Hatsune Miku, the Emergence of Global Value Co-creation
Abstract
Our study explores how value is created in the context of Hatsune Miku (HM), a phenomenal
virtual celebrity originated in Japan. The study employed an evolved-grounded-theory
analytical approach to analyze a range of data including interview with the CEO of HM
developer, technical details of the HM software and more than two hundred fan-generated
comments online. Our analysis from three perspectives of technicality, business model and
consumer experience has found that the co-created value of HM goes beyond individual
technical developers and individual consumer capacities. With Crypton Future Media (CFM)
having used the advanced voice synthesizing technology innovated by Yamaha to create HM,
our evaluation indicates that the value co-creation process - reflected within a complex, cotrusted business model with rich and salient socio-cultural attachment emerging within multiparty involvement - are main drivers of HM’s success. The rising fame and fandom of HM
lies on two underlying factors: the power of involving multi-stakeholders and multi-processes
in co-creating the desired HM production, and the power of socio-cultural appropriation and
legitimation of the authenticity of HM expressed by the anthropomorphic characterization of
HM as the souled idolation ontology of their fans.
Keywords: value; co-creation; virtual celebrity; singing synthesizer; business model;
anthropomorphic agent
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Introduction
As of August 2013, Hatsune Miku (HM) has over 100,000 released songs, 170,000 uploaded
YouTube videos and one million created artworks, with over 900,000 fans in Facebook
(Crypton Future Media, 2013). She has sold out “live” concerts from Tokyo to Los Angeles,
stars in her own video game project Diva produced by SEGA Games which has sold more
than 1 million copies (SEGA, 2012). She has been “hired” to advertise some of the world’s
top brands including the launch of Toyota’s 2011 Corola series cars (Sweet, 2011) Google’s
Chrome advertisements in Japan (Google Chrome Japan, 2011) and most recently in 2013,
Dominos Pizza Japan’s iPhone App (Domino's, 2013). She has been the featured topic of
news stories from the UK’s BBC to America’s CBS News, and has captivated the hearts of
fans around the world. HM is not human and in some ways could be seen as being similar to
popular animated characters such as Mickey Mouse or Hello Kitty. However, her rise to
stardom and global fame has developed in a completely new and unique way denoting a
testament to the growing importance of value co-creation in modern marketing practices. In
fact, her body of work is not "created" by any one individual, but is the sum total of many
different professional and amateur collaborators in Japan and around the world.
Contributing to the area of innovation through value co-creation (Vargo et al, 2008), the paper
investigates the nature, process and configuration of the co-creative interaction between
consumers, related communities and firms in the context of virtual celebrity of HM from the
perspectives of technicality, business model and virtual consumption experience. The next
sections will discuss and review related literatures of the three perspectives, followed by
method, analysis and discussion. The paper concludes with implications and future research.
Theoretical background
Re-focusing on value and its creation
Traditionally, from consumer view value is concerned with perceived desirable outcomes of
consuming an offered product or service (Oliver, 1999). It is an experience within specific
context with interactive, relativistic, and preferential characteristics (Holbrook 1994); it has
tangible and intangible aspects (Pine & Gilmore, 1998; Skytte & Bove 2004); and when the
desired outcome is achieved, high involvement will develop (Woodruff 1997). From the
provider/firm view, value is the essence firms aim to deliver that in turn brings financial and
related benefits to them, as well as to the consumers they serve and to society at large (e.g.
Gundlach and Wilkie, 2009). More specifically the AMA 2007’s definition indicates three
main components of value: value originator, value offering, and customers at large. Thus,
from these views the firm has been positioned as the main, sole value originator and creator.
However, these views have not yet embraced the potential for value to be developed and built
together by firms, their customers and other potential value contributors. In fact within the last
decade, the meaning of value and the process of value creation have rapidly been shifting
from a product- and firm-centric view to the one that incorporates personalized consumer
experiences (Cristiano, Liker, & White, 2000) with the increasingly important role of
consumers who are networked, empowered, and active in co-creating value with the firm
(Prahalad & Ramaswamy, 2004; Payne, Storbacka & Frow, 2008). In this view value is cocreated by the consumer and the firm; the co-creation processes form the basis of such value
creation; and individual consumers are central to the co-creation experience (Prahalad and
Ramaswamy, 2004). The following sections will review literature of each of the three
perspectives of technicality, consumer experience and business ecosystem in order to outline
the sources of value.
