[Valuable Intellectual Property] Webtoon Market Attracting Attention from Apple... Illegal Sites Are Rampant

Korean Companies Lead Global Webtoon Market
Easy IP Expansion... Diverse Content Production
Headache from Illegal Distribution and Translation Sites

The webtoon industry, which has established itself as a major pillar of K-content with annual sales exceeding 1.5 trillion won, is suffering from illegal distribution of copyrighted works. Even when the government blocks illegal webtoon sites, alternative sites emerge simply by changing domain addresses, making it difficult to respond effectively.

Webtoon Fair reference photo / Goyang = Photo by Hyunmin Kim kimhyun81@

Webtoon IP Expanding into Various Contents

Webtoons are considered content with excellent intellectual property (IP) scalability. Webtoon IPs are expanding into various industries such as dramas, movies, over-the-top (OTT) series, web novels, and games. The drama Reborn Rich, D.P. serialized on Netflix, and the movie Concrete Utopia set to be released next month are all based on webtoons.

Kim Botong, the author of the webtoon D.P. Dog Days, said at an event hosted by the Korea Creative Content Agency last March, "Webtoons are a great testing ground to test the market with low production costs," adding, "It is possible to produce up to the fourth episode of a webtoon for 3 million won." He explained, "Compared to movies and dramas, it is possible to plan with relatively low costs," and "If the IP is loved by the public and its marketability is verified, it becomes easier to cast actors and attract investment." He also noted, "Since webtoons are content based on visualization, video production is easier," and "From the author's perspective, it is advantageous for securing copyrights." Recently, major film production companies have been actively attempting to pre-produce video content as webtoons before making films.

Webtoons are also a key export item. The webtoon industry, which was worth 150 billion won ten years ago, achieved sales of 1.566 trillion won in 2021. Naver and Kakao hold a high market share in the global webtoon market. Last year, Naver Webtoon’s global sales reached 929.6 billion won, a 34% increase from the previous year. During the same period, Kakao Entertainment’s story division recorded sales of 921 billion won. Recently, big tech companies such as Apple and Google have declared their entry into the webtoon market, intensifying efforts to secure IP.

Illegal Distribution and Translation... "Stronger Punishments Needed"

However, webtoons remain vulnerable to illegal distribution of copyrighted works. Not only do illegal webtoon piracy and sharing sites cause copyright infringement, but these sites also generate revenue through illegal banner ads related to gambling and prostitution, which is a serious issue. Most operate servers overseas, and even after access is blocked, alternative sites are immediately created by simply changing domain addresses, making crackdowns difficult. The Korea Copyright Protection Agency recorded about 40,000 cases of illegal webtoon distribution in 2021, 37,000 cases in 2022, and 10,000 cases up to May this year. Last year, the proportion of illegal copies used among total webtoon content consumption was about 21.5%.

As domestic webtoons gain popularity overseas, many illegal foreign sites have emerged that translate and upload copyrighted works in local languages. A survey conducted by the Protection Agency over 10 weeks from June last year confirmed that a total of 42,000 domestic webtoon cases were illegally translated and distributed across 68 sites. In terms of the number of works, it reached 6,800, translated and distributed in nine languages including English, Vietnamese, Thai, and Indonesian. The illegal site servers were located in seven countries, with the United States (53.7%), Canada (33.3%), and Sweden (6.6%) being the top three.

There are calls to strengthen punishments for illegal webtoon distribution. In the United States, first-time offenders distributing illegal copies face up to five years in prison or fines up to $500,000, while repeat offenders face up to ten years in prison or fines up to $1 million. Japan also imposes fines of 300 million yen on operators of illegal distribution sites. There are voices advocating that South Korea should strengthen the current legal penalties and discuss punitive damages as well.