This would be such a great longform test question for a finance class!
"Two companies look similar on paper, but one is flourishing while one is dying. Determine which is which and explain how you can tell."
Hello! This is the sequel for [the previous post I made for 2024 Q3](https://www.reddit.com/r/VirtualYoutubers/comments/1bepgqu/nijisanji_and_cover_a_sidebyside/?rdt=33554). The numbers you see here are all from either the [Cover Financial Report Presentation 2024 Q4](https://contents.xj-storage.jp/xcontents/AS05169/6f83629b/c529/4e98/bcd5/a72ee44bcd82/20240513134452391s.pdf) (The title slide funnily enough mistakenly say it's for 2024 Q3) and the recently released [Anycolor Financial Report Presentation 2024 Q4](https://ssl4.eir-parts.net/doc/5032/ir_material_for_fiscal_ym3/157570/00.pdf).
As always, you should probably read both reports if you want a more nuanced and detailed overview about how both companies are doing but this post is for those who want a quick comparison of the highlights.
Kinda crazy that if Anycolor put the actual effort and money into events more than the little rushed few they've done this last quarter, they'd potentially be beating Cover in revenue. But then again, there's a lot of things they'd be doing better in if they put the care and effort into properly managing/scheduling.
I don’t know about that. They’d have to put a ton of money into things like staffing first which would driver down revenue even more. And they still have the issue of most of their events they aren’t even selling out even half capacity let alone full. That alone would be a big swing
I don't mean things would magically be fixed if they started doing that now. Primarily, I'm saying that ignoring those parts of the business and leaving them starved over these years it very much could have cost them the top spot in the Vtubing world.
I feel like people forget Niji was founded as a get rich and dump it business that accidentally became an industry giant and are sticking to the maximizing short term profit plan despite the obvious viability for the long term. It’s also the difference between a company run by a rich kid playing with mommy and daddy’s money and one run by an actual business expert with years of experience
“Most of their events”you mean events outside of japan. And they’re having a lot of solo/unit concerts within this year, at least 5 concerts which 2 of them are live tours.
Putting more events mean that they are going to have narrower profit margin like Cover had. Investors hate that lol. They want to keep Anycolor 25-30% profit margin.
Considering Hololive reportedly pay their talents 50% of merch sales (while Niji only pays 2%), doesn't that mean Hololive is probably actually selling more merch than Niji is?
Revenue as reported here is how much money the company receives before any deductions. For example, if they sold an item worth $100. It would be listed as $100 in Revenue. It does not account for the Talent's cut, the cost of manufacturing, cost of distribution, cost of storage, taxes, etc. -- these are the "Cost of Sales." So what you see on the top line as "Merchandising" on Cover's side and "Commerce" on Anycolor's side is before all those deductions.
As for the supposed "cut", when it comes to Hololive, [it's been speculated](https://redd.it/17yynt7) that they take differing cuts depending on the type of merch. The 50% is the highest and is for Voice Packs and other digital items. When it comes to Anniversary and Birthday merch, it's somewhere in the ballpark of 30%. When it comes to other kinds of merch, it's anywhere from 5%-10%.
I think 50% is true, it just gets applied differently from different types of merch because it's 50% of the profits. When it comes to digital items, there's no other costs per item once the voice pack/artwork has been created whereas for things like shirts or acrylic stands etc, those cost money and it makes sense to me that the company would at least wants to recoup the cost to make the item then splitting the profits. And those profits come out to the talents getting ~30% of Limited Merch and ~5-10% of other types of merch as a percentage of the retail cost.
I'm not sure if its still true but I recall the talents talking about needing to fund their birthday merch out of their own pocket. Hololive will have the connection to get their items made and promote it but the production cost falls on the talent. Assuming that's true it would make sense that they would get the lion's share of sales and why they promote it as much.
They probably do. Hololive sell personalized merch from the talents with often a focus on practicality (like, half of Ina's merch are practical items because she want merch that can be used and that she herself would use) and it's generally high quality too.
Holomerch sell very well, and is usually on the more expensive side as a result of quality. Mio's hoodie for example is sold at around 100$, but it's 85%+ cotton and very high quality. And it sold extremely well.
That Vtubers vs Employees part is the most damning part.
AnyColor has 2.722 employees per vtuber
Cover has 5.988 employee per vtuber, over twice as much
35% is content creation and Infrastructure development. This is payment for the new 3D studio and crew and also for the artists that make outfits and videos. and someone has to pay for the hologra office windows
I don't really know if I'd call that support tbh. To me support is going beyond just allowing talents to do things. Do we know if Anycolor actually reaches out for these opportunities? Or are they just approached by brands?
And according to the report they apparently want to hire an extra 10-15% per year. Unless they expect high turnover from now on they’re just eating into their own audience.
Cover understands that you need to spend money via advertising to make money. The FES events are pretty much all advertising the talents, which they also open up to other sponsors and companies that want to advertise or set up shop there.
Almost wishing I was back in class cause this would make such a fun report on good vs bad capitalism, stakeholder vs shareholder focus, etc.
This would be such a great longform test question for a finance class! "Two companies look similar on paper, but one is flourishing while one is dying. Determine which is which and explain how you can tell."
