Yang Jeong-suk "Google In-App Payment Causes Additional 69 Billion Burden on Webtoon and Web Novel Users"

Naver and Kakao Price Increase Impact
4,928,000 More Users to Pay Additional Fees
Assemblywoman Yang Jeongsuk Proposes App Market Competition Promotion Bill

[Asia Economy Reporter Minyoung Cha] It has been claimed that Google’s mandatory in-app payment policy will cause domestic webtoon and web novel users to bear an additional annual cost of approximately 69 billion KRW. Including music streaming and online video service (OTT) users, the total additional burden on all content app users is expected to approach 300 billion KRW.

According to the office of Representative Yang Jeong-suk of the National Assembly’s Science, Technology, Information and Broadcasting Committee on the 19th, due to the 20% price increase in payment methods such as Naver Cookie and Kakao Cash caused by Google’s mandatory in-app payment policy, an estimated 4.928 million paid users of webtoons and web novels are expected to bear an additional annual cost of 68.99 billion KRW.

By category, the burden on 3.01 million paid webtoon users is estimated to increase by about 38.11 billion KRW annually, and the burden on 1.918 million web novel users is expected to rise by 30.88 billion KRW. Adding this to the estimated additional burden of 230 billion KRW for OTT and music streaming service users, the total additional cost for content app users nears 300 billion KRW.

Representative Yang estimated the number of paid webtoon and web novel users by multiplying the monthly active users (MAU) of Naver Webtoon, Kakao Webtoon, Naver Series, and Kakao Page by the proportion of users with paid experience. She then calculated the 'average monthly usage amount before the price increase' by applying the gender ratio (50.9% male to 49.1% female) to the average monthly paid usage amount for male and female webtoon and web novel users. After applying a 20% increase rate to derive the 'usage amount after the price increase,' she multiplied the difference by 12 months to calculate the annual additional burden. However, this calculation assumes that all paid users’ content payments are made via in-app payments.

Since April, Google has mandated the application of the in-app payment system for apps registered on the Google Play Store, applying a payment commission rate of 15% for annual sales up to 1 million USD (approximately 1.2 billion KRW) and 30% for sales exceeding 1 million USD.

Consumer price increases have followed consecutively. Since the 23rd of last month, Naver Webtoon raised the in-app payment price of Cookies, the payment method for webtoons and web novels on the Android app, from 100 KRW to 120 KRW per unit, a 20% increase. Kakao Entertainment also raised the price of Cash used for renting and owning content on Kakao Webtoon and Kakao Page from 1,000 KRW per 1,000 Cash to 1,200 KRW, a 20% increase, starting this month.

As a solution, Representative Yang has proposed an amendment to the Telecommunications Business Act to promote competition in the app market and expand user choice. According to the amendment bill submitted on the 17th, if a mobile content provider of a certain scale registers an app on one app market, the government may recommend registering the app on other app markets accessible through the same mobile communication device. The bill also includes provisions allowing the Minister of Science and ICT to provide necessary support such as subsidies to providers who wish to register their apps on other app markets.

Representative Yang emphasized, "If the amendment passes, providers who previously avoided registering on multiple app markets due to tangible and intangible costs and procedures will be able to easily register mobile content on various app markets." She added, "We also plan to propose an additional bill that prohibits operators who run both smartphone operating systems (OS) and app markets simultaneously, like Apple, from restricting the installation and use of other app markets."