Naver Webtoon Targets Global IP Franchise... "IPO Is a New Beginning"

Full-Scale Nasdaq Listing in the US
Aiming Beyond K-Webtoon Exports to the Global Entertainment Industry
Strengthening IP Business... Competing with Netflix and YouTube

Naver Webtoon has begun the process of listing on the U.S. Nasdaq stock exchange for the first time in 20 years. What started as content enjoyed by a niche group of enthusiasts has now stepped into the heart of the global entertainment industry. The goal presented through the listing is to become a ‘global intellectual property (IP) franchise.’ The ambition is to compete with Netflix, YouTube, and others through the IP business.

From Subculture to Major Industry

Naver Webtoon began as a small service of Naver in June 2004. The system called ‘Challenge Comics’ was what elevated webtoons, once a subculture domain, into a major industry. Introduced in 2006, Challenge Comics is a program that allows amateur creators to easily showcase their works. Through a system that leads from Challenge Comics to official serialization, numerous star creators have emerged. Challenge Comics has been transplanted under the name ‘Canvas’ in the U.S., Europe, and Southeast Asia, and as ‘Indies’ in Japan. To date, 24 million creators worldwide have been discovered, and 55 million pieces of content secured. In overseas markets where webtoons were once barren, a stage was created where anyone can become a creator, attracting IPs from around the world.

Various works have become the foundation of a global fandom. It began in 2014 by translating popular Korean webtoons and providing them overseas. By serializing short episodes in a scroll format suitable for mobile, it targeted the MZ generation (Millennials + Generation Z). It served not only as a content gateway but also as a community. Readers became loyal users by participating in the development of works through feedback left in comments or author profile windows. Through this method, it secured 170 million users in 150 countries worldwide. It has established itself as the number one webtoon platform in Korea, the U.S., Japan, and other countries.

IP and fandom have created a new entertainment industry. Webtoon IPs have been expanded into various secondary creations such as dramas, movies, and animations. As IPs are utilized diversely, crossing language and media barriers, greater profits have been generated. A representative example is the webtoon ‘True Beauty’ by the artist Yaongyi, which is serviced in 10 languages and has accumulated 6.4 billion page views. It was produced as a drama broadcast worldwide and is set to be animated. Thanks to the power of IP, specialized creators at Naver Webtoon earn an average of $48,000 annually, and the top 100 creators receive $1 million each.

Opening the Second Phase of Global Growth

Naver Webtoon plans to open the second phase of global growth through its Nasdaq listing. While it has introduced webtoon content overseas and created market ecosystems so far, it now aims to become a global IP franchise like Disney.

It plans to focus on the IP business, which currently accounts for less than 10% of revenue. Naver Webtoon’s revenue is broadly divided into ▲paid content ▲advertising ▲IP business. Currently, 80.2% of total revenue comes from paid content, with advertising and IP business accounting for 11.3% and 8.4%, respectively. Funds secured after the listing are expected to be invested in the IP business.

According to the securities registration statement submitted to the U.S. Securities and Exchange Commission (SEC) on the 31st (local time), market opportunities are presented as ▲paid content $130 billion ▲advertising $680 billion ▲IP business $900 billion. This indicates a focus on the IP business due to its large market opportunity. Competitors listed in the registration statement include media platforms such as YouTube, TikTok, and Netflix. Naver Webtoon has also established a foundation by acquiring the North American web novel platform ‘Wattpad’ in 2021 and founding ‘Wattpad Webtoon Studios,’ which produces movies. It has built a value chain connecting web novels, webtoons, and movies. Although the issuance scale and offering price were not disclosed, the corporate value of Webtoon Entertainment is expected to reach up to 5.54 trillion KRW.

It will solidify its top position in the existing webtoon business. It plans to expand paid users and local advertisers to strengthen the creator base that earns hundreds of millions of won annually. Through this, it aims to widen the gap with big tech companies such as Apple and Amazon, which have recently entered the webtoon business.

Kim Jun-gu, CEO of Naver Webtoon, stated in the letter of the securities registration statement, "This IPO is the culmination of 20 years of effort and a new beginning. Our goal is to discover and develop IPs that will become the biggest hits over the next 10 years."