China’s booming virtual idol industry faced an outcry from fans this month after the abrupt retirement of a member in a popular virtual group of singers and dancers backed by ByteDance , a testament to the immense popularity of these digital icons and the risks that accompany these characters’ ties to real people. A-Soul, a five-member girl group developed by ByteDance’s gaming unit Nuverse and Chinese artist agency YH Entertainment Group, triggered the fan revolt when it dismissed the virtual idol Carol without prior warning, citing “health and education reasons” for the unidentified real person behind the character. “My world just collapsed,” said Henry Hu, a university student in Guangxi province and a fan of Carol. “I never thought it would happen.” China’s Big Tech is splurging on virtual idols without much personality Virtual performers powered by a combination of artificial intelligence and real performers have become increasingly popular among China’s young consumers, who tune in online and sometimes spend thousands of yuan on their favourite avatars. Chinese gaming studios, video websites and online shops have all rushed to produce their own idols. A-Soul has been among the most popular of these virtual pop groups. The band has won millions of fans over the past two years on ByteDance’s Douyin, the Chinese version of TikTok , and Bilibili , a video streaming site popular for China’s Generation Z. Carol’s dismissal with the departure of her unknown actress was such a surprise to viewers that it quickly turned into a backlash, leading to accusations of inhumane working conditions for the former employee whose voice and movements brought the character to life. The revolt escalated to the point that some fans even reported the alleged abuses to Chinese labour authorities. The local labour authorities in Hangzhou conducted an investigation and said they found no evidence of forced employment or dismissal. A-Soul’s production team also denied accusations that the artists behind the group’s characters were underpaid or forced to work long hours. But the team admitted that Carol performed until midnight in two recent sessions. “There were no incidents of ‘bullying’ or ‘suppression’ based on our investigation,” the A-Soul project team said in a statement. Many fans remained unconvinced. Hashtags related to A-Soul and Carol’s departure have been trending on microblogging platform Weibo for the past week. Netizens’ ire has also started to shift towards ByteDance, with demands for clarification of the situation and promises from the company to improve working conditions for virtual idols’ human performers. ByteDance declined to comment. Analysts say the incident reveals problems for China’s expanding virtual idol industry, which was worth 107.5 billion yuan (US$16 billion) in 2021 and is expected to triple by 2023, according to a recent report from market research firm iiMedia. The unusual business model typically involves creating a virtual idol through a combination of software and hardware that allows real people to interface with the avatars. A team of artists and designers are also involved in the characters’ live-streamed performances. It is often much cheaper to cultivate a virtual idol than to turn a real person into a star, with big potential for revenue generation from fans, asset management firm Cinda Securities said in a note last week. In the case of A-Soul, the human performers behind the idols are only entitled to a fixed monthly income, a bonus, and 10 per cent of total turnover of a live broadcast, according to the group’s disclosed compensation. There is no mention of any shared ownership. Han, a 26-year-old A-Soul fan in northern Heilongjiang province, said she has spent about 300 yuan in tips during the group’s live-streaming sessions. “I don’t consider them different from the real human idols, because they have both brought me happiness in certain ways,” she said. Hu, the fan in Guangxi, said he has spent more than 10,000 yuan to support Carol through tips during her performances, buying merchandise and making fan videos. This avid support among fans helped A-Soul’s first single “Quiet” attract more than 200 million views on Douyin in December, and the group’s first music video had more than 5.3 million views on Bilibili. YH Entertainment, which in March filed an application to go public in Hong Kong, said in its prospectus that A-Soul has helped grow its pan-entertainment revenues – which includes variety programming and virtual artists – by 80 per cent to 37.9 million yuan in 2021, up from 21.1 million yuan the previous year. China’s first virtual idol talent show draws mixed reactions “The controversy of A-Soul exposed the problems in operations, which, after all, still rely on real people to operate,” said Zhang Yi, chief executive of iiMedia Research. “Incidents like this will continue to happen as industry players explore how they can run the business as competition heats up, and they will make mistakes in the process.” Still, the industry had continued to expand. Social media giant Tencent Holdings , the operator of WeChat , introduced three virtual characters in a dance performance for a gala held by state-run China Central Television (CCTV) for Youth Day on May 4. Baidu and Alibaba Group Holding , owner of the South China Morning Post , have also jumped on the bandwagon . Chinese regulators appear to be virtual idol fans, as well. In its 14th five-year plan, Beijing encouraged the National Radio and Television Administration, the country’s media watchdog, to advance the use of virtual humans. Inclusion in the country’s top economic agenda came a month after Beijing started a new internet clean-up campaign last summer, following celebrity scandals that included a rape charge against Chinese-Canadian singer Kris Wu Yifan .