In the world of VTubers, content creators who use animated avatars as their online persona, there is a distinction between independent VTubers who (as the name suggests) operate independently and “corporate” or “corpo” VTubers who are part of a VTuber agency. In exchange for a certain percentage of their profits, corporate VTubers may receive promotional and business support, resources to create higher quality content, fixed salaries or stipends, and more.

The popular image of a VTuber agency is one that operates similarly to Japanese, Korean and other Asian talent, music, or idol groups. Examples include well known VTuber agencies such as Hololive and Nijisanji. These VTuber agencies have a much more hands-on approach in how they manage their talent. They typically exercise more control over the design of their avatars, who their talent can collaborate with, the type of content that their talent are allowed to create, and more. VTubers that join a VTuber agency typically identify solely with that agency. Agencies might promote their talent as part of certain groups or classes with overarching design themes and collaboration strategies for the talent within that group or class.

These differ from “traditional” talent agencies which are more common in the United States entertainment industry. Examples of these include agencies such as Creative Artists Agency or United Talent Agency. Traditional talent agencies may also “represent” content creators including VTubers. However, the scope of the representations is much narrower with their focus being solely on sourcing business and employment opportunities such as sponsorship deals and promotional campaign spots for their clients. Creators might even work with several different talent agencies for different types of work. For example, a creator might work with one agency to help source sponsorship opportunities for their streaming work, one agency to help find voice acting opportunities in video games and anime, and yet another to represent their music career. In this sense, a VTuber working with a talent agency is really just an indie VTuber.

For our purposes here, we will be largely discussing VTuber agencies (which we will just call “Agencies”, or individually an “Agency”), but we wanted to mention the traditional talent agency because many VTuber agencies, especially newer ones trying to differentiate themselves, have adopted blended approaches to managing their talent. One example of a blended approach would be the United States based VTuber agency, Vshojo, which focuses on VTuber talent but allows them a higher degree of independence and ownership over their own intellectual property.

Given the large variety in Agencies, there are a number of different legal considerations a that both VTubers and Agencies should understand. In this article, we’ll go over some of the more important items.

Ownership of Avatars

Perhaps the most important item is the ownership of VTuber avatars. Agencies often provide resources to create new avatars for VTubers. If this is the case, ownership of the avatars may rest with the Agency and not the VTuber (this detail should be clearly fleshed out in the Agency agreement). However, there are some hybrid-style Agencies which work with established VTubers who own their own avatars. Newly established Agencies may consider different blended approaches to ownership in order to attract talent.

After a VTuber’s leaves an Agency (or “graduates” from an Agency), depending on the rights negotiated in the Agency agreement, the Agency may continue to operate the VTuber persona’s social media accounts and sells merchandise based on such VTuber persona. In more extreme scenarios, the Agency may even want to retain ownership of the VTuber’s avatar and hire a new VTuber to voice the character and/or continue to sell merchandise and license the character to be included in games or other media. A VTuber may feel it is unfair for the Agency to profit off such VTuber persona and may want certain restrictions on the Agency’s ability to continue use of the avatar and VTuber persona. For example, they may want a VTuber persona to be fully retired if they choose to leave an Agency and therefore restrict the Agency’s ability to have another talent voice the character. If the agency continues to operate the VTuber persona’s social media accounts and sells merchandise based on such VTuber persona, the VTuber may want to continue to receive a portion of that revenue.

In some cases, the VTuber may want to continue to use the VTuber avatar and persona and continue operating independently after they graduate as this allows them to continue to retain the benefits of the fame they’ve helped build for the VTuber avatar and persona, collaborate with the other creators they’ve grown to know, and interface with their communities. The parties may want to consider pre-negotiating a fair or reasonable price or metrics to determine post-graduation financials.

Indie VTubers who join an Agency may also want their agreement to explicitly provide for the VTuber’s ownership of existing avatars and intellectual property, regardless of whether such existing avatar is used by the Agency or not. This way, a corporate VTuber can either concurrently stream on their indie VTuber persona or return to it after they leave an agency.

Confidentiality

Confidential Information traditionally includes information about a VTuber and Agency’s business. This can be things like business contacts, customer lists, internal statistics and metrics, etc. With VTubers, there is also an added interest in protecting the VTuber’s personal information and identity. In this sense, both the VTuber and Agency have an interest in maintaining the confidentiality of the VTuber’s persona and the two parties’ interests are mostly aligned.

