[Challenges Left by K-Pop Demon Hunters] ④ The Core of the 'Multi-IP' Strategy... Seize the Webtoon

Korea is Too Small... Now Aiming for the Global Stage
Challenging New Content Types Like Short-form Videos
Illegal Webtoons Block Creative Momentum... Hindering Global Expansion

The original work behind "Zombie Daughter," the first film released in theaters this year to surpass 5 million viewers, is a webtoon. The film's production cost was reportedly 11 billion won, with its break-even point set at 2.2 million admissions. It reached this break-even point within a week of its release and has now more than doubled that figure, marking a box office success.

The company that adapted the work, which was serialized by author Lee Yoonchang over three years starting in 2018, into a film is Studio N, a video production subsidiary of Naver Webtoon. The fact that it went straight to theaters, rather than to an online video service (OTT), and succeeded has become a hot topic in the film industry. This is unusual, considering that both production and distribution are typically dominated by major platforms.

Screening information for Zombie Daughter displayed at a movie theater in downtown Seoul. Yonhap News

"Zombie Daughter" is also receiving positive responses overseas. After its North American release on the 8th of last month, it surpassed titles such as "Omniscient Reader's Viewpoint" and "The Black Nuns" to become the most-watched Korean live-action film released this year in North America. It has also been officially invited to the Panorama section of the competition at the 58th Sitges International Fantastic Film Festival in Spain next month. The original webtoon is currently available in Thai, Japanese, English, Traditional Chinese, Spanish, French, and Indonesian through global webtoon services and Line Manga.

An industry insider commented, "Until now, successful films and dramas based on webtoons have been released through global OTT platforms like Netflix or Disney Plus. 'Zombie Daughter' is a meaningful case because it has demonstrated that success is possible without relying on OTT platforms."

Experts emphasize that to further scale up K-content such as "K-Pop Demon Hunters," attention must be paid to webtoons. Lee Sungmin, a professor at Korea National Open University’s Department of Media and Video Studies, said, "Since webtoons originated in Korea, the country should take the lead in setting standards and providing active support."

The focus on webtoons is due to their central role in the "multi-intellectual property (IP)" strategy, which expands content into various genres such as films, dramas, and games. The webtoon genre itself originated in Korea. Just as Netflix invests in the production of "K-Pop Demon Hunters" and secures IP, domestic production companies also need to make efforts to secure IP based on webtoons.

Korea is Too Small... Now Aiming for the Global Stage

Domestic webtoon services are continuing their efforts to expand onto the global stage. Japan, considered the world's largest comic market, is a prime example. According to the Korea Copyright Commission, as of 2023, Japan's comic market generated about 6.1769 trillion won in revenue, accounting for one-third of the global comic market. The digital comic market, which allows readers to view published comics on smartphones, is even larger. The industry estimates that Japan accounts for around 70% of the global digital comic market. The webtoon market there is dominated by Line Manga (Naver) and Piccoma (Kakao).

Korean webtoon platforms began targeting the Japanese market in the early 2010s. Line Manga launched in Japan in 2013, followed by Piccoma in 2016. Korean companies pioneered the webtoon genre in Japan's digital comic-centered market. According to Sensor Tower, a Japanese mobile application market analytics firm, Line Manga recorded about $143 million (approximately 199.4 billion won) in in-app purchase revenue in the second quarter of this year. This ranked first in revenue among all apps in Japan.

Emerging markets are also opening up. Webtoon Entertainment, the U.S. headquarters of Naver Webtoon, signed a partnership with The Walt Disney Company on the 13th of last month to adapt major IPs such as Spider-Man and Star Wars into webtoons. Webtoon Entertainment's operating loss for the second quarter of this year was $8.76 million (about 1.23 billion won, based on an average quarterly exchange rate of 1,403.82 won), a significant reduction from $79.09 million in the same period last year, signaling potential. Content sales increased by 5.4% year-on-year, driven by the growth of Japan's Line Manga, and advertising and IP business sales also performed well in both Korea and Japan.

The growing number of webtoon readers in the global market is also a positive sign. As of the second quarter of this year, the monthly active users (MAU) of Naver Webtoon (Korea), Line Manga (Japan), and Global Webtoon (U.S. and others), all operated by Webtoon Entertainment, reached 156.1 million. In particular, the MAU for webtoon apps in global regions such as the U.S. grew by 19% compared to the same period last year.

Challenging New Content Types Like Short-form Videos

There are suggestions that to broaden the scope of multi-IP utilization using webtoons, attention should also be paid to new content types such as short-form videos, which are especially popular among younger generations. Kwak Gyutae, a professor at Soonchunhyang University’s Department of Global Cultural Industry, suggested, "It is necessary to expand the scope of IP utilization. Content such as short-form videos and animation, which are loved by the 'Zalpha Generation' (Gen Z + Alpha Generation), should also be actively pursued."

Illegal Webtoons Block Creative Momentum... Hindering Global Expansion

Kim Kyunam, Chief Risk Officer of Naver Webtoon, is being interviewed on the 25th at Naver Green Factory in Seongnam, Gyeonggi Province. Photo by Kang Jinhyung

The biggest problem in expanding webtoon-based IP is illegal reproduction, as it prevents creators from receiving fair compensation. Kim Kyunam, Chief Risk Officer (CRO, Vice President) of Naver Webtoon, stated, "Since the damage from illegal reproduction ultimately impacts creators, it will sap the creative momentum for webtoons." He called for thorough investigations by relevant authorities and a shift in user awareness.

According to the "2024 Webtoon Industry Survey" report published by the Korea Creative Content Agency earlier this year, the estimated damage to the webtoon industry from illegal reproduction in 2023 was about 446.5 billion won. As of last month, one of the most prominent illegal webtoon sites ranked 17th in visitor numbers among all websites in Korea. Sites distributing illegally reproduced webtoons are also hindering the global expansion of webtoons.

As webtoons gain popularity in the global market, overseas criminal organizations have begun to take notice. Illegal webtoon sites targeting emerging markets such as North America and Southeast Asia, where webtoons are just starting to take off, are becoming more prevalent. These sites even translate works themselves, causing direct harm. Kim CRO emphasized, "Since overseas business is still in its early stages, the current model is to attract users with free services and then convert them to paid services. However, if illegal sites offer free access, it creates the perception that webtoons should be free, which hinders business expansion."