or fandom, economy based on enthusiasm for specific people and characters through spending money on related goods and content is rapidly expanding as the very concept of what constitutes fame and stardom in the country undergoes a digital transformation.

Traditionally, the famous were entertainers such as actors, singers and comedians who drew paying customers to their movies, concerts and performances and advertising for television appearances. And while fandom still includes them, it has also has given rise to new kinds of personalities who have gained digital fame in more niche and independent ways.

But that change has come at a cost for traditional talent agencies, which are facing record-high bankruptcies as main revenue sources shift from television appearances and advertising to events, livestreaming and merchandise.

An example of the phenomenon can be seen in the emergence of Alterna Channel, a content creation group active on YouTube. Early this month, its members were filming a video for an upcoming event it plans to hold in Osaka. The main purpose, however, was not to generate advertising revenue from the video-sharing site but to fill seats at the November event.

At a cafe-style studio in Tokyo, members, none of them household names, asked questions such as, "Who is the most famous person from Osaka?" and "What food best represents Osaka?" in an attempt to highlight the event's location, a major commercial city in western Japan.

Its members began posting videos as a hobby in 2013. They don't film with elaborate sets or cameras like on a TV show and usually post videos related to Japan's diverse array of amusement arcades, food and snacks. Still, they have amassed more than 2.7 million followers on YouTube.

But it is live events, like the one planned in Osaka, that are the basis of its business. Tickets for the event, which features talk sessions and game-based activities, are priced at 5,000 yen and around 880 fans in total are expected to attend. They sell merchandise as well, ranging from trading cards priced at 440 yen to T-shirts costing 5,500 yen.

Alterna Channel members film a program to be broadcast on YouTube, in Tokyo on Oct. 6.

According to Pia Research Institute, Japan's live entertainment market reached a record 856.4 billion yen in 2025, up 12.6% from a year earlier, driven by larger theater productions and higher ticket prices.

Furthermore, fandom's market scale reached 4.1 trillion yen ($26 billion) last year, up 17% from 2024, according to research by marketing service firm CDG and consulting firm Oshicoco. The figure is on par with the annual revenue of major Japanese companies such as Kansai Electric Power and construction equipment maker Komatsu. Traditional talent agencies have found themselves in a tight spot.

According to Teikoku Databank, 16 of them went bankrupt between January and August this year, already exceeding the previous annual record of 15 set in 2016.

"Name recognition [of talent] alone is no longer enough," said Daisuke Iijima, a researcher at Teikoku Databank. Recent failures are not limited to small operators but increasingly include firms that once held a visible presence within Japan's entertainment industry, he added.

For decades, agencies invested heavily in discovering and developing talent, recouping those costs through long-term management relationships and television appearances. But TV advertising growth has slowed with the emergence of digital platforms.

Regulatory changes have added further pressure as well. Japan's Fair Trade Commission has stepped up scrutiny of restrictions on talent changing agencies or becoming independent, increasing mobility and making it harder for agencies to lock in returns on years of investment in training and promotion.

Amid all of this, Japan's entertainment business is increasingly evolving from an industry built around managing talent into one focused on developing intellectual property and nurturing fan communities.

Tadayuki Umekage, president of UUUM, which manages YouTubers including Alterna Channel, describes the shift as the arrival of an era in which individuals can become media companies in their own right.

When UUUM, which provides support for social-media strategy, editing and brand partnerships, was founded in 2013, revenue came mainly from online advertising and brand sponsorships.

"Our revenue streams have become far more diversified," Umekage said. Its revenue reached 27.5 billion yen in the fiscal year ended September 2024.

Its business has expanded into merchandise sales, live events, membership services and brand-building ventures, can be seen with Alterna Channel.

From left, Skiyaki CEO Tomohiro Kokubo and UUUM President and CEO Tadayuki Umekage (Source photos by Yuki Kohara and Yuji Murakami) The shift extends beyond creators to their relationships with fans. Tomohiro Kokubo, president of fan club platform operator Skiyaki, said fan clubs were once little more than tools for securing priority access to concert tickets.

Smartphones and social media have transformed them into communities offering exclusive livestreams, chat functions and digital experiences. The company operates fan-club systems, membership platforms and livestreaming services.

"Monthly membership fees of around 300 yen used to be standard. Today, 600 yen is widely accepted," Kokubo said. "Some fans spend 5,000 to 6,000 yen a month on premium memberships, livestreams and other exclusive services." These emerging companies are eyeing further growth beyond Japan as the country faces a declining birthrate and a shrinking population. Companies including UUUM have begun looking increasingly toward Southeast Asia.

South Korea's entertainment industry, meanwhile, is seen as a good example. According to Kokubo of Skiyaki, the Korean fandom industry actively promote artists overseas through translation and social media activity. K-pop companies have built integrated businesses spanning live events, e-commerce, memberships and fan communities. UUUM's Umekage also acknowledged that South Korean counterparts have tended to think globally from the outset.

Efforts to address that challenge are beginning to take shape. Launched in 2025, Music Awards Japan aims to promote Japanese music internationally, just like Grammys in Asia has for the broader region. Music critic Tomonori Shiba said that the challenge is not simply exporting content, but turning temporary popularity into lasting fan support.

Interest in Japanese music, anime and games remains strong. Umekage said, "Japan has no shortage of content with global appeal. The challenge is turning that popularity into sustainable fandom and business overseas." "For an industry searching for its next growth model, that shift in mindset may prove as important as the content itself," he added.