Webtoon's Disney deal diversifies content to draw readers
In interviews with Animenomics, Webtoon Entertainment executives outline the digital comics company's plans and challenges for growing in the U.S. and other markets
This is a feature story from Animenomics, covering the business of anime and manga.
Webtoon Entertainment (WBTN 0.00%↑) announced a content deal with Disney last week, bringing around 100 new and existing Disney comics titles onto the Webtoon platform for vertically scrolling comics over the next four years.
Why it matters: One year after Webtoon Entertainment’s debut on the Nasdaq stock exchange, the digital comics company controlled by South Korean internet giant Naver is accelerating investment in Webtoon’s English-language edition to counter a decline in global readership.
The company also announced separate content deals with San Diego-based comics publisher IDW Publishing and with Dark Horse Comics earlier this year.
By the numbers: English-language monthly active users on the Webtoon mobile app climbed 19 percent year-over-year for the second consecutive quarter, chief executive officer Junkoo Kim told shareholders on Tuesday.
“We remain focused on driving app users, who are typically more engaged and present better monetization opportunities compared to web users,” the company said.
Monthly active users across all Webtoon Entertainment platforms in South Korea, Japan, and other parts of the world, on the other hand, fell 7.6 percent year-over-year in the second quarter to 156.1 million.
Zoom in: While comics by independent creators remain Webtoon’s core business, the company sees content from established comics publishers as a way to draw readers to the platform, enticing new creators to join and further attract readers.
“Our content and format are a favorite among Gen Z, and we believe we’ll see more users and engagement as we continue to grow our creator ecosystem,” chief strategy officer Yongsoo Kim told Animenomics immediately following the company’s second quarter earnings announcement.
Zoom out: Webtoon Entertainment’s Japanese platform LINE Manga, operated by local subsidiary LINE Digital Frontier, has also used the same playbook of working with established publishers to great success.
“LINE Manga tries to include all genres and serve all populations,” LINE Digital Frontier chief growth officer Sinbae Kim told Animenomics. “We are trying to be a player with broad coverage by utilizing non-exclusive manga content.”
LINE Digital Frontier’s working relationship with Square Enix, among other manga publishers, recently enabled Webtoon to bring Fullmetal Alchemist to the global platform in the vertically scrolling format.
Friction point: Webtoon Entertainment’s challenge with brand awareness lies in the different names the company’s platforms use in different markets.
In its home market in South Korea, the platform is known as Naver Webtoon. In Japan, it’s LINE Manga. In the rest of the world, the platform is simply Webtoon.
What we’re watching: In its major markets, Webtoon Entertainment is increasingly tapping into screen adaptations to raise brand awareness.
Expanding beyond Korean television and film productions, Webtoon Entertainment’s North American IP business, recently rebranded as Webtoon Productions, are working with Hollywood studios tied to director Ron Howard, actress Margot Robbie, and others to produce English-language content.
The company is also forming anime production committees and working with Japanese and South Korean studios on more than 20 projects based on its own IPs, including Teenage Mercenary and Dark Moon: The Blood Altar.
The bottom line: “We keep innovating our product, and our IP adaptation business is growing,” chief strategy officer Yongsoo Kim said. “With these key strategies, I believe Webtoon will keep growing even further and faster.”
Go deeper: Read the interview with Webtoon Entertainment chief strategy officer Yongsoo Kim and LINE Digital Frontier chief growth officer Sinbae Kim below.
The United States is counted as part of the Rest of World segment in Webtoon Entertainment financials. What kind of trajectory can we expect from the U.S., and what are the opportunities and challenges for growing this territory into a more prominent segment in Webtoon Entertainment’s business?
Yongsoo Kim, Webtoon Entertainment chief strategy officer: While we don’t break out U.S. results or growth projections within ROW, what I can share is that Webtoon is the global leader in our category, and we’re just beginning to penetrate a massive and growing addressable market opportunity. We’re dominant in Korea, have a strong foothold in Japan as the number one app across iOS and Google Play, and in the earliest stages of a massive market opportunity in North America. This past quarter, our English-language webcomic app’s monthly active users increased 19 percent for the second consecutive quarter, showing the power and potential of our global English platform.
Webtoon content and creators are everywhere, and our influence on pop culture has never been greater. We have hits on screens and bookshelves all over the world, and our content is on Netflix, Disney+, Crunchyroll, and more, fueling the global entertainment industry.
Our content and format are a favorite among Gen Z, and we believe we’ll see more users and engagement as we continue to grow our U.S. creator ecosystem. This year, we’ve started to diversify our content in the U.S., working with leading publishers and entertainment companies to bring fan-favorite franchises to Webtoon. Just today, we announced that we’re teaming up with Disney to bring iconic titles featuring Spider-Man, The Avengers, Star Wars, Alien, and more to our mobile vertical-scroll format. We’ll have a new, dedicated Disney section on Webtoon that will make it easier than ever for fans to enter their favorite Disney universes anytime, anywhere.
As part of our collaboration, we’re also teaming up to develop original series that explore new storylines from fan-favorite universes. All of this marks the first step in a collaboration that will bring around 100 Disney comic series to our global English platform over the next four years.
By creating the best platform for every kind of creator, offering some of the best IP in the world, and continually innovating to deepen engagement, we’re excited to continue growing our U.S. business.
The term webtoon is synonymous to vertically scrolling webcomics, and your company is listed in the U.S. as Webtoon Entertainment. Is having the name Webtoon Entertainment while the product itself is also called webtoon beneficial to you as a business?
Y.S. Kim: As you’ve noticed, we keep focusing on our new brand name Webtoon. That is our statement that we’re really focusing on our growth in the global market. In Korea, everyone knows Naver; in Japan, everyone knows LINE. But, in the global market, especially in the U.S., no one knows Naver or LINE. We need to let our users know what Webtoon is by focusing on our immersive new format for users to be able to enjoy the digital storytelling platform. We also showcase how webtoons provide differentiated content and how the webtoon creation process is different.
Yes, it’ll be tough—it won’t be easy because we aren’t leveraging the existing Naver or LINE name. In the U.S. market, we go by Webtoon because we want to make it an independent brand with a new platform for a new industry. Making Webtoon a listed company last year was a meaningful first step. The IPO itself is a statement that Webtoon represents a new category and a new industry for the digital storytelling era.
Sinbae Kim, LINE Digital Frontier chief growth officer: Frankly speaking, we don’t use the word “webtoon” in Japan. Each market—whether it’s Korea, Japan, or the U.S.—has a different view of comics. In Japan, manga is considered part of the main culture, and everyone enjoys reading manga. We don’t want readers to separate webtoons from manga; we want them to accept webtoons as part of manga. That’s why we intentionally aren’t using the Webtoon brand, except as a company name.
While we aren’t using the Webtoon name with our Japanese readers and users yet, we’re also watching how the market moves. In the future, we may follow the global brand, or we may maintain our Japanese brand as is.
In my early conversations with your team, they used the term webcomics. Does Webtoon prefer that we use the term webcomics over webtoon?
Y.S. Kim: We use Webtoon as our corporate brand and corporate name, and we consider webcomics as one of the different formats of digital storytelling. Our position is that Webtoon is the top player who pioneered the webcomics industry. That’s how we view webcomics in relation to Webtoon.