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Why a $1 billion virtual influencer company is betting big on US growth

Motoaki Tanigo, CEO of Cover Corp
Motoaki Tanigo is the CEO of Cover Corp.

Cover Corp

  • Cover Corp, a top virtual influencer company, is expanding its business in the US.
  • Its creators, known as VTubers, use digital avatars and are gaining popularity on YouTube.
  • The company is using sold-out live events and collaborations with traditional media to grow abroad.

Japan-based Cover Corporation is betting on the US as the next big market for growing its virtual anime-style influencer fan base.

The company manages creators who use technology to appear in videos and other online posts as digital avatars, often resembling anime characters. These influencers are most popular on YouTube. The VTubers, as they're known, typically livestream. Many make music or play games.

Their popularity is small but on the rise. From January 2023 to June 2023, VTubers comprised 1.4% of the active YouTube live gaming community but captured 9.6% of all viewer hours, according to data from the game-marketing platform GameSight. VTuber viewership increased by 28% during the period, while that of other gaming creators on YouTube Live fell by 6%.

Cover is one of several companies that exclusively work with VTubers to expand their businesses. Its agency division, Hololive Production, manages VTubers in Japan, Indonesia, and English-speaking countries, which have been a major area of expansion for the company since 2023.

Last year, Cover opened an office in Los Angeles through its first overseas subsidiary.

Hololive's popular VTubers in the US include Mori Calliope (2.49 million YouTube subscribers) and Nerissa Ravencroft (805,000 YouTube subscribers). Globally, its talent includes some of the most-watched and subscribed VTuber channels on YouTube.

Mori Calliope
Mori Calliope is a VTuber with 2.49 million subscribers.

Cover Corp

The company's international expansion has helped boost revenue and earnings. Cover's revenue rose 50% year over year to 10,688 million yen, about $67.6 million, during its last reported quarter, which ended in October. It posted a profit of 1,500 million yen during the period.

Cover has a market capitalization of about $160 billion yen, or around $1 billion.

Motoaki Tanigo, CEO of Cover, spoke to Business Insider in an interview conducted through translators. In 2025, he said the company plans to focus on gaming collaborations, pop-up shops, and live events like concerts to grow its business in the US.

Hololive collaborated last year with the Los Angeles Dodgers on exclusive merchandise, for instance. VTuber Gawr Gura (4.5 million YouTube subscribers) also sang "Take Me Out to the Ball Game" on screens throughout the stadium.

Inside the business model of a top VTuber company

While Hololive primarily manages livestreamers, several of the company's creators sing and make their own music. That has opened up avenues for revenue and growth.

Mori Calliope, for instance, is scheduled to headline a solo concert in February in Los Angeles. Hololive's VTuber talent uses 3D technology to bring its digital avatars to the stage.

Tanigo said music is one of the top ways its talent reaches new audiences.

In 2023, Cover held a concert at the 6,000-seat YouTube Theater in LA, which sold out in 30 minutes, the company said. Its August concert at the Kings Theater in New York, another 6,000-seat venue, sold out in 10 minutes.

"The popularity of these events proves that North American audiences have a tremendous appetite for VTuber content," Tanigo said. "Our goal is to elevate VTubers alongside popular Japanese exports like manga, anime, and games."

Cover's top revenue drivers are merchandise, such as made-to-order items and a collectible card game; streaming revenue from super chats and channel memberships; concerts and live events; and licensing and collaborations, per its earnings report. Licensing and collaborations was the fastest-growing segment.

Hololive's international expansion

In 2025, the company is making a behind-the-scenes shift that it hopes will make its VTubers more engaging.

Until now, Hololive's VTuber models had been created through the gaming software Unity. Tanigo said the company is switching to another platform, Unreal Engine, which it believes will create "better quality" models.

The company is also working on finding better ways to sell tickets to and improve its in-person events. Tanigo said he'd love to see a function on YouTube or Twitch for ticket sales and better real-time translation for live videos, for example.

Hololive's international expansion has faced roadblocks.

Tanigo said the company has struggled with music copyright outside Japan, including getting the rights for talent to cover a song.

One of his priorities for the year ahead is to make inroads into traditional US media.

In Japan, the company has placed its talent on TV shows and other traditional media spots, and the team is working on animation projects based on its talent.

"We'd like to have that opportunity in the US as well and try to have more exposure in a TV show and different types of mediums," Tanigo said.

Read the original article on Business Insider

Meta's moderation shake-up highlights a political divide among influencers

Mark Zuckerberg
Meta CEO Mark Zuckerberg, pictured, debuted new content-moderation policies this week.

BRENDAN SMIALOWSKI/ Getty Images

  • The reaction among creators to Meta's content-moderation changes has largely fallen along political lines.
  • Some influencers worry the changes could cause harm to the LGBTQ+ community.
  • Others questioned Meta's decision to feature more political content.

