To webtoon or not to webtoon? (2024)

"Nobody makes money on webtoons" an entertainment executive expressed to me not long ago. My immediate reaction was to say "Well, that's not 100% accurate and it depends". But what does it depend on? Let's dive in…

WEBTOON PLATFORMS, AT LEAST THE LARGE ONES, ARE LIKELY MAKING MONEY. All market participants - large and small - are investing in the future, based on impressive growth forecasts.

While the webtoons "freemium" business model allows readers to access and enjoy most content for free, a number of monetization models exist, allowing webtoon platforms, creators and IP owners to generate revenue. Pay to access content early or to binge-read, ad-supported, merchandise and media licensing fees are some of the ways and models that webtoon platforms, including market leaders NAVER WEBTOON and Kakao Entertainment, utilize to profit.

In the last 5-7 years, these companies, Korean tech giants, invested heavily in global distribution, in the process contributing to webtoons becoming the fastest growing comics category in the world. Digital-native generations becoming paying consumers, increased entertainment consumption on mobile devices, explosion in popularity of Asian content - the same trends that fueled the rise of manga and anime - contributed to the global growth of webtoons as well.

All this led The Economist to boldly predict just two years ago that by 2030 the global webtoon market would be worth $56 billion.

However, with increased competition and slowing adoption in developed markets, both Naver and Kakao took stock in 2022/23, reorganizing (including layoffs) and recalibrating. Kakao has just announced that their France-based subsidiary piccoma Europe will shut down in September. Is this the sign of the webtoon business maturing? At the same time, the French media conglomerate Média-Participations - the largest comics content creator in Europe, launched their own webtoon platform ONO in January, with an eye toward the future. So, who is right? Can numbers help us answer this?

In 2023, WEBTOON had approximately 86.5 million MAU (Monthly Average Users) worldwide with nearly 20 million in the U.S. The global webtoon market was valued at $5.5 billion, with the U.S. webtoon market valued at $2.1 billion. Fast Company ranked WEBTOON in the Top 10 of the 2023 World’s Most Innovative Companies, and No. 1 in the Media category. Not too shabby. Note that the U.S. is the third largest webtoon market in the world, after Korea and Japan, where leading platforms have been raking in profits for years now.

As for the continued growth, after the lofty predictions of few years ago, the current ones may be more down to earth, yet still impressive: Per EMR (Expert Market Research) the global webtoon market is projected to grow at a CAGR of 18.6% between 2024 and 2032, reaching $26 billion in 2032.

Even if the French readers may be cooling off to the idea of reading webtoons on their phones, the projections and logic dictate that the continued investment and strategic international expansion are the right course of action. Many in Entertainment and Publishing agree that countries like India or regions like MENA (Middle East North Africa) present a very significant long-term opportunity, despite the fact that not many have yet found effective distribution and monetization models in these parts of the world. Yet, the untapped, addressable market for webtoons (and manga and anime) is significant.

AT LEAST SOME OF THE CREATORS MAKE MONEY

In 2020 in Korea, a "webtoonist" - a webtoon creator - was a top 10 dream job among the elementary school-age children. Legendary are the tales of top "webtoonists" earning in excess of $10 million a year and living a life of luxury. While these are outliers, there are webtoon creators in Korea routinely making $225,000-250,000 per year. Between 2020 and 2021 WEBTOON paid out $27 million to English language creators.

Make no mistake though, it is a demanding job, and like in any creative field the market is crowded and highly competitive, with thousands of titles competing for readers' attention. Few top titles account for large portion of the global webtoon traffic. Still, the barrier to entry for creators is low and platforms like WEBTOON have been sharing ad and licensing revenue and even paying aspiring creators upfront in order to entice and keep webtoonists loyal.

IP OWNERS like the exec I talked to CAN MAKE MONEY, BUT...

If you are an IP owner with webtoon as part of your IP franchise flywheel arsenal, I could understand if you had mixed feelings about your webtoon revenue numbers. Given the readership statistics, you may be expecting to earn much more from your valuable IP. However, not every reader enjoying the content is a paying customer (remember the "freemium" model).

So, what to do? Here's how to best approach extending your IP to webtoons format:

• Expand your KPIs beyond just Revenue. Webtoons are a fantastic opportunity to expand your Reach and popularize your brand. According to WEBTOON CEO in 2021 Gen Z and younger Millennials made up 75% of WEBTOON users worldwide. 70% of the users in the U.S. were under age 24. 58% of WEBTOON users were female. If this is demographic you would like to target, webtoons are a perfect vehicle for it.
• If your IP is deep and broad and malleable enough, develop more than just one title, and explore different genres. Romance, Slice-of-Life, Fantasy, Horror, Action Adventure are some of the most popular webtoon genres; play into those. Here's an example: within the Witcher universe, you could tell an action adventure/ horror (Geralt fights monsters), romance (Geralt loves Yennefer) and comedy (Geralt and his sidekick Dandelion) stories.
• It is crucial for all this to be happening in a strategic high-level partnership with a webtoon platform, taking longer-term view of what success means to all parties involved. This partnership should give you not only acceptable financial terms, but user data (to the extent possible), most extensive international distribution possible and ongoing sales, marketing, and on-platform merchandising support.
• Keep in mind other possible ways to monetize the content, like publishing reformatted print editions of your webtoon titles, producing licensed merchandise and potentially producing other media based on your webtoons (animation).

Good luck, and share your thoughts on the subject, below.