Naver acquires Canada’s’Whatpad’, the world’s largest web novel distributor. It is to strengthen the entertainment business by securing content containing stories. It is analyzed that this investment is an extension of one of Naver’s major investment strategies,’global strategy’.
Acquisition of the world’s number one web fiction company
Naver announced on the 20th that it had held the board of directors on the 19th and decided to acquire 100% of Watpad for 653.25 billion won. This is Naver’s largest investment in external corporations ever. Founded in 2006, Wattpad is the world’s largest web novel distribution service used by more than 90 million people around the world. It has over 1 billion contents written by 500 writers. Naver explained that the monthly usage time reaches 23 billion minutes. Naver CEO Han Sung-sook said, “Whatpad’s vision to entertain global users through stories fits perfectly with Naver’s vision.”
Naver plans to further enhance the competitiveness of Wattpad through this investment. The profit model, which has already been effective in webtoons, will be applied to web novels. In 2013, Naver introduced the’page profit share (PPS) program’, a system for sharing profits by authors that lead to webtoon viewing and advertisement/intellectual property (IP) businesses for a fee. The following year, it started overseas services such as English and Chinese, and developed webtoon into a global industry. Web novels verified in Whatpad are planned to be produced as webtoons. Naver Webtoon has already released webtoons based on web novels, such as’The Empress Remarriage’ and’All-Inclusive Readers’.
Kim Jun-goo, CEO of Naver Webtoon, said, “As Korean writers have already made more profits in the global market through Naver Webtoon, we will try to make domestic web novel writers more active overseas with this investment.”
With this acquisition, Naver is expected to emerge as a leader in the global content industry. This is because it has become the number one business in both webtoon and web fiction distribution. According to Naver, the global monthly unique users (MAU) of Whatpad and Naver’s webtoon distribution service amount to 160 million. It has also gained an edge over global 10-20 users. Naver explained that 80% of Wattpad users are’Generation Z’born after the mid-1990s. The main users of the Naver webtoon service are also in their 10s to 20s.
Is the OTT market a key target?
There is also an analysis that Naver made this investment aiming at the rapidly growing global online video service (OTT) market. Recently, global OTT operators such as Netflix and Disney Plus are focusing their efforts on finding stories that will be made into movies or dramas. OTT platforms are increasing because there is a limit to securing exclusive content that users like. This is why interest in Korean webtoons has recently increased in the OTT market.
‘Sweet Home’, Netflix’s exclusive content made from the original work distributed on Naver Webtoon, ranked first in Netflix’s viewing rankings in a total of eight countries including Korea, Malaysia, Philippines, Singapore, Taiwan, Qatar, Thailand, and Vietnam. As of last month, it ranked 8th in the US and recorded 1.2 billion views worldwide.
This is not the first time that Naver has invested hundreds of billions of won to target the global market. Naver invested 100 billion won in SM Entertainment in August of last year. This is to strengthen the competitiveness of’V Live’, a global K-pop community platform. Naver’s goal is to secure additional global K-pop fans by recruiting SM’s popular K-pop singers. Last year, the company exchanged 600 billion won worth of shares with CJ Group to strengthen its global market penetration. The two sides joined hands to produce Naver’s webtoon IP in CJ’s subsidiary, Studio Dragon, and release it to the global market.
In addition to targeting the global market, Naver has been “securing advanced technology” (acquisition of Xerox Research Center Europe, technology-based startup investment, etc.) and “Attacking MZ generation (millennial generation + generation Z)” (YG entertainment investment, acquisition of Watpad) It is expanding investment around
Reporter Kim Joo-wan [email protected]