VOL.69/2024.04

 

Export Status of Korean Webnovels and Webtoons

 

2023.03.13

 

Status of Korean webnovel and webtoon market

 

Korea’s webnovel and webtoon market has been growing rapidly, representing the “K-content” category. The business has been expanding into other countries as well, such as other Asian countries and the US. Derivative works based on webnovels and webtoons are generating income through various channels. As can be seen in the success of the recently-aired drama “Reborn Rich,” IPs (intellectual property) based on publishing content such as webnovels and webtoons are expanding into other industries such as drama, film, animation, and games, securing the original content with relatively less investment.
According to the research conducted by the Publication Industry Promotion Agency of Korea (KPIPA) and the Korea Creative Content Agency (KOCCA), the size of the webnovel market grew from 741.5 billion won in 2020 to 1.85 trillion won in 2022, while that of the webtoon market grew from 1.538 trillion won to 1.566 trillion won during the same period. With the rapid advancement of the smart device and mobile-network-based industries, the webnovel and webtoon markets, the representatives of snack culture, have come under the spotlight in the content industry.

 

 

Naver Webtoon and Kakaopage, each a webnovel and webtoon platform operated by two major big-tech firms, Naver and Kakao, in Korea, have significantly contributed to the firms’ sales and profits with soaring growth rates. As a result, they have settled as one of the firms’ core businesses for the future. For the past few years, Naver and Kakao have been focusing on advancing into international markets with webnovel, and webtoon content put upfront. It was because dramas and films based on webnovels and webtoons achieved success with much popularity on OTT (Over-the-Top) platforms, proving that their overseas expansion strategy was right. This recent phenomenon is different from the times when each of the works was translated with copyrights sold overseas. As the Korean platform is gaining greater influence in the global market, firms are concentrating on expanding their share in the global market through their own platforms. In fact, the IPs of popular works serialized on their platforms are actually owned by themselves.
With these big platform firms boosting investment in securing IPs, video productions based on original content have gotten wings as well. Naver and Kakao run affiliates that plan, produce, and distribute video content. Creators are attracted to these large platforms as intriguing stories are produced into webnovels, webtoons, and videos. If we look at the overseas expansion process of Naver and Kakao, they secure a pool of local creators, invest in platforms that steadily manage works, or push forward M&A. These efforts enable them to do vertical integration (integrated management of several levels in production and distribution to increase market dominance) of their content business and rapidly increase its size through massive capital investment. Now, let’s take a look at the overseas expansion of Korea’s large firms that are leading the global webnovel and webtoon market.

 

Major Firms’ Overseas Expansion Status

 

Naver announced its goal of listing Naver Webtoon on the US NASDAQ. Naver is planning to reinforce its video business utilizing webtoon IPs while increasing the proportion of paid users in the world for webnovels and webtoons. In this effort, Naver launched “Yonder,” a premium webnovel series service in North America in October 2022, to secure a greater user base. Yonder is currently servicing works of various genres, including The Remarried Empress (Happy Books 2 You), one of the representative works on Naver Webtoon, and the new work by Ruby Dixon, a world-renown fantasy writer. Meanwhile, it is separately operated from “Wattpad,” the biggest webnovel platform acquired by Naver. It is said that Naver is planning to discover new works through Wattpad, where regular webnovel creators upload their works, and send popular or quality works to Yonder.

 

 

Naver has been bolstering its influence in Japan as well, which is the biggest comics market in the world. It is planning to complete the system interoperability of “ebookjapan” and “LINE Manga,” which it acquired in 2022, within the first half of the year. Naver is also planning to produce original webtoon content and expand the video business of its webtoons through channels, including ground wave. Naver Webtoon is also advancing its video business via its subsidiary “StudioN.” Wattpad WEBTOON Studios in the US is an integrated body of Wattpad Studios and Webtoon Studios after acquiring Wattpad. Centering on North America, the company is in charge of visualizing the IPs owned by Naver Webtoon and Wattpad in regions including Latin America, Europe, and Southeast Asia. And, by establishing “StudioDragon Japan” in Japan and “Studio TooN” in Korea, a video production network that connects Korea, Japan, and the US, was established.
Kakao’s overseas expansion, which has a fierce rivalry with Naver, is also noteworthy. First, to focus on the North American market, Kakao launched “Tapas Entertainment” in September 2022, which is an amalgamate of “Radish” and “Wuxiaworld” based on “Tapas,” a webtoon platform. Also, Kakao is planning to concentrate on novel-based comics, where popular webnovels are produced into webtoons, to discover new IPs in the North American market. Moreover, collaboration with the local creator communities of Tapas and Radish, which together own a 100k user base, is in full swing.