Getting "Zucked" β€” a term for having your account suspended or content removed due to community violations β€” is a staple in the creator lexicon.

Despite that, creators who spoke with Business Insider had mixed reactions to Meta CEO Mark Zuckerberg's plans to reduce content moderation in the name of free speech.

On Tuesday, Meta unveiled new policies that included winding down fact-checking, loosening content moderation, and introducing X-style "Community Notes."

The creator community largely reacted along political lines, with some left-leaning influencers expressing disappointment.

"This is really about just pandering to the Trump administration in a way that feels extremely obvious," LGBTQ+ advocate and "Gay News" host Josh Helfgott told BI.

Left-leaning filmmaker Michael McWhorter also said he felt the changes were catering to Trump and his MAGA base.

"You're not trying to balance things out," McWhorter said of Meta. "We are shifting to the other side of things."

Elsewhere, some right-leaning creators cheered the changes.

Christopher Townsend, an Air Force vet and conservative rapper with over 300,000 Instagram followers, told BI he thought the policy overhaul was "a great step toward the decentralization of information and the end to the control legacy media has had on the prevailing narrative."

Instagram head Adam Mosseri posted a video on Wednesday outlining how the new policies would impact creators. He said the company would correct its "over-enforcement" of content moderation and begin recommending political content again.

"If you're a creator who likes to post about political content, this should mean that you feel comfortable doing so on any of our platforms," Mosseri said. "We will now show political recommendations."

Meta didn't respond to a request for comment.

Some are wary of Community Notes

As part of the policy overhaul, Meta is getting rid of fact-checkers in favor of Community Notes in the style of Elon Musk's X. Users will be able to volunteer to contribute to Community Notes, which will appear on content when people with a range of different perspectives agree a correction is in order.

"Like X, it gives the user community more authority over the platform instead of biased third-party administrators," Townsend said.

McWhorter said that while Community Notes were a "great equalizer," he felt they were not an adequate replacement for fact-checking. He said he wished Meta would rely on a combination of both systems.

A former Instagram staffer told BI that they felt placing the responsibility to moderate content on users and creators "on a platform with massive global reach and historical harmful content issues" was a step in the wrong direction. They asked for anonymity to protect business relationships; their identity is known to BI.

Concerns about anti-LGBTQ+ discourse

Helfgott expressed concern about Meta's plan to decrease moderation around certain political topics. The company's blog post specifically noted immigration and gender identity as areas of debate where it plans to decrease restrictions.

Helfgott said that while Meta's plans were described in the language of "political discourse," he felt the changes could lead to bullying of the LGBTQ+ community.

Alongside Tuesday's announcement, Meta updated its Hateful Conduct policy.

"We do allow allegations of mental illness or abnormality when based on gender or sexual orientation," the company wrote, "given political and religious discourse about transgenderism and homosexuality and common non-serious usage of words like 'weird.'"

"This is the most anti-LGBTQ announcement that a social-media platform has made in recent memory," Helfgott said.

While McWhorter told BI he felt his content had been Zucked β€” or unfairly suppressed β€” in the past, he said he'd prefer a stricter moderating system even if it had "flaws."

"I'd rather that I take the hit for a joke that it didn't understand than that stuff being allowed to be spread all over the platform," he said, referring to potentially harmful posts.

Meta's increased political emphasis marks an about-face

Some creators were flummoxed by Meta's about-face on the amount of political content it plans to recommend. The company had previously cut back significantly on promoting political content in feeds in recent years.

Malynda Hale, a creator and activist with 65,000 followers, said this change could benefit political creators but questioned the company's motives.

"I think the fact that Meta is going to be serving up more political content is actually positive for creators like myself, but I don't think it's with the intention to keep the community informed," she told BI.

She said she felt Meta wanted to boost engagement even at the cost of division and disagreement.

Despite some misgivings, the creators who spoke with BI said they weren't going anywhere.

"I'll work with the system as it's presented to me, and I'll find my way to work around it," McWhorter said. "I constantly have to do that on all different platforms."

Helfgott said he felt "handcuffed" by Meta because if he stopped posting on Instagram, he would lose out on millions of people seeing his content each month.

"Meta knows this," he said. "They know that creators may not like this, but we need the reach, and we will keep posting there."

Read the original article on Business Insider

TikTok breaks down 3 big trends that brands should watch for in 2025

TikTok influencer Jools Lebron sparked the "very mindful, very demure" trend, with many brands jumping on the bandwagon.
TikTok influencer Jools Lebron sparked the "very mindful, very demure" trend, with many brands jumping on the bandwagon.

The Hapa Blonde/GC Images

  • TikTok published its global "What's Next" trends report for marketing creatives on Wednesday.
  • It advised marketers to try out AI tech and hire a wider set of creators to reach niche communities.
  • TikTok also dove into how marketers should change how they talk about life stages with consumers.

TikTok thinks marketers should lean into artificial intelligence as a creative tool in 2025.

