Virtual celebrities: in-depth analysis of the tech and business behind the next generation of idols

Virtual celebs Imma, Kizuna AI and Lil Miquela

Virtual celebrities, virtual influencers, VTubers… Computer-generated celebrities have entered mainstream media, striking prestigious collaborations with luxury brands. Many have speculated about their true nature and impact on the world of entertainment, but very few speak about what’s really going on under the hood. What exactly is a virtual celebrity, how are they created and what business model do they follow?

Summary

  1. Virtual celebrities, virtual influencers… a couple of definitions
  2. The tech behind virtual celebrities: from traditional CGI to the early stages of AI
  3. How do virtual celebrities make money? Are virtual influencers really opening a new market?
  4. Living up to the hype: the challenges facing virtual celebrities

1. Virtual celebrities, virtual influencers… a couple of definitions 

The term “virtual celebrity” is a catch-all categorization of activities that overlap here. There are actually three fields getting conflated:

Virtual Idols

In order to better understand the entertainment business of virtual celebrities in Asia, we must keep in mind that an “idol” is manufactured and marketed for his or her appearance, attractiveness, and personality. They are not only singers, but also have a wide range of roles, such as acting, modeling, and appearing in variety shows. An idol’s main objective is generally speaking to entertain people. A “virtual Idol” is thus a virtual character created to entertain, some famous examples including Hatsune Miku from Japan and Luo Tianyi from China.

Virtual Idol Hatsune Miku “Miku with you” concert, China, 2019

This trend originated from Japan, which has a long history of virtual idols, the most famous being holographic pop star Hatsune Miku. Technically, Hatsune Miku is a program — a vocal synthesizer called Vocaloid, developed by Japanese software company Crypton Future Media. But it is in China that this trend really took off. The worship of ACG culture (Animation, Comics and Gaming) by Chinese youngsters has boosted an emerging industry in the country. Luo Tianyi is China’s most popular virtual idol: in June 2017, when she held her first offline concert in Shanghai, the tickets costing US$180 reportedly sold out in 3 minutes. She has 3 million fans on Weibo (similar to Twitter) and is adulated by teenagers from China’s expanding middle class families, who are pouring their money into that fandom.

Virtual streamers / VTubers

Virtual YouTubers (or VTubers) are streamers and vloggers (not limited to Youtube, contrary to what the name implies) who are represented by digital avatars that often look like anime characters. Famous examples are Kizuna AI or Barbie Vlogger.

Virtual YouTuber Kizuna AI on stream
Virtual YouTuber Kizuna AI on stream

VTubers represent the latest trend of digital media coming from Japan and developing in China. It’s difficult to keep track of how many are currently active: this article suggests over 10 000 although they include virtual influencers as well. A small minority boast large communities of followers reaching hundreds of thousands of subscribers, the most popular to date being Kizuna AI who was created in 2014 and holds over 2.6M subscribers on YouTube. Due to their immense popularity, companies and organizations have used VTubers as a method of advertising or bringing attention to a product or service. In 2018, Kizuna AI was appointed as the first virtual ambassador for the Japan National Tourism Organization (JNTO). 

Virtual influencers / virtual instagrammers

Virtual influencers are CGI models (both in the sense of 3D models and fashion models) taking center stage on social media, especially on Instagram. The most famous example is Lil Miquela, who has 1.8M followers to this date. In the western world, virtual influencers are quickly gaining millions of followers on social media and are part of a growing change in the influencer industry. Thanks to their social media success, some have landed campaigns for brands such as Chanel, Tesla and Prada.

League of Legend virtual band K/DA
League of Legends virtual band K/DA

The gaming industry is also leveraging the virtual influencer trend, though sometimes in a hybrid way. Recently, Riot Games used a virtual K-pop band to help League of Legends attract new players: in addition to releasing a music video which exceeded 20 million views within four days, Riot also brought the virtual band onstage during the opening ceremony of the World Championship in 2018 using AR. The difference here is that each member of Riot’s K/DA has a real (and otherwise already famous) counterpart: singers Miyeon, Soyeon, Madison Beer and Jaira Burns. Electronic Arts has also created a fictional persona called Alex Hunter, a virtual footballer who appears in several games of the FIFA series and who is also based on a real actor, Adetomiwa Edun, which makes any further use of the Alex Hunter character a little trickier.

