Utilizing Original IP... Webtoon to Video Adaptation
Global Comics Market 50 Trillion... Digital Transformation
Expanding Influence by Acquiring Overseas Platforms
As Korean webtoons and web novels gain worldwide popularity, they are emerging as the next growth engines for platform companies such as Naver and Kakao. This is because original intellectual property (IP) can be leveraged to expand into various content sectors, offering high future growth potential. There are calls for active government support and measures to combat illegal content distribution.
Visitors at the art fair 'Urban Break 2023' held at COEX in Seoul are enjoying webtoon works. [Image source=Yonhap News]
Korean webtoons (K-webtoons) are gaining attention in the global market. The COVID-19 pandemic and digital transformation acted as catalysts. In 2020, the domestic webtoon industry grew by about 65% compared to the previous year, surpassing 1 trillion KRW. Webtoons and web novels have sometimes experienced a "reverse surge" as they are adapted into dramas or movies. Works released years ago have regained public affection. For example, "Jaebeoljip Maknae Adeul" (The Youngest Son of a Chaebol Family) is a web novel completed in 2018 on Moonpia, a Naver Webtoon subsidiary, but its sales increased 230-fold due to the popularity of its drama and webtoon adaptations. According to an Open Survey, nearly half of users who encountered secondary works also sought out the original source separately.
European content buyers are also showing great interest in Korean webtoons and web novels. At an export consultation held last month in Paris, France, by the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency, together with 15 companies in the webtoon and story sectors, contracts worth a total of 5.27 million USD (approximately 7 billion KRW) were signed within three days.
According to a survey by the Software Policy & Research Institute, the global digital comics market grew at an average annual rate of 20% from 2016 to 2020, reaching 4.051 billion USD (5.34 trillion KRW) in 2020. Notably, digital comics still account for only about 40% of the entire comics market. As the global distribution and consumption structure of comics changes, the digital transformation of the comics industry is expected to accelerate.
Korean platform companies, facing limitations in search and advertising markets, are turning their attention to the webtoon and web novel markets. Kakao Entertainment has invested over 2 trillion KRW since its early days to target the global market. As a result, it currently holds about 10,000 original IPs, an unrivaled scale domestically. As of the first quarter of this year, 4,300 works have expanded overseas, aiming to become the top webtoon revenue generator in North America. Although K-webtoons account for less than 1% of the total works on Tapas, a North American webtoon platform acquired by Kakao Entertainment in 2021, they drive 85% of its revenue.
In particular, Kakao Entertainment has expressed its commitment to maintaining a sustainable and healthy ecosystem through fair profit sharing with copyright holders (creators). As of 2021, 69% of revenue is distributed to content providers such as authors, while the company's share is about 23%. It has also established the "Novel Comics" system, which contributes to expanding creators' earnings by producing popular web novels, already verified by readers, into webtoons. Dramas like "Again My Life" and "Business Proposal" were adapted following the Novel Comics system from web novel to webtoon to video. Kakao Entertainment's super IP "Solo Leveling" achieved a record-breaking 14.3 billion global views by combining the original web novel and webtoon.
Naver acquired the North American web novel platform "Wattpad" in 2021 and, in May last year, established Studio Toon, a webtoon studio in Korea, through a joint venture with Japanese broadcaster TBS and webtoon production company Shine Partners. Studio Toon produces webtoons for Naver Webtoon and is expected to create synergy in video production by adapting them into dramas in Japan through TBS. In March last year, Naver also acquired the Japanese e-book company "eBookJapan," securing the number one position in the webtoon market by transaction volume. Naver Webtoon's transaction volume reached about 1.59 trillion KRW last year and is expected to grow 6% to 1.67 trillion KRW this year.
Industry experts emphasize the need to establish various support policies for overseas market expansion if webtoons and web novels are to become new Hallyu (Korean Wave) content. Additionally, strong sanctions against illegal distribution sites are necessary to protect IP. The damage caused by illegal webtoon distribution in 2020 was about 550 billion KRW, a 1.7-fold increase compared to 2019 (Korea Creative Content Agency). Park Ji-hye, a researcher at the Service Industry Innovation Division of the Korea Institute for Industrial Economics & Trade, stated, "To develop the webtoon industry and provide systematic support, a healthy ecosystem must be created along with a legal framework suited to the industry's characteristics."
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