Is the Webtoon Industry in Crisis? (Part 2)
Is it selfish to say, "I hope not"?
Welcome to part 2 of my analysis of the Maeil Business Newspaper (MBN) looking at the factors contributing to the webtoon industry’s crisis in a published article.
I won’t be going over the previous points, so if you haven’t already, read Part 1 here.
Korea’s Two-Party System
With Korea’s recent spate of small and mid-sized webtoon platform closures, it’s more evident than ever that there are only two mainstream webtoon platforms: Kakao and Naver.
This coincides with the current push by Kakao to lighten the load on their entertainment subsidiary while Naver seeks profitability. Both of these strategies are causing ripples in the webtoon industry at a time when there are few alternative publishers that creatives can sign with.
In a survey by the Korea Creative Content Agency, the average income for webtoon creatives shrunk from 64.8 million KRW in 2023 to 42.7 million KRW in 2024. Whether this is due to (1) increased competition due to the number of webtoons being published every year, (2) reduced negotiating power due to the shrinking number of webtoon platforms, or (3) operational strategies by publishers themselves, the pattern is likely to continue into 2025.
The Korean government has stepped up, taking actions like updating boilerplate contracts and informing creatives about the importance of secondary IP rights, but with the exception of a few key companies, the industry as a whole has yet to meet the Korean government’s expectations.
Worse-still, secondary platforms like Lezhin and Toptoon have firmly quit attempts to enter the mainstream market in order to solidify their own standings in the adult content market.
The real concerns will start if either Naver or Kakao implement generative AI measures. Currently, only one platform has publicly embraced AI in the webtoon production process with Toomics touting the popularity of two titles in international markets.
But behind the scenes, the results of Naver’s experiments with generative AI in copying webtoon styles are obvious with webtoon photobooths popping up around Seoul. And if Naver’s working on projects like this, it’s unlikely that Kakao isn’t.
Costly Hurdles to Attempt International Markets
This might be the only section in which I disagree with MBN’s anlysis wholeheartedly. The translation and typesetting costs traditionally associated with international webtoon distribution have gone down significantly over the past few years. Enough so that international distribution of webtoons is more accessible than ever.
The problem? There’s a quality tradeoff.
Due to the prevalence of AI translation and typesetting tools, it’s possible to have a webtoon translated and typeset for international audiences within an hour. But the questionable quality would point audiences to a cheaper and better alternatives on piracy sites.
There are two major issues with international distribution in the webtoon market:
The main players in western markets are set and no local competitors appear to be able to properly compete with Korean platforms
The recent failures of webtoons to penetrate and survive in the European and Southeast Asian markets.
And with KOCCA’s recent government grants aimed at working with overseas studios and creatives, it’s becoming more obvious that the future of webtoons may not be Korean webtoons.
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It’s a bit disappointing to say that a lot of the precursors to disaster that MBN talked about feel relevant. Not necessarily of a crisis, but certainly an identity crisis.
One thing a lot of folks don’t realize is that the webtoon industry started in tech, not manhwa. It was an extension of digital content delivery that found common ground with the goals of manhwa creatives.
And like many recent tech advances, it’s still trying to find it’s feet.