In China, the dating game Love and Producer took this phenomenon to another level: its creators used the growing popularity of their mobile game to commercialize the four protagonists as virtual idols later on. They became brand ambassadors for multiple products and appeared on TV reality shows. 

2. The tech behind virtual celebrities: from traditional CGI to the early stages of AI

Of course, human simulations have existed for years and 3D characters are nothing new to games or VFX artists who keep on breaking new ground with each passing year. Is the tech behind virtual celebrities really something new?

How is a virtual celebrity made? A not-so-high-tech cookbook

Virtual celebrities, VTubers and virtual influencers may be very recent trends, but they’re usually built with fairly traditional tools to anyone familiar with the VFX or the gaming industries. In short, most of virtual celebrities are simply made by character artists following standard 3D pipelines. Creators achieve their modelling and rigging by hand with common and fairly standard tools like Blender or Maya. In fact, many virtual celebrities are much simpler in nature compared to onscreen characters that the public is used to seeing in blockbusters. Often times a single artist is enough to create a virtual influencer, whereas film characters can typically mobilize teams of dozens working with high end proprietary software. Virtual influencers in particular seem to often use face replacement as a way to simplify the process, using a real setting and human model on top of which a 3D head is added.

Instagram posts by virtual influencer and virtual celebrity Shudu
Virtual Influencer Shudu

One of the most well-known virtual influencers, Shudu, was in fact created as a side project by a photographer, Cameron James-Wilson, who had taken up 3D modeling as a hobby. An interview with the New Yorker lays out his progress, going from creating donuts in Blender (most likely the Blender Guru beginner tutorial) to using a beginner-friendly software, Daz 3D, and its asset library to create a virtual model. It’s important to note, however, that the quality of the renders that made Shudu famous have probably a lot to do with James-Wilson being an established photographer.

Aside from a couple of names which appear to have a seasoned team of 3D artists working in the shadows, many virtual influencers rely on very simple and cost effective 3D pipelines, using software like Reallusion Iclone to quickly create human characters using pre-configured tools and customization options. This also explains why many characters may look alike, aside from VTubers who often rock the same anime look. But this shouldn’t be surprising: many virtual beings are born as projects led by small teams unsure of their profitability.

What about the animations?

Some virtual celebrities, influencers or streamers move, speak and interact with their audience. Virtual celebrities are heavily reliant on – real – human actors to perform. Movements are obtained using common motion capture solutions (perhaps accessible versions like Rokoko’s Smart Suit Pro or Hyprsense). Animation is no cheap or easy task, which is why static media like Instagram posts are sometimes preferred. Anime characters representing VTubers are an exception, as their stylized looks may lower the difficulty of creating a satisfying animation.

An example of an accessible motion capture tech is the use of the iPhone X, which features a TrueDepth camera able to follow the movements of the user’s face fairly accurately. In this case, a phone is all that’s needed to animate a face, which is a small revolution in the field of animation considering that previous solutions were all quite expensive. It is said that a minute of animation can range anywhere between $1000 and $3000 (and up when looking for realistic details)! Meanwhile, artist and tinkerer extraordinaire Cory Strassburger managed to build his own complete motion capture solution with an iPhone and an Xsens suit.

iPhone X Facial Capture demo by Cory Strassburger from Kite & Lightning Studio

But what about the voice? The necessity of having a voice actor may be a limiting factor for a couple of reasons. For starters, any live event requires the presence of an actor for the complete duration, but more importantly… what if that actor leaves or is unavailable? Can a virtual celebrity with millions of followers just change his or her voice every time the voice actor or actress is replaced? There is no readily available solution at the moment, but there’s no doubt that owners are looking towards voice synthesis to replicate an experience similar to what Hatsune Miku has offered so far.