It's one of several trends TikTok laid out on Wednesday in its 2025 "What's Next" report, which breaks down the culture and technology trends the company thinks will shape marketing in the coming year.

It's also recommending brands hire a wider set of influencers to reach niche communities and adjust how they speak to a new crop of consumers who view life stages differently than their predecessors.

Business Insider spoke to Cassie Taylor, TikTok's global creative solutions and trends lead, and several marketing partners who had early access to the report about where TikTok marketing is heading next.

TikTok's deep dive into global trends did not address the elephant in the room: its app could be pulled from US app stores as early as January 19, as mandated by a divest-or-ban law. If that does happen, TikTok would still operate in other markets. Brands would likely shift their US attention to other short-video products, such as Instagram reels or YouTube shorts. Taylor declined to comment on a potential ban.

Here are BI's key takeaways from the 36-page report:

1. AI is a marketer's friend, not a foe (hopefully)

Last year, TikTok announced a bunch of new generative-AI tools for marketers inside a creative suite called Symphony. The product allows creatives to generate ad scripts and trend summaries and translate and dub videos into new languages, among other offerings. One of Symphony's more striking features helps brands use AI-generated avatars built from the likenesses of influencers or paid actors. That tool remains in limited use, Taylor said.

Some influencers and marketers have expressed nervousness about the potential for generative AI to take away jobs. TikTok acknowledged that uncertainty in its report. Still, the company wrote that marketers can gain a "creative edge" if they embrace AI.

"Even a few years ago when we started to see different apps come out with AI, it was a little bit of, 'Do we like this? Do we not like this?' Should we be worried about it?'" Taylor said. "It's now been around just enough time from a trend perspective for people to really see its value."

Bridget Jewell, an executive creative director at Dentsu Creative who sits on a creative partner council for TikTok, said the agency uses TikTok's Symphony suite to come up with video ideas and identify trending sounds.

"It's the tool that allows us to think about things differently," Jewell said.

2. Work with influencers to connect with niche communities

Marketers go back and forth on whether to hire celebrities and mega influencers for reach or to work with creators who have more targeted audiences. TikTok is betting the latter will take off in 2025.

"As communities seek trusted voices, more people are becoming creators, from quiet reviewers to quirky characters," the company wrote in its report. "It's not about the loudest voice, but increasing the number of creators, sometimes even by 50% β€” to drive impact at scale."

Working with creators who know how to speak to a specific community can help a brand build trust, Taylor said.

"I'm not saying there isn't a time and place for a mass message," Taylor said. "What I'm saying is people will build a relationship with you on TikTok if you're talking to them like the community."

Jamie Gersch, chief marketing officer of the fashion brand Rothy's, told BI the company looks to work on campaigns with influencers who are already engaging with its products on social media.

"The in-house team is living and breathing on the platform and finding people that are naturally talking about us and love us," Gersch said.

3. Brands should treat life stages differently for modern consumers

Marketers should rethink the way they talk about traditional life milestones like buying a home when they speak to TikTok users.

These milestones can induce "FOMO and anxiety about falling behind," the company wrote. It pointed to users on the app who have shared their struggles with student debt and homeownership.

Instead of posting videos that value classic life stages, brands could lean into other goals TikTok users have shown they care about, like improving mental health or going on a hike.

"People are getting married later. People are moving abroad as a milestone. People are having different career goals," Taylor said.

Read the original article on Business Insider

Instagram has shut down a program that paid creators for ads placed on their profiles

Instagram app logo in front of a purple background and dollar signs

Instagram, Tyler Le/Instagram

  • Instagram has shut down a program that paid creators for ads placed on their profiles.
  • Meta began testing the program in 2022.
  • Instagram has launched several creator-monetization tests since 2020 β€” and some haven't survived.

Instagram has ended a program that allowed creators to earn money from ads placed between content on their profiles, the company confirmed to Business Insider.

The Meta-owned platform began testing the program with US creators in 2022 and expanded it in 2024 to eligible profiles in Canada, South Korea, Japan, and Australia.

Meta will continue to place ads in between content on nonteen public Instagram profiles. Businesses will still be able to prevent their ads from running on specific profiles.

According to court documents filed in 2024, Instagram has generated billions in ad revenue for Meta. In 2022, when the platform began testing the ads-in-profile program, it generated $16.5 billion, the same court filing said.

This isn't the first creator-monetization program that Meta has tested and shuttered.

Other programs you may remember include:

  • IGTV (Instagram's now defunct YouTube competitor) shared ad revenue with creators from 2020 to 2022.
  • Instagram briefly had a native affiliate program between 2021 and 2022 that allowed creators to earn revenue from shopping tags on their posts.

The Instagram Reels Bonus, which paid creators a sum of money based on how their reels performed, was paused in 2023. It was reintroduced in 2024 as a series of limited-time bonuses.

Read the original article on Business Insider
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