Web 3.0 will drastically change the idol industry.

In the Showa era, idol singers played the leading role; in the Heisei era, group idols emerged; and in the 2025 era, anyone can become an idol. As the times change, idols, the pride of Japanese entertainment, continue to evolve.

What will happen to the industry in the future, which has even given birth to a genre called Web 3.0 idols?

What is the ‘pyramid structure’ of the idol industry?

Nakagawa: Today, I would like to talk about the current state of the idol industry, and I would also like to talk about the future of idols using Web 3.0-related technologies such as NFT and tokens.

Narita: I am rather familiar with the idol industry, but I don't know much about Web 3.0 and so on, so I would be happy if Mr Nakagawa could teach me. There aren't that many idols yet, but there are idols who are doing promotions involving NFT.

Nakagawa: Zubari: What is the state of the idol industry these days?

Narita: I think the idol industry can be roughly divided into three categories: a handful of major groups, such as the 46 groups (Nogizaka46, Sakurazaka46 and Hyuugaizaka46), underground idols and the middle between the two.

The middle tier and above are sometimes referred to as aboveground groups or semi-underground idols, in contrast to underground idols. The activities and business models of each of these groups are quite different, so even though they are all in the same idol business, there is a big gap between them.

The gap between the three tiers - major, intermediate and underground - is very large.

Nakagawa: Then, please tell us the difference between these three categories.

Narita: The major groups are what most people would imagine. Like the AKB group in the past and the 46 group today, they use the overwhelming popularity of the group itself as a backdrop to send their members to variety shows, magazines and other media work to earn money there.

Of course, they also make a lot of money from their live performances and merchandise sales. The important thing for such idol business models is to brand individual idols.

The idol's image is being deified so that fans will think, ‘I'll watch this programme if Fatty is on it’ or ‘I'll buy this product if Fatty is the image character’. Incidentally, since Morning Musume and AKB, it has become the norm for idols to work as a group rather than as individuals.

Nakagawa: Why is that?

Narita: People who support idols are attracted to the relationships within the group and what they see. This is true in everyday life as well, but the attractiveness of an individual can actually be seen in the relationships between several people. Rather than ‘just a cute girl’, it is more rewarding to support a person if you can see that he or she is actually a sweetheart, has leadership skills, or is a hard worker compared to other children.

Nakagawa: I see. So you raise the enthusiasm of the fans by showing the relationships within the group.

Narita: This system is actually convenient for the producers. Even if you invest money in a single idol and try to make her popular, it will all be for nothing if she goes up in flames on social networking sites. In contrast, with a group, you can carry other girls.

Nakagawa: So you are spreading the risk.

Narita: However, only major groups can do this. Major groups start out with the intention of eventually doing such business from the time they are formed, with the agency, record company, media and advertising agency all working together.

Major idols are able to promote themselves by having their own TV programmes and audition programmes even before they are formed. Conversely, it is almost impossible for an idol who is active as an underground idol to become a major group.

Various routes to becoming an idol

Nakagawa: Is it possible for underground idols to gradually sell out and become major groups?

Narita: I think the only underground idol group that has unexpectedly sold well and become a major group over the past few years is BiSH. There are a few other groups like Kanna Hashimoto and First Summer Uika (ex-BiS), who have something outstanding and have sold well as individuals despite coming from underground idol backgrounds.

However, it is not only those from group idols who sell in this way. As the terms ‘voice-over idol’, ‘gravure idol’ and ‘big food idol’ suggest, we live in an age where talented girls from any genre can sell in an idol-like way.

There are also more and more YouTubers and TikTokers who are like idols who have become popular as individuals and are earning money. In order for underground idol members to sell, they have to compete with idols who appear through other channels. In addition, Korean idols are also popular among young people these days, so rivals are not limited to the domestic market.

Nakagawa: It's a tough world. When I hear the term ‘underground idol’, I get the impression that they are not selling well and are performing live all the time in small live houses.

Narita: Everyone has their own definition, but I think the basic conditions for underground idols are that they perform frequently at small venues and that their main source of income is from selling goods and cheques at live venues. In addition to this, another feature might be that they are ‘rarely exposed to media such as TV and magazines’.

Nakagawa: So underground idols are active on a much smaller scale than major groups?

Narita: However, there are more than several hundred groups that could be classified as underground idols, so the level of popularity, treatment of idols, scale of activities and seriousness of the groups really varies a lot.

Some individual idols are just working as part-timers, while others want to one day perform in big venues or appear on TV. They are also produced by a wide range of people, from entertainment agencies to amateurs.

Incidentally, when we call them underground idols, it is usually girl groups, but recently there are more and more male idol groups doing the same kind of activities, and they are called ‘men-underground’. If you include groups that have even performed live for a little while, there are about a hundred groups.

