FREE Trademark Search Report:
How To Do A Trademark Search

Get this FREE report now to: Perform a trademark search quickly and easily; Protect your brand—legally!; Save time and money with a trademark public search; Avoid potential legal conflicts

Upgrade to Premium Membership NOW for Just $147!
Get 3 Months of Full Premium Membership Access
Includes Our Monthly Newsletter, Licensing News, Deals, and Contacts
And MUCH MORE!

Special Report: The Rise of the Virtual Influencer

By Gary Symons, TLL Editor in Chief 

Last month I read a story in Scientific American about the theory that all of humanity, and in fact, all of reality as we know it, exists within some sort of simulation—as if we are just bit characters in an insanely advanced videogame. 

I scoffed at the idea, as my wife pointed out that anyone who thinks we live in a simulation has never tried to dig a hole in our annoyingly rocky backyard! The blisters are very, very real.

That said, research I’m doing on the future of character branding has me rethinking the very nature of reality, and even whether real people will become obsolete in our licensing industry. The reason? A new technology and growing trend involving “virtual influencers” who are really just computer generated images (CGI) used in video games, music videos, movies, and as influencers on Instagram. 

Shockingly, some completely artificial ‘people’ are now ranked as top influencers on Instagram, and their reach is accelerating thanks to a confluence of Artificial Intelligence, hologram technology, CGI animation, AR/VR, and how all of these are being used in modern entertainment. 

According to Influencer Marketing Hub, which allows you to track influencers using Rank Search software, the top five influencers on Instagram on Nov. 24 were Kylie Jenner, Cristiano Ronaldo, Leo Messi, Kendall Jenner, and Selena Gomez, ranked by “Authentic Engagement.”

In terms of followers, four of the top five (excluding Kendall Jenner) had roughly 200 million followers, well over half the population of the United States. 

The World’s Most Popular CGI influencer

Are they live, or are they Memorex? Real life model Bella Haddid (Left) with digital Virtual Influencer Lil Miquela.

What is startling, however, are the stats for a character who literally doesn’t exist, named ‘Lil Miquela’ (https://www.instagram.com/lilmiquela/?hl=en). Miquela is not a human being, nor is she based on a human being. Rather, Miquela is a CGI character who stars in music videos like ‘Automatic’ (https://www.youtube.com/watch?v=zE1J9JxqhFo) that will drag you kicking and screaming into the uncanny valley. 

That video, which is just one of several on YouTube, has enjoyed 4.5 million views since it premiered one year ago, and Miquela has a staggering 2.8 million followers on Instagram. Not bad for someone made entirely of pixels. 

So, Who is Miquela, Really?

For that, you need to travel down the information superhighway to the URL brud.fyi, which is the ironically lame website of a company formed to create lifelike Virtual Influencers. The site is deliberately terrible, consisting of a Google Document that reads, “Brud is a transmedia studio that creates digital character-driven story worlds.” Further down, the site answers the question “Is Miquela real?” arguing, “As real as Rihanna,” and inviting businesses to contact them for licensing deals: “COVID-19 has hurt my business and I think Brud may be able to help can we talk?”

Other than that, you have to look elsewhere to track down more information on Miquela’s digital birth parents, and the trail leads you to founders Trevor McFedries and Sara Decou. The pair of tech entrepreneurs (and here I’m assuming they, too, are actually real) have a fairly beefy bio on the Business of Fashion’s BOF 500 list of the fashion industry’s top influencers. According to BOF, the pair birthed Miquela in 2016, who at the tender age of four years old has now amassed licensing contracts with major fashion houses like Chanel, Burberry, and Fendi. In 2018 their company Brud snared $6 million in venture capital funding, rumored to include Sequoia Capital, BoxGroup and SV Angel. 

Are Real People Obsolete?

So, why is all this important? Skeptics will argue that 2.8 million followers do not an empire make … but that ignores the rapid growth of other virtual influencers, particularly during the COVID-19 pandemic. 