Is Artificial Intelligence used in virtual celebrities?

It is, but with varying degrees of success. Some virtual celebrities are built upon traditional modeling and animation techniques, some make a small use of AI, some promise to use AI as their core technology. This would seem unlikely in most cases, as Natural Language Processing and Generation (NLP and NLG) have still quite a long way to go before they’re able to hold a complete conversation. The world of virtual beings is unfortunately plagued with bold promises of working Artificial Intelligence, many of which have turned out to be false. 

Certain virtual celebrities (such as Kizuna AI) do claim that they are AI-driven, or even AI themselves, but that isn’t the case most of the time, though the public, journalists included, often believes these statements, not realizing how hand-crafted their idols really are. However, we will undoubtedly see a rise in the way AI powers these characters in the next few years, perhaps sooner than later. 

3. How do virtual celebrities make money? Are virtual influencers really opening a new market?

Big names and big bucks: virtual celebrities and real success

Not all virtual celebs reach the same level of fame. The cream of the crop has achieved worldwide recognition, venturing into the world of mainstream media, striking exceptional deals and raising enough funds to power fully fledged companies. The hype behind the likes of Lil Miquela, Hatsune Miku or Luo Tianyi has translated into profitable deals and campaigns like Brud’s collaboration with Calvin Klein – a kiss between virtual Model Lil Miquela and real model Bella Hadid. Some characters were created as global campaigns to begin with, as is the case of KFC’s virtual Colonel Sanders (who does not seem to be active at the time of this article’s publication).

Calvin Klein campaign with Lil Miquela and Bella Hadid
Calvin Klein campaign with virtual influencer Lil Miquela and Model Bella Hadid

Brud (yes, their website is a Google Doc) has raised $25.5 millions so far, while Activ8 (the company behind Kizuna AI) has managed to raise $5.4 millions to fund its VTuber projects. These numbers are impressive and reflect the interest of investors who believe that this business model can be scaled up. However, only a handful of virtual celebs can leverage deals, activations and PR stunts of this magnitude, and their initial success might also be in part fueled by their early presence and hype generated by a never-seen form of entertainment.

In the end, “being famous” isn’t really a business model – are these virtual celebs all that different from real ones to begin with?

The virtual streaming business

Virtual beings have been streaming for quite some time now. User TheOneManny has been active since 2015, using a software called FaceRig to replace his face on stream with a dog and gaining some notoriety as a dog playing Counter Strike on Twitch. He was however limited by the fact that anyone could purchase FaceRig and use the same dog avatar, whereas ownership of each character has become an important topic today. In the end, TheOneManny (accidentally) revealed his human face and continued to function as a regular streamer. He kept on using his dog avatar, though (who wouldn’t).

Streamer TheOneManny and his virtual dog avatar
Streamer TheOneManny and his virtual dog avatar

The case of TheOneManny is interesting in that it underlines how a virtual and a real streamer are essentially the same. They earn the same kind of revenue through various revenue sharing programs in platforms like YouTube and Bilibili. Additionally, VTubers and streamers make use of donations as well, in the form of tipping or gifting mechanics.

To summarize, Vtubers can typically earn revenue through 5 different channels:

  1. Ad revenue;
  2. Sponsorships;
  3. Merchandising;
  4. Donations;
  5. Paid subscriptions (on platforms like Twitch).

But how much can a streamer or vlogger expect to earn? In truth, not much for 96,5% of YouTubers who will not earn enough to cross the US poverty line, as stated by a 2018 study from the Offenburg University of Applied Sciences. Entertainers can expect to earn between $1.5 and $3 per 1000 views, not taking into account other sources of revenue. That’s only $3000 for the considerable achievement of reaching a million views.

