, much more. Nijisanji is being labeled a “Black company“, a shady sweatshop, today.
Nijisanji is trying to control the damage the same way as any failing company: By buying back stocks. 1 billion yen they already spent on stock buybacks in the first half of January 2024, with another 1.5 billion yen being promised for later. And despite that, their stock price has plummeted from an all-time high 6500 yen per share in late 2022, to almost an all-time low of 2100 yen per share today.
And while I can’t claim that I fucking called it, I have seen it before. I even mentioned it in my previous post:
These umbrella brands are fairly rare on YouTube these days. For me, only Machinima comes to mind.
And Nijisanji is following Machinima’s playbook almost to a T.
Machinima is one of the earliest multi-channel networks. They got an umbrella brand going, got a lot of creators on it (5000!), had shitty, one-sided perpetual contracts, wanted and eventually reached the big leagues when they got bought by Warner Bros, and collected massive profits throughout as they would take 40% of their partners’ income without actually doing all that much in return. They went bust in 2019, when YouTube started tightening quality requirements for MCNs.
Nijisanji’s talent won’t be so lucky. Their identity is stuck with the company, and as they avoided the MCN framework, there is no YouTube which can swoop in. There also is no sign, externally anyway, that Nijisanji is set on changing in any way. Reading through their initial sales pitch to investors, they proudly present how their operating profit margin grew from 1 to 30% between 2020 and 2022, and their strongarm position in owning IP is listed as a “unique competitive” advantage of theirs.
And they have not issued any public statement that they changed their mind on that. On the contrary, when Dokibird / Selen Tatsuki quit Nijisanji and aired her grievances, they issued a statement that merely read: “The impact of this decision on our financial results will be negligible“.
Will Nijisanji die? Probably not. They can just keep firing managers until they’re profitable again. In their ideal world, they’d need 0 managers and have talent pay for them anyway. Should they die? Probably yes.
How to avoid a Nijisanji situation as talent
If you are talent, there are two ways of avoiding ending up in a Machinima/Nijisanji situation
- Join a talent-owned network. A “talent-first” network (like Vshojo, for my understanding) may align with your interests for quite a long time, but ultimately it’s not robust. There is a difference of a bunch of talent joining together and deciding “yeah, we really should have a full-time accountant take care of our finance” and a business saying “hey we now have an accountant, and your rates will go up to pay for that service you didn’t want”. Initially, Nijisanji may have been talent-first as well, but this can change when the owners and shareholders realize how much money there is to be had if talent just gets shafted. It’s not sustainable, but in any “passion-driven industry”, the shafting is too tempting to pass to many owners. Talent-owned networks guarantee that incentives will align long-term.
- Hire the services you actually need, as you need them. There’s no need for an MCN to provide you with accountants, assets etc, because you can hire someone to make them for you – or even make these things yourself. Assuming you’re actually making money from your activity, this actually is cheaper than a “30% of your income”-type revenue split quite early.
I’ll probably regret writing that here, but you can even hire me and my business partner to look at your channel to get it more marketable (but, please – have a more interesting idea for your channel than “I want to play games”. There’s a reason I mostly design Audacity these days)
Leo Wattenberg 