Soon after receiving Brud’s new funding round, Miquela announced her Instagram account had been hacked by someone named Bermudaisbae. a less popular virtual influencer considered a bit more ‘right wing’ than Miquela. Brud co-founder McFedries confirmed the account had been hacked by “some redditor idiots,” but that too wasn’t real. 

In fact, Bermuda was another Brud creation, and the company cleverly set up an ongoing drama in which the two fake people engaged in an equally fake feud, before eventually making up. Now, Miquela and Bermuda sometimes show up on each other’s feeds.

A year later, as Brud brought out more characters and landed more deals, the company was closing on another round worth $20 million at a valuation of $125 million, with Spark Capital taking the lead. OnBuy estimates Miquela alone will earn roughly $12 million this year as she models for Calvin Klein, Prada and more.

But Brud is far from the only player in this field of virtual influencers. 

Aww Inc. in Japan raised $1 million in its seed round, creating new influencers named Imma and her brother @plusticboy, and Imma quickly locked down lucrative contracts with furniture giant Ikea and fashion shoe icon Salvatore Ferragamo. 

Virtual Influencer Imma from Japanese tech company Aww Inc. snagged a very real contract with Ikea. By the way, the dog’s not real either.

Perhaps more significantly, major gaming companies are now jumping into the fray, led by Riot Games, which produced the massively popular online game League of Legends. Their character Seraphine (@seradotwav) is not only a major influencer on Instagram and other social media, but also became a playable character on October 13th in League of Legends, which hosts roughly eight million players every day. 

Patrick Morales, the character’s creative director at Riot Games, told Bloomberg Businessweek that being fictional doesn’t make Seraphine any less relatable to her audience of gamers. 

“Knowing the interests and browsing habits of our young and tech-savvy player base… it became apparent that social media provided a potential platform for storytelling in a way that wasn’t possible for other parts of our fantasy-based IP,” he argues.

Seraphine has already reached 462,000 followers on Instagram as of November, but what is truly impressive (or terrifying, depending on your outlook) is the road Riot Games is following.

Videogaming + Music Videos + Virtual Influencers = $$$$

If you haven’t heard of K/DA yet, you are hopelessly behind the times, just like I was six months ago when my daughter introduced me to the “virtual girl group” posting up League of Legend-themed music videos on YouTube. 

K/DA was unveiled by Riot Games at the 2018 League of Legends World Championship with an augmented reality live performance of their first song, “Pop/Stars“. The music video went viral, surpassing 100 million views in a single month and subsequently topped the Billboard World Digital Song Sales chart. 

Based on the popular appeal of both male and female K-pop groups, K/DA has not yet been released as a Virtual Influencer … but is there any doubt that they will be? After all, the aforementioned Seraphine has now entered the game with her magical, music-based abilities, and has already collaborated with K/DA on new music. 

Virtual influencer Seraphine enjoys a day at the beach.

When one thinks of virtual influencers on their own, it’s difficult in some cases to see how they can compete head-to-head with real people, who have real lives, who appear in concerts, or score the winning goal in soccer games, or star in Hollywood blockbusters. However, that distinction is blown to smithereens when those virtual influencers are based on videogame characters. 

Sure, Cristiano Ronaldo may well be the greatest soccer (aka football) star of our time, but when is the last time he played a dragon or a troll? 

You get my point, but to really hammer it home, like a virtual sword into the heart of a mythical beast, consider that the videogaming industry brings in more revenue than the digital music industry, film box office, or even television. In fact, as we reported in the The Licensing Letter last month, videogaming at $160 billion annual revenue is close to the combined revenue for music, film and television COMBINED, which notched $163 billion. 

When you transform videogame characters into eerily real virtual influencers, is it unlikely that at some point those unreal characters will some day top the Instagram charts?