Nakagawa: Incidentally, what is the goal of underground idols, or when can you say that they have ‘succeeded’?

Narita: For group idols, if we can perform at Zepp, which can hold 2,000 or 3,000 people, I think it's fair to say that that's the highest goal for an underground idol. Or rather, if you succeed to that extent, you are somewhere between major groups and underground idols, one of the three categories I mentioned earlier.

Nakagawa: So groups that are particularly successful as underground idols fall into the ‘in-between’ classification?

Narita: In addition to that, idols that are not specialising in underground idols, but are led and formed by a solid entertainment agency, could also be considered ‘in-between’. These groups release songs on a regular basis and, although not many, they can also appear in magazines and on TV from time to time.

However, the current idol industry is dominated by a few groups, and the reality is that there are very few cases of groups from this category growing into major groups.

Nakagawa: From what you say, do you mean that it is rare to find success among underground idols, and that ‘in-between’ groups rarely become major groups?

Narita: Yes, that's right. Although they are called the same term ‘idols’, there is a big wall between the three, and the activities and treatment of idols are completely different.

BiSH broke through this barrier, but in their case, they actually had excellent music creators and their members had overwhelming singing ability. Most underground idols can only dream of performing at Zepp. Most of them move from one small live house to another and from one event to another.

Underground idols are treated harshly and their lifeline is a cheque for a few hundred yen a piece.

Nakagawa: There seems to be a big difference in the treatment of idols between major groups and underground idols.

Narita: Major groups and intermediate groups led by entertainment agencies usually have a fixed salary plus a percentage. Without money, they are mentally unstable and there is a risk that they might get involved in bad things, so this is a necessary expense for the management to protect the brand.

The fixed salary alone guarantees an average working person's level, but in addition to that, the remuneration increases as a percentage depending on personal work and sales of goods. Incidentally, photo collections and commercials are returned to the idols themselves to a considerable extent, so the image may be similar to that of a bonus.

On the other hand, this is not the case for underground idols. If they receive a fixed salary of even a few tens of thousands of yen, they are treated fairly well, and usually only receive a percentage based on sales of goods, live appearances and cheques.

Nakagawa: How much do underground idols actually earn?

Narita: A few thousand yen per live performance, 100-300 yen per checker, and most of the money from product sales goes to the management, so it's a drop in the bucket. It may seem quite harsh, but if you are a popular member who can take dozens of cheques at each live performance, you can earn more than 200,000 yen a month. Underground idols, no matter how popular they are, can earn at most 100,000 yen a month.

Sometimes some of the salary is deducted to pay for costumes and lessons, so the take-home pay is even lower. Most people can barely make an average living with their day job and part-time jobs.

However, recently there have been an increasing number of cases where members perform live on video streaming websites and receive money for their performances, so it may be easier to earn money than it was a decade ago.

Nakagawa: You used to produce underground idols, didn't you, Narita-san?

Narita: My love of underground idols got the better of me, so I set up a business with friends and fellow fans. We incorporated the company and tried our best to improve the treatment of the idols, but it didn't work out at all. There were many things that we, the management team, failed to do, but it was fatal that we couldn't gather girls who were conscious of being active as idols, and I remember that all we did was instruct them on various misconduct and bad behaviour.

However, when you think about it, it is only natural that most girls would not apply for an audition for a group created by someone they don't even know who they are. Actually, there are also specialised entertainment agencies for underground idols, so they usually apply there.

Nakagawa: You must have gone through a lot of trouble (laughs). Incidentally, how much did it cost you to set up your underground idol business?

Narita: In my case, it was about 1 million yen before the first live performance. Gathering members was almost free of charge as I was introduced through SNS and acquaintances, but other than that, I had to spend money all the time. I need to pay for the members' costumes, lesson places, etc., find composers on SNS to write original songs, and ask professional dancers to do the choreography. ...... We also need to make goods to sell.

Nakagawa: It sounds like a lot of work, but if you have about one million yen, you can become an underground idol producer.

Narita: In fact, there are many people who are almost amateurs in the management of underground idols. As for the initial expenses, if you don't write original songs, borrow costumes and don't sell any goods but only cheques, you should be able to keep them down considerably. Because it is such an easy way to get started, there are still many producers who are constantly getting bad rumours. Some people don't like it and are doing underground idols as individuals.

Trading idols‘ NFTs to support members’ livelihoods?

Nakagawa: Underground idols are a business where the management is just barely making ends meet. I would also like to mention Web 3.0 idols, which have been on the increase recently. Prominent examples are ‘NFT IDOL HOUSE’ and ‘IDOL3.0 PROJECT’.

