WEBTOON and the global creative ecosystem
At a conference in South Korea on August 24, 2023, Founder and CEO Junkoo Kim of WEBTOON ENTERTAINMENT shared his outlook on the growth of the global WEBTOON business and the creative ecosystem. (Watch the video) The crux of his presentation was "building and reinforcing the creative ecosystem," which is the driving force behind the Creator's Economy. Here's a little more about how WEBTOON ENTERTAINMENT has been creating and developing its creative ecosystem.
Mr. Kim presenting at the conference
Phase 1: Building a creative ecosystem
(Investment period)
Long before WEBTOON ENTERTAINMENT was founded, in 2005, we launched a web comics service as a small division of a Korean big tech company called NAVER, and the first thing we did was to discover creators. In particular, we focused on our role as a 'platform' to create a structure where new creators could be generated continuously. First, we created a UGC platform such as CANVAS, which allows anyone to showcase their work to readers. Mega-hits such as "The Sound of Your Heart," "Lookism," "Tower of God," "Noblesse," and "True Beauty" were all discovered through the CANVAS system. We paid episode fees to creators who launched "'official serialization' on WEBTOON," while allowing users to enjoy these titles for free.
To position ourselves as a place where new titles are serialized every day for our users, we introduced the industry's first "daily WEBTOON" system. This allowed users to know in advance what day of the week their favorite titles would be uploaded, and we were able to grow the user base as more and more users visited our service regularly.
WEBTOON ENTERTAINMENT started investing with the idea that a creative ecosystem system should go one step further than just a platform operator discovering creators; it should provide a complete system for aspiring creators who have difficulty finding help or information to become professional creators, as well as a self-sustaining and organic community where creators and fans can meet face-to-face.
(Growth period)
As the years of the investment phase accumulated, hit titles were born, with readers eagerly awaiting new episode updates, and new titles steadily emerged that threatened to take their place. As the number of interesting titles increased, so did the number of readers. More readers meant that WEBTOON became the platform where creators wanted to publish their titles the most. The virtuous cycle of creators and users getting connect and growing together within the WEBTOON platform began. Only then did the so-called "Hot and New" system, the core of the content business, begin to function properly. The solid content virtuous cycle that the platform has built is the foundation of not only the company, but also the entire industry and services, which is something that WEBTOON ENTERTAINMENT is particularly proud of.
(Maturity period)
As new titles and hit titles continue to be released on the WEBTOON platform, we have gradually begun to apply revenue models to the service that we have been considering for some time. WEBTOON's revenue model has evolved into a structure in which various forms of revenue are generated automatically, even when creators are focused solely on content creation.
Collectively, these revenue activities are called the PPS (Partners Profit Share) program. We were the first in the industry to introduce Fast Pass, which allowed users to pay for earlier access to the next week's episode, while maintaining the viewing pattern of titles that were previously available for free, and naturally continued the paid service in the form of Daily Pass when the series was completed. We also shared the revenue from advertisements within the title with the creators, and established a professional support system to help a single title expand into various types of IP businesses such as video, publishing, games, and merchandise. For example, in the case of Yumi's Cells, which was particularly popular in Korea, there were 116 types of commercialization results, including drama, publishing, and affiliated MDs including various merchandise. Thanks to these various monetization projects applied to each title, the size of the PPS program exceeded KRW 2 trillion in 2022. Ten years ago, there was only one production that generated KRW 100 million in revenue per year, but now there are over 900 titles that generate over KRW 100 million in revenue a year. The growth has been so dramatic that we now have five titles generating over 10 billion won in revenue.
Diverse revenue models take hold: WEBTOON PPS program accelerates its performance
Crowds at WEBTOON's booth at the Amazing Festival, a cultural content festival in Paris, France, in 2023.
Phase 2: Going global and achieving economies of scale
WEBTOON ENTERTAINMENT embarked on a global challenge, with confidence that its proven creative ecosystem model would continue its success overseas The company launched its global services in Japanese in 2013 and English and Chinese in 2014, followed by Thai, Indonesian, Spanish, French, and German.
However, the name of the parent company, Naver, one of Korea's most famous tech companies, was unfamiliar to foreign audiences, and the web-comic content format of vertical scrolling was unfamiliar to foreign creators and readers. The WEBTOON service grew through a long process of discovering local creators and gaining users. WEBTOON ENTERTAINMENT wanted to promote the service and discover creators by holding a contest with a large prize money, but since it was an unfamiliar service in Korea, the number of works submitted to the contest was very small, and there were moments when the authenticity was doubted by the winner's family. However, we did not give up despite the unfavorable situation, and did our best to discover local content, and diligently translated Korean titles of various genres. We also worked hard on online and offline marketing. When we began to receive responses and comments from service users, we quickly opened 'CANVAS' on our global service.
In the end, there were no shortcuts to getting the word out, building a creative ecosystem, and gaining trust, and it took time to invest and wait. Now, as the history of this global creative ecosystem approaches 10 years, global titles that are serialized in each country are crossover to meet new readers in other countries on WEBTOON's global platform.
Achievements of 'True Beauty' serialized on the WEBTOON global platform
This is also a time when the number of webcomic adaptations in TV and movies has increased dramatically due to the continued success of various genre works. With proven stories and characters and a solid fan base, it has become a common phenomenon to see WEBTOON-originated series take the top spot on global OTT services, especially Netflix. WEBTOON ENTERTAINMENT foresaw the market trend of recognizing the value of IP and established LICO in 2017 and a production and planning company called Studio N in 2018. Since then, the company has been actively engaged in global mergers and acquisitions, collaborating closely with various potential domestic and foreign companies in the story area. As a result, solid global content companies with large users and creators, such as Wattpad in North America, Ebook Initiative Japan, and Munpia in Korea, have joined the WEBTOON ENTERTAINMENT group of companies, preparing for another round of expansion and growth.
Now, as WEBTOON grows, so does the web-comic market. The industry itself is bigger than ever before. WEBTOON ENTERTAINMENT is growing its services in line with the growth and expansion of this ecosystem, developing and applying new revenue models, and expanding economies of scale. The outlook for the future is also positive, as WEBTOON ENTERTAINMENT has been focusing its core strategy on the shared sustainability of its creators and platform long before ESG became a global topic of conversation.
As we move into Phase 3
WEBTOON ENTERTAINMENT's next phase (phase 3) is to become a global top-tier entertainment company that provides various entertainment services based on 'stories' to users around the world. Phase 3, a leap into a new and powerful entertainment company, will in turn lead to phases 1 and 2, expanding the periphery of the creative ecosystem and creating a virtuous cycle that works with a strong revenue model. Ultimately, the 'creator economy platform' that WEBTOON ENTERTAINMENT has created in the world is aimed at rewarding creators and making users happy.
At the aforementioned conference, Mr. Kim began and ended his presentation by introducing the vision and mission of WEBTOON ENTERTAINMENT, which is "to inspire the world with story-based entertainment services." The company's mission is to provide more convenient opportunities for anyone to create their own stories and share them with the world, and to continue to increase the value of original stories so that they can be produced in various forms and meet new fans. Most importantly, the essence of this mission will not change in the future.
This is the story that WEBTOON ENTERTAINMENT wants to tell, the company that is uniquely sincere about 'stories' and supports all the creators in the world who have the same dream. As always, the story continues. With expectations, aspirations, and a determination not to rest on our accomplishments, we are moving forward into the future of WEBTOON.