Virtual influencers, after all, come with a host of advantages. Consider Jennifer Lopez or J-Lo, who is now in her 50s and remains one of the world’s top pop stars and social influencers, and recently headlined the American Music Awards. Despite being in great shape, Lopez like any other human being really has to work at it, supported by a fleet of fitness instructors, makeup artists, and fashion advisors. Unlike virtual influencers, J-Lo will occasionally get sick or twist an ankle, and eventually she will get too old to perform. 

By contrast, Miquela will never get sick, or old, or tired, and she can appear in both New York and Tokyo on the same day, or even simultaneously, points out Christopher Travers, who covers this new industry on his website Virtual Humans.

“Virtual influencers, while fake, have real business potential,” says Travers. “They are cheaper to work with than humans in the long term, are 100% controllable, can appear in many places at once, and, most importantly, they never age or die.”

So, should ‘Real Life Influencers’ be worried? Social engagement tech guru Jeremy Haile says yes, and perhaps brands should think twice as well. Haile is the founder of Sideqik, a software influencer engagement platform that helps companies find the right influencer fit for their products and brands. 

“Virtual influencers are perfectly crafted versions of what their creators assume their audience is interested in,” Haile says. “Instead of searching for a human influencer that embodies similar aesthetics and values, brands can design a virtual influencer that fits their exact parameters. 

“This could result in a loss of authenticity for the brand, no matter how transparent they are about their use of virtual influencers,” he argues in an opinion article on Talking Influence. “Furthermore, the unrealistic standards imposed by virtual influencers can enhance unhealthy stigmas surrounding beauty and attractiveness. When you’re programmed to an unattainable level of style, virtual influencers are no longer relatable—they are avatars bending to the whim of a talented group of copywriters and designers.”

However, as Haile notes, real influencers are different in the sense that they are real people with real accomplishments, like Cristiano Ronaldi and his stellar career in sports, or the singers and movie stars who rank among Instagram’s Top 10.

But, what if virtual influencers have their own list of accomplishments in what now passes for our real world?

Holograms and Augmented Reality Changing the Game

Eight years ago Snoop Dogg dropped jaws at Coachella 2012 when he closed out his set by performing with a hologram of deceased rapper Tupac Shakur. Reactions were a bit mixed, with some finding it creepy, and others blown away by the possibilities. One of the latter was Martin Tudor, who in 2018 partnered with former Clear Channel CEO Brian Becker to launch Base Hologram, a production studio for holographic performances. 

Based on the Tupac idea, Base has pushed forward by securing the rights for artists who have passed away, like Buddy Holly, Roy Orbison, opera singer Maria Callas and this year setting up a tour for a virtual Whitney Houston. 

However, the same technology works equally well with virtual people who never existed, as it does for people who did exist in the past, and the same goes for the even more powerful technology behind Augmented Reality (AR). 

The Virtual Girl Group K/DA Performs … sort of … at the League of Legends World Championship.

In 2018, as noted earlier, Riot Games kicked off the LOL World Championships in Korea with a live concert that featured both real and illusory artists, and of course, an audience of real people watching the spectacle wearing AR lenses. Riot had experimented the year by having a dragon fly over the crowd, but the K/DA concert went absolutely viral. Following the event, the song topped the Billboard music charts, was number one on Google Play for top songs, number one on iTunes for K-Pop, number two on iTunes for all pop, and had more than 242.8 million music streams in 2018 alone. Riot has followed with increasingly advanced concerts at their 2019 event and in last month’s world championships in Shanghai, which featured a mixed performance featuring live singer Leixi Kiu and live dancers on stage with the virtual K/DA and Seraphine performing via a mixed AR/VR (Virtual Reality) presentation, all topped off with the appearance of a gigantic, towering figure of LOL character Galio, the ‘Stone Colossus’. 

In short, videogame characters are literally jumping out of our screens and into our real world, and fans are showing up. 

What Does the Future Hold for Virtual Influencers?