Narita: You can say this about both groups, but they are projects that were set up with the aim of becoming major groups from the start. NFT IDOL HOUSE’ is fully backed by NTV and Platinum, while “IDOL 3.0 PROJECT” has the strongest signboard in the idol industry, “produced by Yasushi Akimoto”.

Nakagawa: In NFT IDOL HOUSE, we have formed a group called Fuhua, and we sell NFT with portrait illustrations of our members. The NFT holders can chat with the members and propose projects that the members are challenging.

Narita: In reality, have you been successful in selling NFTs?

Nakagawa: The NFT is being traded on the NFT marketplace, and the floor price (minimum listing price) is 0.089 ETH, which is about 24,000 yen. The initial selling price is 0.05 ETH (¥13,000), which means that if 1,000 pieces are sold, sales would amount to ¥13 million.

If you think about it in comparison to general NFT art, it is ‘ slow to sell out, but thanks to a certain number of enthusiastic fans, it sells reasonably well, and the floor price is higher than the sales price because it has gained a certain level of popularity.

Narita: Sales of 10 million yen may seem a little short considering that it is a very rare merchandise for a major group, but the people who have NFT now will support it enthusiastically for the time being, so I feel that it has paid off in terms of increasing the enthusiasm of the fans.

Nakagawa: The IDOL 3.0 PROJECT sold the NIDT token (crypto asset) through a crypto asset exchange and received more than 1 billion yen in operating funds, and NIDT holders are expected to receive various benefits, including participation in some productions, invitations to limited events and the granting of NFTs. NFTs.

This amount of money was raised not only because of the ‘produced by Yasushi Akimoto’ sign, but also because of the involvement of so-called crypto-asset investors. Incidentally, NIDTs were sold at 5 yen per NIDT, but as of November they were worth about 70 yen.

Narita: The price has risen considerably.

Nakagawa: If the idols produced by IDOL3.0 PROJECT become more popular in the future, the price may go up even further.

Narita: It's kind of like a game where you identify which idols will sell, rather than supporting idols. I think it's good that there was a billion yen in revenue for the operation, but I kind of feel like if I had a NIDT myself, my cheering heart would be clouded (laughs).

NAKAGAWA: Be more active and soar! I think that would be a good thing, wouldn't it? The sale of tokens has a strong aspect of ‘fundraising’ for the operator and ‘investment’ for the buyer, so it seems like a strategy that only groups that have a signboard that says ‘produced by Akimoto Yasushi’ from the start can take.

Because it is an investment, the attraction is that it can involve investors other than those who are promoting the idol itself, but in return the enthusiasm to genuinely support the idol may diminish.

On the other hand, NFT is a kind of fan goods, so I think it will spread more in the future; the good thing about NFT is that you can check that the goods are genuine and that ‘anyone in the world can check who bought it, when and how long they have been holding it’.

From the fans' point of view, the NFT allows them to appeal to their old fans by saying, “I've been pushing ◯◯-chan for such a long time”. The management and idols themselves can also check who has kept the NFT.

Narita: That's a nice element as a fan.

Nakagawa: Also, NFTs can return a portion of the money from trades to the issuer, so for example, ‘the money from NFTs traded is returned to the members’.

Narita: So it's like the money is returned to the members from the second-hand sale of goods. Selling goods is a bit heartbreaking, but that seems like a safe way to sell them.

Nakagawa: NFT is something that can be traded, so if you prepare special offers that are likely to increase in price in the future, I think it will also stimulate trading.

For example, how about ‘if this idol performs at the Nippon Budokan, you can shake hands with them the day after’? The more likely it is that the Budokan concert will happen, the higher the NFT price will go. Besides, even if it doesn't happen, I feel I can somewhat forgive them, and it won't hurt the management's wallet right now.

Narita: That would be a lot of support. But as a fan of idols, I'm going to have a lot of trouble deciding whether I should sell that NFT for a profit or shake hands with it (laughs).

Web 3.0 idol business in the idol powerhouse of South Korea

Profile.

◉Ken Nakagawa

Freelance writer. He is an IT journalist specialising in the latest technology, and is familiar with Web 3.0 and NFT, having participated in the NFT art project. His favourite idol is 46-kei, and his current favourite is Hinano Uemura of Hyugaizaka 46. Her favourite idol song is ‘Tachizarichu’ by Nogizaka46.

◉Takehide Narita.

Entertainment production manager. He used to be an ardent fan of underground idols and started and produced an underground idol group with his friends, but the group disbanded due to a combination of member scandals and the Corona disaster. His favourite guess is Kato Kagura from the audition programme PRODUCE 101 JAPAN.

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