COVER Corporation is pioneering a new era of entertainment with its vision of “Together, Let’s Create Culture Loved by All.” The breakthrough of COVER, known for its world’s largest VTuber agency “hololive production,” has now expanded widely from the global market to the metaverse area, demonstrating new possibilities through the convergence of technology and entertainment.
In the first edition of our interview for “COVERedge,” we spoke to Mr. Motoaki Tanigo, President and CEO of COVER Corporation, about his unique perspective that views VTubers as “an advanced form of UGC (*) business,” and what kind of future this will create, as well as the full scope of the “greater challenge” that COVER aims to achieve after going public and entering its “second stage of development.”
Infinite potential of the VTuber culture, challenging the global market with the aim of “breaking through with entertainment from Japan to the world”
– In just eight years since its founding, COVER has created global content that has attracted many fan communities around the world. Did you have any thoughts or ideas that you focused on at the start of the business?
Since our founding, we had a strong desire to create a “company that would break through with entertainment from Japan to the world.” At present, a certain level of business has been established in Japan alone. We have been able to get by until now, but in 10 or 20 years’ time, with the Japanese population set to decline significantly, we will no longer be able to make ends meet by doing business only in Japan. Our generation is called the “fugitive generation” as we will not directly face such circumstances as a party concerned, and there is a tendency to think that we can manage without seriously confronting the declining Japanese economy. However, if I were to run my own company, I had a strong desire from the beginning to face the issues that Japan is facing and to pass them on to the next generation of children.
Around the time COVER was established in 2016, virtual YouTubers started to appear, and the live streaming market also became very lively. We started to develop a system that could be used for live streaming using characters, and in September 2017, the first COVER VTuber “Tokino Sora” made her debut. That is the prototype of hololive production today.
We have chosen two-dimensional content, which is one of Japan’s strengths, as a theme for our challenge from Japan to the world, and we are once again feeling the great potential of working in this area. Currently, only a few Japanese companies are able to compete in the field of IT x entertainment worldwide, but the Japanese animation market has doubled over the past 10 years, and in 2022, the global Japanese animation market expanded to approximately 3 trillion yen (*0). If hololive production can follow this context, there is a good chance of expanding its market worldwide. In order to achieve this, we need to be conscious of expanding our business from Japan to the world by cooperating with various companies, including those involved in the animation industry, rather than aiming for the global market on our own.
– Since 2020, you have been expanding your business both in Japan and overseas, launching “hololive Indonesia” and “hololive English,” and establishing the North American base “COVER USA” in July of this year. Please tell us about the current response compared to your expectations and what measures you are taking.
In Japan, the existence of VTubers is gradually becoming more widely recognized by the general public, and awareness is particularly high among young people and Generation Z. In order to become even more mainstream, we are currently focusing on media mixes that utilize IP both in Japan and overseas.
In July of this year, a hololive production VTuber announced the start of a Los Angeles Dodgers game and performed, and this was the world’s first collaboration between a VTuber and an MLB team (*1). In August 2023, we also collaborated with the Yomiuri Giants baseball team in Japan (*2).
We would like more people to know about VTubers and hololive production by having hololive production fans attend mainstream events where a single baseball game can draw in nearly 50,000 people, and by planning events where fans of both sides can enjoy themselves. I hope that VTubers will be accepted in an unbiased way across generations and countries through collaborations that transcend borders and cultures.
– The Company also released the beta version of the metaverse service “Holoearth” in 2022, implementing many measures and initiatives that combine technology and entertainment, but do you have any guiding principles behind such measures?
New entertainment is created by technology.
Historically, there has been a strong relationship between the evolution of technology and new forms of entertainment, starting with Pixar Animation Studios hiring computer scientists with expertise in computer graphics. With the advent of new technologies and an increasing number of people wanting to see entertainment that makes use of those technologies, creative entertainment that no one has seen before has been generated. VTubers are also a form of entertainment that was born from technology. Similarly, I believe that new worlds will be born through the combination of new technologies such as the metaverse.
“VTuber is also an evolved form of the UGC business” – The creator economy that we aim for as a platformer
– Please tell us about the world that COVER is aiming for, and what you would like to spread and communicate to the world in the future.
Through hololive production, we are aiming to lower the threshold for creating things and develop a society where “anyone can be a creator.” Our vision is to provide value as a platform company that provides a place for creators to create content while making use of technology. At the moment, we are viewed as a YouTube performer production company, and I don’t think we have much of an image as a platformer, but I would like to demonstrate more of our platformer aspects as we develop things like the metaverse in the future.