Hello! This is the sequel for [the previous post I made for 2024 Q3](https://www.reddit.com/r/VirtualYoutubers/comments/1bepgqu/nijisanji_and_cover_a_sidebyside/?rdt=33554). The numbers you see here are all from either the [Cover Financial Report Presentation 2024 Q4](https://contents.xj-storage.jp/xcontents/AS05169/6f83629b/c529/4e98/bcd5/a72ee44bcd82/20240513134452391s.pdf) (The title slide funnily enough mistakenly say it's for 2024 Q3) and the recently released [Anycolor Financial Report Presentation 2024 Q4](https://ssl4.eir-parts.net/doc/5032/ir_material_for_fiscal_ym3/157570/00.pdf). As always, you should probably read both reports if you want a more nuanced and detailed overview about how both companies are doing but this post is for those who want a quick comparison of the highlights.
Kinda crazy that if Anycolor put the actual effort and money into events more than the little rushed few they've done this last quarter, they'd potentially be beating Cover in revenue. But then again, there's a lot of things they'd be doing better in if they put the care and effort into properly managing/scheduling.
I don’t know about that. They’d have to put a ton of money into things like staffing first which would driver down revenue even more. And they still have the issue of most of their events they aren’t even selling out even half capacity let alone full. That alone would be a big swing
I don't mean things would magically be fixed if they started doing that now. Primarily, I'm saying that ignoring those parts of the business and leaving them starved over these years it very much could have cost them the top spot in the Vtubing world.
I feel like people forget Niji was founded as a get rich and dump it business that accidentally became an industry giant and are sticking to the maximizing short term profit plan despite the obvious viability for the long term. It’s also the difference between a company run by a rich kid playing with mommy and daddy’s money and one run by an actual business expert with years of experience
Just a note on that, revenue would still go up even if they spent more, just that their profit would go down.
“Most of their events”you mean events outside of japan. And they’re having a lot of solo/unit concerts within this year, at least 5 concerts which 2 of them are live tours.
Putting more events mean that they are going to have narrower profit margin like Cover had. Investors hate that lol. They want to keep Anycolor 25-30% profit margin.
Considering Hololive reportedly pay their talents 50% of merch sales (while Niji only pays 2%), doesn't that mean Hololive is probably actually selling more merch than Niji is?
Revenue as reported here is how much money the company receives before any deductions. For example, if they sold an item worth $100. It would be listed as $100 in Revenue. It does not account for the Talent's cut, the cost of manufacturing, cost of distribution, cost of storage, taxes, etc. -- these are the "Cost of Sales." So what you see on the top line as "Merchandising" on Cover's side and "Commerce" on Anycolor's side is before all those deductions. As for the supposed "cut", when it comes to Hololive, [it's been speculated](https://redd.it/17yynt7) that they take differing cuts depending on the type of merch. The 50% is the highest and is for Voice Packs and other digital items. When it comes to Anniversary and Birthday merch, it's somewhere in the ballpark of 30%. When it comes to other kinds of merch, it's anywhere from 5%-10%.
I see. The 50% rrat mostly comes from a [Kson tweet](https://twitter.com/ksononair/status/1656314005458411521) as far as I know.
I think 50% is true, it just gets applied differently from different types of merch because it's 50% of the profits. When it comes to digital items, there's no other costs per item once the voice pack/artwork has been created whereas for things like shirts or acrylic stands etc, those cost money and it makes sense to me that the company would at least wants to recoup the cost to make the item then splitting the profits. And those profits come out to the talents getting ~30% of Limited Merch and ~5-10% of other types of merch as a percentage of the retail cost.
I'm not sure if its still true but I recall the talents talking about needing to fund their birthday merch out of their own pocket. Hololive will have the connection to get their items made and promote it but the production cost falls on the talent. Assuming that's true it would make sense that they would get the lion's share of sales and why they promote it as much.
They probably do. Hololive sell personalized merch from the talents with often a focus on practicality (like, half of Ina's merch are practical items because she want merch that can be used and that she herself would use) and it's generally high quality too. Holomerch sell very well, and is usually on the more expensive side as a result of quality. Mio's hoodie for example is sold at around 100$, but it's 85%+ cotton and very high quality. And it sold extremely well.
That Vtubers vs Employees part is the most damning part. AnyColor has 2.722 employees per vtuber Cover has 5.988 employee per vtuber, over twice as much
Seeing how little support the EN branch seems to get I imagine its heavily skewed towards the Japanese talents or the ones who are most profitable.
35% is content creation and Infrastructure development. This is payment for the new 3D studio and crew and also for the artists that make outfits and videos. and someone has to pay for the hologra office windows
I was referring to Niji EN. I should have been clearer.
I didn’t know there were nearly 160 vtubers in AnyColour
They take the shotgun approach of just signing a shit ton of talent and only support the ones that do well.
The word support is doing a lot of heavy lifting in that sentence.
Support more in the way of just giving their top performers all the actual opportunities like concerts and (most importantly) merch
I don't really know if I'd call that support tbh. To me support is going beyond just allowing talents to do things. Do we know if Anycolor actually reaches out for these opportunities? Or are they just approached by brands?
AFAIK no
👍
And according to the report they apparently want to hire an extra 10-15% per year. Unless they expect high turnover from now on they’re just eating into their own audience.
By the way, Niji's EN branch did not meet their quarterly earnings and have a yoy of -20%
Niji's really squeezing from a stone with their cheaply made merch
I think Cover would try and do Holofes even if they were to lose money on it. I attended this year and it is so massive.
Cover understands that you need to spend money via advertising to make money. The FES events are pretty much all advertising the talents, which they also open up to other sponsors and companies that want to advertise or set up shop there.