🚀 TikTok goes all-in on commerce

Plus, the rise of the VTuber!

Oct 16, 2022

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🎮 Meta doubles down on VR. Meta unveiled its new VR headset - the Quest Pro, a $1,500 device positioned as a laptop alternative for working professionals. Mark Zuckerberg was joined in the announcement by Microsoft CEO Satya Nadella, who discussed integrating Teams into Meta’s VR headsets. VR has been trickling in to enterprises via immersive training for careers like medicine and logistics. If adopted broadly, the Quest Pro would be the first VR “moment” for everyday workers.

🤑 Netflix goes ad-supported. Netflix unveiled its new “Basic with Ads” tier, priced at $6.99 / month. This is a $3 discount to the prior cheapest plan, and will include 4-5 minutes of ads per hour of content. Netflix told shareholders in 2019 that remaining ad-free was a “deep part of our brand proposition” - so why the shift? The company saw its first subscriber drop in a decade in Q2, and faces competition from both Hulu (starting at $6.99 / month) and Disney +’s ad-supported tier coming soon.

👟 Goat buys Grailed. More consolidation is coming in the resale space, just one week after Poshmark was acquired by Naver! Streetwear marketplace Goat will acquire men’s fashion site Grailed, a year after leading Grailed’s last fundraise. Goat CEO Eddy Lu said apparel and accessories have “doubled” for Goat in the last year, which they hope to accelerate further with the acquisition. Grailed will continue to operate as a separate site, but will be integrated into Goat’s infrastructure.

🛍️ TikTok goes all-in on commerce. By this point, we knew that TikTok was leaning in on shopping. But this week, the company revealed just how much of a full-stack effort this will be. TikTok is now hiring to build its own product fulfillment centers in the U.S., competing directly with Amazon to provide “warehousing, delivery, and customer service returns” for sellers. As platforms like Instagram back away from commerce, we’ll be curious to see how much ground TikTok can gain in the coming year - and how much capital it takes to get this effort off the ground!

what we’re following 👀

How anti-aging startup Loyal is working to make dogs live longer.

What happens when your Apple Watch confuses a rollercoaster for a car crash.

Inside OnlyFans’ efforts to move into the mainstream.

Even Fat Bear Week isn’t safe from election fraud… 🤦🏻‍♀️

Data from trend tracker Glimpse - interest in VTuber 3D models has grown almost 200% in the past year!

Yes, the creator economy has a lot of hype already. But the last 18 months have revealed a new (and in our opinion, underrated) trend on the rise - VTubing! According to Twitch, VTubing content increased almost 500% in the last year.

What’s a VTuber? Someone who streams behind an avatar, often using their real voice and motion-capture software that mimics their movements. VTubers originated in Japan in the 2010s (check out the first known VTuber video below, from 2011), and are often styled as anime characters. Kizuna AI, developed by Japanese company Activ8, held the crown as the most-subscribed VTuber for five years, racking up 3M followers on YouTube and 1M followers on Chinese social app Bilibili.

While Japan has long had talent agencies to manage VTubers (Nijisanji and Hololive are the most popular), the pandemic brought the VTuber trend abroad. Companies like VShojo (headquartered in SF) have raised venture capital to develop English-speaking VTuber talent on Twitch and YouTube. These studios develop new talent and bring onboard existing VTubers like Ironmouse, who has 1.4M followers and is one of Twitch’s biggest stars. As of late 2021, there were an estimated 16k active VTubers globally, a number we have no doubt has continued to climb.

Similar to normal creator meet-and-greets, VShojo hosts booths at events like TwitchCon where fans can meet the characters live - in avatar form!

Now, a new wave of tech is making it easier for anyone to become a VTuber - even if they aren’t repped by an agency! This opens the door for creators who may not feel comfortable showing up as their “real selves” or revealing their full identity. Platforms like VRoid Studio, VTuber Studio, Luppet, Wakaru, and Hyper help aspiring VTubers design characters, simulate motion, and stream live. And much of this software is free, as long as you have a laptop and webcam to attach, or even just a cell phone.

Hyper allows users to build their VTuber avatar, go live on the app or on Twitch and YouTube, and make friends in the VTuber community.

What do we expect to see next? More UGC VTuber content on YouTube and Twitch, as well as expansion onto other platforms (maybe TikTok will be next? 👀) Similar to the first few waves of YouTube stars (ex. Justin Bieber, Lilly Singh, Mr. Beast), we wouldn’t be surprised to see some of these VTubers make the jump into mainstream celebrity or develop their own brands. We’ll also be curious to see whether a new streaming platform rises up specifically to serve VTube creators and viewers.

On the brand side, we predict companies will lean into VTubers for influencer partnerships and potentially develop their own characters. This is already starting to happen - Netflix unveiled a VTuber that will host the company’s weekly anime show, while Pokemon introduced a VTuber trainer for their upcoming Scarlet & Violet game. Perhaps most surprisingly, Tony the Tiger (of Kellogg’s Frosted Flakes fame) debuted on Twitch as a VTuber in August.

If you’re interested in learning more about VTubers, check out Rest of World’s awesome report here!