Naver and Kakao, webtoon followed by web novels to hit the global market

Enter 2021.01.21 06:00

Naver acquires world’s largest web novel platform’Watpad’
160 million users of Naver webtoons and web novels worldwide
Kakao also invests in a web novel platform that ranks second to third in sales in North America

Naver and Kakao are expected to compete in the global market with web novels following webtoons. The two platform powers are accelerating the expansion of overseas business by making investments of tens and hundreds of billions of billions one after another. Interest is focused on content competition aiming for the global throne beyond the first and second place in Korea.

On the 21st, Naver announced that it has decided to acquire the Canadian web novel platform Whatpad for about 653 billion won. Whatpad is the world’s largest storytelling platform with 90 million global readers. Naver said, “Through this acquisition, we have the world’s No. 1 platform in webtoon and web fiction, respectively.” The number of monthly users of Naver Webtoon is 72 million. When simply combined with Whatpad, more than 160 million people each month use Naver’s webtoon and web fiction platform.

Naver Webtoon CEO Kim Joon-koo said, “We have secured even more diverse story contents through Whatpad. We will make web novel writers more active overseas as Korean writers are already active in the world through Naver Webtoon.”

The biggest reason Naver’s acquisition of Whatpad raises expectations is that the web novel business goes well with webtoons. Wattpad has 1 billion story contents left by 5 million creators. Here, the verified web novel is recreated into a webtoon.

Naver said, “We have already verified the success of web toonization based on web novels through the perspective of remarried empresses and omniscient readers,” and said, “Especially, 80% of Watpad users consist of Generation Z (generations born in the mid-1990s to early 2000s) It is possible to show content that has been popular with people in their teens and twenties as a webtoon.” In addition, since Whatpad also has a WhatPad studio that produces video, it is expected that it will make various images of the original content along with Naver Webtoon’s Studio N.

It is also interesting to note how Wattpad will improve its business model, which has secured the most users and contents, but has not been able to generate adequate profits. Although Wattpad is the No. 1 web novel platform by scale, it was only at the top 10 in the same industry by sales. Naver plans to advance the platform and business model of Wattpad by incorporating the intellectual property (IP) business know-how accumulated by Naver Webtoon. Since 2013, Naver Webtoon has been using the PPS program (Page Profit Share Program), which leads to paid viewing, advertisements, and IP business, and is expected to fill the shortcomings of Wattpad in business.

Kakao is also expanding its horizons in the North American market by investing in local content companies such as radish and tapas. Radish, an English web novel platform established in the US by Korean Lee Seung-yoon, is showing explosive growth in recent years. Monthly sales from 100 million won in 2019 amounted to about 3 billion won last year. It means making 100 million won a day. As of July last year, the number of users per month is about 700,000, which is far less than that of WhatPad, but in terms of sales, it ranks second to third in US book apps after Amazon’s audio book, Orderable.

Kakao Page, a webtoon and web novel platform company of Kakao, invested a total of 76 billion won with Softbank Ventures in July last year, seeing the possibility of Radish high. In addition, Lee Jin-soo, CEO of Kakao Page, Lee Jun-pyo, CEO of SoftBank Ventures, and former Naver CEO Kim Sang-heon, joined Radish as outside directors.

Kakao Page is envisioning a global network covering the United States, China, and Southeast Asia. Radish investment is in line with Kakao’s global market penetration by securing domestic and international IPs. Starting with Radish, Kakao Page has invested in Cross Pictures, DNC Media, Tapas, and Two You Dream. The funds spent here alone amounted to about 100 billion won. Among them, Tapas is also a webtoon platform company based in North America. Kakao Page provided major contents between July and November of last year with the tapas investment, and recorded sales of $850,000 (about 950 million won) in only 14 works.

An IT industry official said, “As many Hollywood masterpieces such as The Lord of the Rings, Harry Potter, and Twilight are based on best-selling novels, the power of web fiction comes from the use of IP.” As Dun Naver took over Watpad, it had a big inflection point. The official said, “However, because Wattpad is a way to provide web novels in the form of a community, it has a different aspect from the content platform that you generally think of.” Is the key.”