 

 

Kakao Entertainment added the “samdamu” service to Tapas in November 2022. The abbreviation “samdamu” refers to “free episode every three hours” in Korean. The service was first launched in Korean webnovel and webtoon service in September 2022, and it was also applied to the North American platform afterward. A similar type, “Gidamu (wait and read an episode for free),” had been launched earlier after it acquired Tapas and Radish, the webnovel platform in North America. The “gidamu” feature, which opens a new episode every certain period of time, is the representative business model that drove the external growth of Kakao Entertainment’s content business. So, by upgrading “gidamu” to “samdamu,” Kakao is expected to maintain the business model proved in the Korean market in its localization process, expanding the application to its North American platform.
Meanwhile, Kakao is promoting “Piccoma,” a webcontent platform, in the Japanese and European markets. In fact, most of the overseas sales of Kakao’s story platform are led by KakaoPiccoma. Piccoma, serviced by KakaoPiccoma, has steadily increased sales after it ranked 1st in the Japanese market in 2020. Also, Piccoma is leading the corporation’s establishment in Europe and advancement into the European market. Regarding Southeast Asia, after acquiring “NeoBazar” in December 2018, the top webtoon company in Indonesia, it rebranded and relaunched “Webcomics,” NeoBazar’s local webtoon service, as “Kakaopage Indonesia” in January 2020. As such, Kakao is pushing forward with a differentiated strategy through platforms suitable for each region in the world.
Kakao has been giving more strength to video production by selling visualization copyrights of IPs that they discovered in platforms through Kakao Entertainment, and acquiring capable video production studios. It is continuously working on projects such as one that cross-connects the world view of the webtoon and video such as the webtoon Steel Rain (Neo Cartoon) and the video with the same title, a project that simultaneously develops the webtoon and scenario such as Space Sweepers, and a project that turn Noble Comics into videos such as What’s Wrong with Secretary Kim (Gaha) and The Red Sleeve (Cheongeolam).
“Ridi,” a late runner in the market following Naver and Kakao, is also boosting speed by adding more serviced languages. For example, Ridi officially services Spanish on “Manta,” its monthly paid webtoon subscription service. Launched in the North American market in November 2020, Manta is currently serviced in about 175 countries. Releasing popular works such as Under the Oak Tree and Half in Spanish, Ridi is set to showcase various works that reflect local culture and sensitivity in a series. Manta recorded the cumulated number of downloads of 3 million in only a year, and is planning to expand the business into Asia and Europe.

 

 

Efforts and Expectations for Stronger Overseas Expansion

 

For Korean webnovels and webtoons to advance into the global market at greater speed, a translation infrastructure must be in place that can heighten the value of Korean works. So, Naver Webtoon and the Literature Translation Institute of Korea (LTI) have been cooperating to foster outstanding translators. The students at the academy run by LTI are given the chance to participate in translating webnovels and webtoons that are actually serviced on the platform. To produce content in various languages such as English, Chinese, Japanese, Indonesian, Thai, and French, efforts to establish an infrastructure that trains professional translators with creativity and capacity to understand works are expected to continue.
The story power of Korean webnovels and webtoons is gaining high popularity across countries and genres. Interesting story content can be used in a mobile environment with an easier method and cheaper cost. The influence of webnovels and webtoon IPs is expected to grow further in “trans-media,” where the original content can expand into various formats. Also, the number of platform users and sales is enough to verify the success of IP-based content. This is also the reason why Korean webnovel and webtoon platforms and works are popular in the world. So, I look forward to greater interest and cooperation from participants in the international publication and content markets looking for works that fit the era of snack culture.

 

[References]
- [Digital Convergence: The Power of K-Content]〈4〉 Webtoon and webnovel: the repository of K-content IP, ETNews, July 5, 2022
- Naver and Kakao Join the North American Webnovel Market, Chosun Ilbo, January 13, 2023
- Naver and Kakao Webtoon Seek Overseas Expansion: The Global Growth of K-Content, ZDNET Korea, January 20, 2023

 

 

---

Written by Ryu Young-Ho (Department Manager of the DBS Platform Project at Kyobo Book Centre)