Technical background: Vocaloid singing software
Over the past five decades researchers have continued working on creating the technology to
enable computers to sing. However, in most cases the resulting voices have sounded
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mechanical, and the performances lack feeling. Musicians were already able to create
convincing instrument simulations using state-of-the-art synthesizer and sampling
technologies, but high-quality simulation of that ultimate instrument—the human voice—
remained elusive. The situation finally changed in 2003 when Yamaha launched Vocaloid
(version 1/V1), the world's first serious commercial singing synthesizer—driving the
technology out of the research world and into the real one (Yamaha, 2012). The Vocaloid
technology consists of three key parts: the singer library, which stores the sound fragments
broken from recording of a live singer, such as vowel, consonant sounds and pronunciations;
the score editor, which is an interface to allow user to enter lyrics and notes, and to edit and
adjust these as necessary to get the desired nuances; and the synthesis engine, which
concatenates the voice elements to generate the singing voice, by splicing vocal fragments in
the frequency domain. This signal processing part was developed through a joint research
project led by Kenmochi Hideki at the Pompeu Fabra University in Spain in 2000 (Anon,
2013). By improving the sound quality from the synthesis engine and the score editor
according to user feedback, a new version, Vocaloid version 2 (V2) was launched in 2007
(Yamaha, 2012). Sapporo-based Crypton Future Media (CFM) adopted V2 to create HM,
which soon became a major hit in Japan with a boom in the creation and dissemination of a
range of HM’s products (Yamaha, 2012). Now, with vocaloid available, the value co-creation
of music products by non-musicians are made possible.
Virtualized consumer experience
Enjoying HM can be seen as a form of virtualised consumption that signifies experiential
pleasures it may bring to consumers not from materialised consumption or tangible encounter.
Conceptually this virtualized consumer experiences with limited material existence challenges
classical theories of consumption based on rational or utilitarian needs (Firat and Dholakia
1998). Similarly Kline, Dyer-Witheford and de Peuter (2003) proposed that virtualised
consumption represent the latest stage of the subtle transformation of consumption practices
from utilitarian emphasis to pursuing aesthetic, emotional, symbolic and experiential value.
As consumer culture increasingly moves away from the material ingredient, the experiential
orientation put individual consumers as a main creative power that reconfigure the process,
output and the types of consumption practices. Conceptually virtualised consumption can be
seen as rooted in experiential consumption theory that signifies feeling, fun and fantasy as
essential element of experiential consumption making it distinct from utilitarian consumption
(Holbrook and Hirschman 1982). Similarly related work (e.g. Baudrillard, 1998; Campbell,
1987; Featherstone, 1992; Lee, 1993) conceptualize consumption as a symbolic, aesthetic,
imaginary experience. Later, our analysis and discussion used these characteristics to identify
the salient values experienced by HM fans and the corresponding creation processes.
Business ecosystem model
Exploring the underlying ecosystem within which a business operates is one rapidly evolving
branch of epistemological academic inquiry within the larger, multi-disciplinary field of
Systems Thinking. Such thinking allows researchers to first conceptualize and then optimize
large, complex and interrelated systems and is especially well-suited for the study of highly
complex co-creative systems such as the one that has developed around HM. Such analysis of
systems was first formalized within the operations research literature with Bertalanfy's
Systems Theory (1956). This was then enhanced and expanded upon by Churchman (1968)
and Checkland (1972) who focused on "real world" problems and issues, and their work was
brought into business research most effectively through Porter's conceptualizations of firm's
internal value chains and external value systems for further mapping strategy development
(Porter, 1985). Senge (1990) further enhanced the role of systems thinking within business
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research and practice as the 5th of his five disciplines, again stressing the overall system
within which firms operate as central to successful firm performance. Moore (1996) first
introduced the term "business ecosystem" to describe the interactions between firms,
competitors, customers and other stakeholders to resemble biological ecosystems. Later in
Japan, Natsuno (2003) and the leadership team of NTT DoCoMo applied similar "ecosystem
thinking" to design Japan's i-mode mobile Internet service. Levien (2004) has highlighted the
strategic importance of using such ecosystems for planning and strategy development, which
we will use as one of our three means of inquiry into the value of HM.