Famous Twitch streamer Jeremy Wang gave his audience a glimpse of what his income could look like. Averaging 10 000 concurrents viewers live, with 800 000 followers on Twitch and 700 000 on YouTube, Wang revealed a “base” monthly revenue of ads, donations and subscriptions of $20 000. He also mentioned that additional sponsorship revenue could bring in between $0,01 and $1 per viewer, per hour, potentially adding up to $10 000 per hour of stream.

In short, a VTuber is bound to rely mostly on sponsorship deals and merch, as other sources of revenue may not be sufficient. We can also add that only well-known Vtubers can expect to reach a decent level of revenue. It appears that Vtubers who can only count on a small audience may not even make a living wage.

Virtual influencers: regular influencers with extra steps?

Are virtual influencers really different from real influencers, or do they follow the same business model? The short answer is yes, they’re influencers with extra steps. The long answer is that they’re influencers with a lot of extra steps.

Influencer revenue essentially boils down to ad revenue, sponsorship opportunities and more generally monetizing their community of followers as well as leveraging their fame to receive a certain number of non-cash benefits that would not be of great interest to virtual beings. In this blog piece, sponsored posts are said to bring in an average of $100 per post per 10 000 followers (don’t hesitate to take a look, there are a couple of interesting examples), though the rates may vary depending on other factors such as engagement, and in the case of virtual influencers, uniqueness and ability to reach Gen Z audiences.

Instagram post by Noonoouri sponsored by Lacoste
Lacoste sponsored instagram post by virtual influencer NooNoouri

The difference between a virtual influencer and a real one does not really lie in their ways of making money, but rather in their potential: a virtual being is ubiquitous and under the full control and ownership of a company, which speeds up and boosts any collaboration. Theoretically speaking, a virtual influencer could be participating in a fashion show in Paris while at the same time working on a commercial in Tokyo, all the while keeping a steady flow of content.

A virtual influencer has in a way more potential than a real one, but only once it has achieved a certain level of fame. The early stages are where the “extra steps” hurt – being an influencer is accessible to anyone who owns a decent smartphone and is willing to eventually purchase some accessories. On the contrary, rendering and animating a virtual being can be very expensive and is usually not a one-man gig. Joerg Zuber, the man behind virtual influencer Noonoouri, has stated that he has a team of six artists working full time.

4. The challenges of virtual celebrities

The main challenge resides in the name – celebrities. All virtual beings, virtual influencers or virtual YouTubers can’t reach this level of fame… and being famous is hardly a business model anyway.

Win-win business models

The idea is to help content creators all the while placing the burden of “making it” and building a community on them.

Some have already thought about another kind of winning strategy. A good example is Reality, an app created by a division of GREE which provides a complete platform to create, animate and broadcast VTubers. Others have launched virtual agencies, which gather and manage a number of virtual influencers. The idea is to help content creators all the while placing the burden of “making it” and building a community on them. In both cases, strength lies in numbers.

The democratization of 3D content creation

Virtual celebrities hold a great potential due to their ubiquitous and fictitious nature, more so thanks to their ability to blend with other virtual platforms and fictional universes that make up a great part of entertainment. This potential is unfortunately held back by the difficulties posed by 3D content creation, which is being democratized as we speak but still remains a fairly expensive endeavor, in particular when the cost of animation and rendering are taken into account.

A regular influencer can create content and spread it online with a single click while a virtual one will have to create, animate and render any 3D asset in the scene. Some tools and platforms are already working on breaking these barriers, among which a few have already been mentioned. These efforts will undoubtedly lower the barriers to entry.

The potential of AI

An even more important and challenging path is the use of AI: another roadbloack in the way of virtual celebrities is the need for human actions when animating and monitoring the character. One can easily imagine how even rudimentary forms of AI can help in creating more content, faster, all the while giving more autonomy to each virtual celebrity. The dream would be to achieve a fully autonomous virtual being, but we’re still a long way from here. How long? That’s a good question and a controversial one that we’ll try to clear up in a later article.


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Until next time!


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