For example, the flea market application Mercari has created a virtuous cycle of increasing the number of buyers by thoroughly considering how to empower sellers and implementing measures that make it easy for them to list items for sale, such as by making it possible to easily send items from convenience stores. By developing tools and investing in facilities that empower creators, we also hope to create a virtuous cycle in which more attractive creators become involved, resulting in an increase in fans, enabling us to further improve our systems. The term creator does not just refer to VTubers, illustrators and designers, but also includes those who are involved in activities that support VTubers through clipped videos and fan art, among others. Some have become professionals after being exposed to creative activities through their support activities. It would be ideal if the fans’ skills naturally improved while enjoying hololive production.
– Mr. Tanigo, you have been developing IT businesses since the early days of mobile phone websites. Were your choices influenced by experience in your previous businesses? Also, what exactly is the form of the platform company that COVER is aiming to become?
I used to be in charge of the EC business at a company operating a cosmetics review site, and then around 2006, I started operating an outing information service using GPS. Even throughout my past experience and career, I believe that providing content and platforms that are conscious of UGC (user-generated content) is a major keyword. Like the UGC business I have been involved in until now, I recognize that VTubers are an area of the UGC business that is expanding in line with technological evolution. I think how VTubers become more popular when people watch their broadcasts, leave comments and show their support is a perfect example of UGC.
We provide tools and systems for VTubers, as well as the metaverse service “Holoearth” for users, but what we do through such medium are UGC businesses, which is creating content on the internet and approaching users. I believe that platform companies will expand such businesses in line with technological evolution.
– I see. Creating tools to support VTubers in generating UGC, and by making them function creates a cycle of user excitement, IP growth, and regeneration of UGC. In this context, what position do you aim to achieve in the world or in Japan in five or ten years?
I want to create artists who are commonly recognized in Japan and around the world. For example, in 2007, “Hatsune Miku” appeared from “VOCALOID™︎,” and in 2024, artists called “vocaloid artists” have become popular not only in Japan but also around the world. We debuted VTubers in 2017, and aspire to become a platformer that gives birth to mainstream artists in five or ten years. With the evolution of technology, VTubers have appeared and have become established as a profession. As the next stage, I believe it is important for them to be accepted by a wider society. I want top artists to emerge and show the younger generation that “you can be a performer regardless of your appearance or where you live!,” and I think that in doing so, a new scene will be born in a few years’ time.
“Taking on bigger challenges while welcoming new colleagues” – The future of COVER’s organization that continues to take on challenges, as depicted by the Company in its second stage of development
– I feel it is important for each and every employee to work toward the same vision. What are the values that you currently hold strongly in relation to management and the organization? Also, what kind of experience do you think can be cultivated at COVER?
We believe that in order to carry out our mission of making the previously unheard of market of VTubers the mainstream of the world, we ourselves must also continue to grow. For this reason, I would like our employees to take actions with an eye toward the future, for example 10 years from now, rather than focusing on short-term trends. As each person plays a role in developing new markets, I think it is important to be aware of the need to nurture yourself as well as those who are junior to you.
For this reason, we place great importance on internal collaboration. One of our values is “coming together beyond boundaries.” At COVER, we have professionals from a variety of fields, so I’d like our employees to be aware that they should be collaborating with professionals from other fields to generate results. As a Company with people working in a wide variety of fields, I would like for them to take on the challenge of internal collaboration without being constrained by their job type.
As for the experience that we can cultivate, I think that the know-how of creating a business by working together with influential VTubers will be extremely useful in the world in future, and as we also have employees from overseas, I think it is a great opportunity to learn about global communication as a Company that can take on the world from Japan.
– Thank you. Finally, if you were to describe the current COVER Corporation in a realistic sense in one phrase, what phrase would you choose?
That would be “second stage of development.” We were listed on the stock exchange in 2023, and I think we are at a new starting point right now. We will be taking on the challenge of devoting ourselves to expanding overseas and bringing VTubers into the mainstream in Japan, while also implementing long-term measures such as the metaverse. I feel that this is the perfect time for a second stage of development. I would like to take on bigger challenges while welcoming new colleagues.
– As the first article on our owned media, talking to Mr. Tanigo has raised our expectations for the future direction the Company. – Thank you for today.
COVER Corporation has entered its “second stage of development.” Taking the VTuber culture to the world’s mainstream and beyond. COVER Corporation is creating a new form of entertainment through technology. We will continue to report on the progress of COVER and the revolutions it brings to the entertainment industry in “COVERedge.” Please look forward to our future editions!
*: UGC: User Generated Content. This refers to content delivered by general consumers who are service users (e.g. video clips, self-made games, etc.)
*1 Reference: “Anime Industry Report 2023” The Association of Japan Animation（JP）
*2 Reference: World’s first! Post-Event Report on the hololive night Collaboration
*3 Reference: hololive’s First Collaboration with Japanese Professional Baseball Team, the Yomiuri Giants!(JP)