Methodology
We explore the characteristics and process of value co-creation of HM via analyzing the
originator-producer, the product and the consumers using three perspectives of technicality,
consumer experience and business model. As this is the first academic inquiry into the HM
phenomenon, we employed an evolved-grounded-theory approach (Corbin & Strauss, 1990;
Glaser and Strauss, 2009), to enable theoretical insights to emerge from each of the three
perspectives, which insights we hope will serve as the foundation for further theorization. The
following data and information collected in 2012 to 2013 were included for evaluation and
analysis: (1) a 90-minute interview with Hiroyuki Itoh, the CEO of CFM, regarding his views
on value co-creation and development of HM, (2) technical details of the HM software that
we purchased to conduct a series of technical tests, and (3) the analysis of 200+ fan-generated
comments from online portals and websites including (a) CBS News (Johnson, 2012), (b)
Facebook (e.g. https://www.facebook.com/pages/Hatsune-Miku/10150149727825637) and (c)
one of the most prominent HM fan websites (e.g. www.mikufan.com).
Results and Discussions: HM value co-creation characteristics and process
Technicality
Singing Synthesizer enhanced by Web Technology
Technically HM is a singing synthesizer application with a humanoid persona created by
CFM using Yamaha's singing synthesizing technology of Vocaloid version 2 (V2). The boom
of HM has also been driven by web, through which different creators such as songwriters,
song creators, illustrators and computer graphic creators interact and co-develop the products
(Hamasaki, Takeda & Nishimura, 2008). With the increase of remix works and the steadily
growing global demands, CFM engages consciously in the promotion, support and cultivation
of the HM community. CFM launched a website called Piapro (which is short for “Peer
Production) (http://piapro.jp) three months after the release of the HM software. This website
is a consumer-focused media platform where users can collaborate and share their creations.
Users can upload their music, illustrations and lyrics onto Piapro. The works must be for noncommercial use and users are encouraged to show their gratitude to the original creators by
sending the messages on Piapro. More than 600,000 works have been posted on Piapro.
Without the rapid development of contemporary web technology, this activity wouldn’t have
occurred.
Consumer experience
Socio-cultural attachment
Since the launch of HM, a profound passionate relationship between HM and her fans has
emerged (Aroean and Sugai, 2013). Our analysis further indicates that the socio-cultural
attachment has been generated because HM is simultaneously stimulating, actualizing,
experimenting and collaborating. HM is stimulating because it gives the desired freedom for
consumers using resources and experiences so that they can obtain an (representative) ability
to sing. In terms of actualizing, HM fans can actualize their latent desire in making and
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performing songs they like others to listen which could not be expressed in any other manner.
Lyrics, types of music, types of voice tone, and dancing style performance are the productions
where consumers may enact their dreams in musicality and singing realms. HM fans actualize
their ideal imaginations or fantasies, like being a great composer or a choreographer that
possess the ability to compose a fantastic song and to create a singing performance.
Regarding experimenting, HM fans enjoy experimentally exploring and combining different
features available, including adopting different kinds of music, lyrics and voices, even
possible for unable music individuals. Adopting the concept of playfulness (Aroean, 2012),
the stimulating-actualizing-experimenting-collaborating may be regarded as a specific type of
symbolic interaction where the fans freely and enjoyably express their skills through creative,
mental activity of producing HM singing productions. This is because the situation with the
stimulating-actualizing-experimenting-collaborating properties may only happen where
profound symbolic exchanges exist. Furthermore, as this highly abstract, symbolic interactive
situation of creating HM productions exists within a collective, co-creative environment
among HM fans, the attachment resulted is unsurprisingly rich with Japanese socio-cultural
values.