However, there are certain exceptions where a VTuber may want the ability to disclose confidential and personal information. For example, a VTuber may want the freedom to share what they do with close friends and loved ones, or even future job prospects in the broader entertainment industry.

The Agency on the other hand has a vested interest in limiting the amount of confidential information that a VTuber can share. In the case of other Agencies which are potential competitors, an Agency may want explicit restrictions on the ability to share trade secrets such as customer and partnership lists. For personal information, the Agency may be reluctant to allow the VTuber to share personal information with individuals who are not under a similar confidentiality obligations.

The parties will want to carefully consider under which circumstances Confidential Information is allowed to be disclosed. Besides typical confidentiality obligations between the Agency and VTuber, the parties should consider imposing additional confidentiality obligations for business partners, service providers, family members, and more.

Exclusivity

An exclusivity or non-compete clause restricts the activities that a VTuber may engage in either during or after the duration of their contract with the Agency. The most common exclusivity clauses simply restrict VTubers from engaging in other VTuber activities while they are under contract with their current Agency. Some Agencies may expand these restrictions to go beyond typical VTuber activities such as streaming or creating content as a VTuber, and instead apply more broadly to any type of entertainment or content creator related activity such as creating music in the VTuber’s personal capacity.

The strictest exclusivity and non-compete clauses may include restrictions on a VTuber’s ability to work as a VTuber even after they leave their current Agency. For example, an Agency might prohibit a VTuber from working with any other Agencies or even in their personal capacity for months or years after the agreement ends.

Certain exclusivity or non-compete provisions are valid in many states and in Japan, but most jurisdictions require that such provisions be “reasonable.” This usually means that the restriction cannot be so overly broad that it prohibits an individual from practicing their trade or doing business. When looking at whether an exclusivity or non-compete provision is reasonable, courts will typically look at factors including whether the provision protects the legitimate business interest of the Agency, whether the time or geographic limitations are reasonable, and the scope of the occupational restrictions.

In California, where many western VTubers and Agencies are based, post-contract exclusivity and non-compete clauses are broadly prohibited. Courts have even struck down clauses prohibiting solicitation of customers and employees. Recent legislation in California has additionally provided former, current, and prospective employees additional rights, including the private right of action to seek injunctive relief or actual damages, against employers that enter into or attempt to enforce noncompete agreements prohibited by the law as well as attorneys’ fees and costs in such actions.

On one side, Agencies have a legitimate interest to lower the risk of VTubers suddenly leaving and jeopardizing resources and time that the Agency put into the VTuber. On the other hand, VTubers want to have the freedom and flexibility to pursue different opportunities. The parties will have to balance these factors along with relevant legislation in the jurisdictions that they are based in.

Conduct

The last item we’ll discuss is provisions governing the conduct of a VTuber. Some contracts may have an ethics and morality clause. These clauses are commonly found in influencer sponsorship agreements and allow a company to terminate a contract if an influencer engages in anything the company thinks could bring them into public disrepute, scandal, or offend the general public.

Agency contracts may be even more detailed and consist of an addendum or a separate code of conduct detailing the rules around a VTuber’s conduct. In addition to prohibitions on activities or conduct that could negatively affect either party’s image, an Agency may want to limit who the VTuber can associate or collaborate with, whether they can get their own sponsorship deals, what type of products they can promote, and other stipulations.

VTubers on the other hand, have an interest in maintaining as much freedom and flexibility in how they operate which can allow them to expand their audience and reach. Furthermore, the parties should consider the reality that certain VTubers’ content are intentionally explicit and target mature audiences. Therefore, an overly broad morality clause may not be appropriate.

Conclusion

The opportunity for Agencies and VTubers to work together is an exciting prospect. However, there are also significant considerations for both parties. A VTuber looking to join an Agency should balance the benefits and support that an Agency can provide against the added restrictions and the revenue share that the Agency may take. Agencies on the other hand should balance the importance of controlling its intellectual property and brand image against the satisfaction of its VTubers and how that impacts the Agency’s ability to attract and retain talent.

Odin Law & Media represents a wide variety of clients in the VTuber space including independent VTubers, corporate VTubers, Agencies, tech companies, and more. If you are working in the VTuber industry and have legal questions, reach out!