Clearly, CGI-generated virtual influencers are here to stay. They already hold dozens if not hundreds of licensing contracts and have millions of fans around the world … but it’s worth pointing out this is just the beginning. As advanced as characters like Lil Miquela and Seraphine are today, they are like the first antiquated automobiles that took over from the horse and buggy in the early 20th Century. 

A venture capital company called Betaworks is betting on the future of influence by investing heavily in CGI-generated influencers who are powered by Artificial Intelligence, or AI. 

Right now we are seeing the phenomenon of ‘dumb’ virtual influencers. Their every image is generated, their moves on stage are choreographed by programmers, and their conversations and songs are performed by actors and singers. 

But the general director of Betawork’s startup bootcamp, Danika Laszuk, says the future of influence will be digital beings (human or otherwise) who can essentially think and speak on their own through AI. In a series of interviews, Laszuk has described a world in which AI allows programmers to easily and quickly create new animations and worlds … but more importantly, to allow real time conversations between influencers and the people they are trying to influence.

Laszuk is already looking toward a future in which the AI behind the influencers will independently post images and captions to Instagram, and interact directly with people on Twitter. The idea is not new, as she points out. Microsoft infamously launched a chatbot named Tay in 2016 that was designed to tweet like a teen, but as other Twitter followers interacted with the chatbot, Tay began tweeting out racist and sexist comments that the AI picked up from the nasty humans it interacted with on the web. 

But four years is a long time in the world of computer technology, and AI has already come a long way. Betaworks, among others, is betting that AI will allow virtual influencers to someday be almost indiscernible from human beings on the web. 

Entering the Uncanny Valley

In the AI world today, this is defined by the Turing Test, devised by the visionary British scientist Alan Turing 65 years ago. Under that test, an AI must be able to fool 30 per cent of humans in a five minute chat conversation that it is human, not a machine. That gap between human and machine sentience is known as the uncanny valley, referring to the creepy feeling people get when something is almost, but not quite, human. 

Two years ago Google said their Duplex AI had defeated the Turing test, using the company’s new ‘natural language processing system’ that is being incorporated into digital assistant Alexa. Her conversations frequently fooled human test subjects that they were making appointments with a human being. 

Another trip through the uncanny valley happened at the AI Foundation’s 2020 ‘Virtual Beings Summit’ when digital humans hosted a Zoom conference call, and many of the human attendees were convinced the CEO Lars Buttler was real for over 15 minutes. 

I personally wasn’t that convinced by the video posted on YouTube, but it was an extraordinary signpost that points to the direction we’re going. 

With the far more sophisticated animation being developed by virtual influencer companies, one can see how quickly we will begin to see AI-driven, digital characters who we will interact with every day through our social media, in movies, on television, in live events like the Riot Games’ concerts, and even in the streets of our cities and towns, either as holograms, VR projections, or even lifelike robots.  

That future was already mapped out for us by the character The Doctor, who was an intelligent hologram serving as the physician in the Star Trek Voyager series between 1995 and 2001, and more recently in films like Her or Blade Runner 2049.  

As often happens, the future has arrived earlier than expected, as major brands around the world negotiate for licensing deals with people who literally do not exist, in a market that is very real and incredibly lucrative. According to a study by InfluencerDB, $5 billion was spent on Instagram influencer marketing in 2018, and 39% of all of Instagram’s accounts are run by influencers, all courting an audience of more than a billion users. Whether one likes it or not, virtual influencers are being driven by pent up demand created through our already existing digital lives, whether it be animated films, video games, or the virtual assistants we speak to every day, and it is a trend that is here to stay. 

CLOSE TO VIEW ARTICLE x

You have 3 articles left to view this month.

Your 3 Free Articles Per Month Goes Very Quickly!
Get a 3 month Premium Membership to
The Licensing Letter for just $147!

Sign up now and get unlimited access to all articles, archives, and tools for The Licensing Letter!

Close

EMAIL ADDRESS


PASSWORD
EMAIL ADDRESS

FIRST NAME

LAST NAME

TITLE

COMPANY

PHONE

Try Premium Membership

(-000tll)
()