Business model
As outlined in Figure 1, the ecosystem within which HM was created and through which
money, creativity, content and awareness flow:
Fig. 1 Value co-creation map
Beginning from the original vocaloid patent holder, (1) Yamaha Corporation licenses the
fundamental technology patents to (2) CFM exchange for licensing fees. Then in turn, CFM
has integrated the image and voice of HM to their own pre-packaged vocaloid software which
they sell to both professional and amateur (3) Music Creators. CFM sells this software both
directly from its own proprietary website as well as through online and offline retailers. The
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interactions between these three main players create a standard value exchange, in which the
producers (1) and (2) jointly accrue value from the sales of software to (3) music creators.
And in turn, the music creators obtain value through the use of the software product to create
customized musical works. Music creators then post their creations to (4) commercial
websites including YouTube, Nico Nico Douga, and CFM’s Piapro. Once these original
songs are shared through these websites, other fans (5) who would like to enhance upon the
original works created by the music creators then add additional animations or lyrics to these
works, and once again re-post them on one of the commercial websites. Such hedonic valuecreation exercises have also been well explored in the extant marketing literature (Gentile et
al., 2007). But in an ecosystem built around a global music star, we also see the inclusion of
(6) Professional Industry Players such as Sega and Kadokawa Publishing within the cocreative environment. These players have their own special licensing relationships with CFM,
and simultaneously aim to discover the most popular videos through (4a) commercial and
(4b) fan sites. Once they have found appropriate content, these players will either license
these from their creators or work directly with other professional creators to develop unique
content. This content is then used to develop stand-alone (7) Marketable products such as
concert events, Game Software, CDs and DVDs to sell to fans not only in Japan but (8)
globally. And as the popularity of HM continues to grow both on and offline, an increasing
number of (9) new and prospective end users are brought into the ecosystem, becoming
paying fans or even collaborators and co-creators themselves. In sum, the map explicates
what, when and how the values - e.g. music, lyrics, and animation contributed to the building
of HM community and marketable end-products such as concert - created and added by
different contributors.
Conclusion, implications and future research
Through examination of technicality, business model (eco-system) and consumer virtual
experience, we identify that value co-creation of HM reflects a profound shift of consumption
to virtualized consumption culture and socio-psychology. As such, the underlying force of the
fame and fandom of HM lies on two things: the power of involving multi stakeholders and
multi-process in co-creating the desired HM production, and the power of socio-cultural
appropriation and legitimation of the authenticity of HM demonstrated by the
anthropomorphic characterization of HM as a production of the souled idolation ontology.
Theoretically, the findings suggest a number of implications. First, trust is strongly implied
here, that HM has been used for common, good purpose, i.e. facilitating and enabling musical
expressions from consumers, including those with no singing ability. Second, voluntarism or
non-profit motive, probably more than simply altruism, exists, especially from animationlyric enhancers (no. 5 in Figure 1). Arguably, the enhancers, who are experts in their areas,
have done this for free simply because of passion, enjoyment and fun. Third, using the
concept of playfulness (Aroean, 2012), playfulness is fully facilitated here where fans enjoy
symbolic interactions by and among themselves in freely expressing their skills.
A number of practical implications exist. First, in the context of virtual product, innovation
that emulates the cultural essence of a society offered with limited reservation of rights may
become a business model trend. The market grows due to empowering individual to coinnovate and co-create the end products and production. Second, firms may initiate ‘basic’
software - rather than a completed, fully furnished one - that enables further open, voluntary,
co-creation process of production. In the long run, the initiating firm will still harvest its
investment soundly. Third, the community develops then acts as active marketers for the
product or character, which is another valuable ‘return’ for the investing firm.
While HM is originated and rich with Japanese socio-cultural values, her fame apparently
goes global. Therefore, in the future, research investigating how and why several cultures or
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nations enjoy and embrace HM is important. Future research may also investigate similar
product to HM that thrives in different culture for building a universal co-creation model in
the context of virtual product. Another route might be to study co-creation community within
the context of creative industry in relation to their social profile and expertise.
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