If You Watch Ads, One Webtoon Episode Is Free... Naver Strengthens Its Foundation Overseas

Diversifying Revenue Models with "Free After Viewing Ads"
Expanding User Payments through AI-Enhanced Recommendation Precision

Naver Webtoon is accelerating its monetization efforts. Not only does it recommend works tailored to user preferences, but it has also started diversifying its revenue model by adding advertising features. Analysts say the company is turning its attention to global monetization as webtoon content is gaining interest in overseas markets.

According to the IT industry on the 27th, Naver Webtoon has recently been testing the 'Watch Ads for Free' feature on its e-book platform Naver Series. This method provides one free episode of a paid work when a user watches one advertisement. From the platform operator's perspective, advertising revenue from advertisers is added on top of users' paid subscriptions.

A company official said, "We are conducting tests by selecting some works to gauge market response," adding, "We plan to increase the number of applicable works by listening to feedback from users and creators."

This attempt by Naver Webtoon was largely driven by an internal assessment that it is time to generate revenue in the global market. Especially since the timing for a U.S. listing, which had been pursued mid- to long-term, was fixed for next year, monetization has become an urgent matter. The global webtoon market is expected to reach $50 billion (approximately 64.835 trillion KRW) by 2030, indicating high growth potential. The fact that amateur works with ads attached have generated income comparable to professional artists has also been a factor actively promoting paid content.

Naver Webtoon started its service in the U.S. in 2017 and expanded its market to China, Thailand, Indonesia, and others. In the early stages of global expansion, it focused on scaling up by pouring marketing costs. Since securing users overseas, where webtoon content recognition was relatively low, was a priority, it endured losses despite revenue growth.

However, after securing a fan base in more than 100 countries, it judged that it was the right time to accelerate monetization. As of last year, the monthly active users (MAU) numbered 85 million, with overseas users accounting for 80%. It holds a 70.5% market share in the North American webtoon market, ranking first, and competes for first or second place in Japan, France, and other countries.

Along with advertising, the feature to recommend webtoons that users want has also been strengthened. Following the application of an 'Artificial Intelligence (AI) Curator' to overseas webtoon services last October, the company plans to complete its application domestically by the first half of next year. Additionally, it is concretizing the 'one source multi-use' approach by adapting original webtoon and web novel content into videos and releasing related merchandise.

Not only Naver Webtoon but also Kakao Entertainment plans to expand the use of 'Helix Push,' which delivers user-customized work notifications via AI, starting next year. Currently limited to Kakao Page, it will be introduced to Kakao Webtoon and global webtoon and web novel platforms Tapas and Radish next year. 'Helix Curation,' which curates works that users might like from the service screen, is also under development. To this end, an AI Lab was recently established under the Chief Technology Officer (CTO).