Webtoon and Beyond: The Future of Storytelling and Fandom
Note #4: Why comics are Shaping the Future of Storytelling
Happy Tuesday!
After sharing the Awdio journey in the last three posts, it’s time to chart the course for what’s next. This newsletter is evolving into a space for exploration. The format is still a work in progress, and that’s part of the discovery. Early on, you can expect themes connected to kids, storytelling, games, and education
For this one I wanted to start with looking into the Webcomics business. I think it’s an under appreciated area yet holds a lot of potential, learnings and opportunity.
My exploration of this started as we during Awdio talked a lot about how to build UGC (User Generated Content) driven IP experiences. Few has done this as successfully as webcomics1, and the market leader Webtoon in particular.
In today’s newsletter I’ll go through why webcomics is a unique opportunity to build strong IP and where it can go in the future.
Webcomics unique position to build new IP universes
Webtoon’s unique way of turning fandom into successful IP’s
An overview of the webcomic market
AI’s role in the future of Webcomics
Potential opportunity
1. Why Webcomics has a unique position to build IP
The numbers that reflect how big the market is and how much content is being produced.
The market leader, Webtoon, has 170 million MAU’s, 140,000 new episodes are published daily. They IPO’d earlier this year.
24 million creators are publishing on the Webtoon platform alone
Webtoon has had 900 UGC created titles transferred into new forms of media - books, tv shows and movies
Last year, half of Netflix Anime shows in Korea started as a Webtoon comic
Given the creator base, the next Harry Potter, the next Pikachu... should originate from here
What does he mean when he refers to the “creator base”. He’s referring to 24 million creators, that’s releasing 140,000 episodes daily. Webtoon provides a product called CANVAS, that is their self-publishing platform. Any creator can publish and share their worlds to Webtoon’s audience. This openness drives a wide variety of genres and tones, which results in fresh IP development led by community engagement.
There are three main factors that are driving a huge content funnel and strong fan engagement. Simplicity of format, Episodical nature and a real creator economy.
The simplicity of the format makes it perfect to introduce new story universes
What Webtoon innovated on back when they started in 2005 was the format. They have also hold this format pretty stable for the past 20 years. Their format is a vertical expierence, which is great for mobile. And works as a simple way of going from a comic book style of horizontally going to pages to stacking panels on top of each other. This makes it easy to create new episodes and a new world.
How it works: Creators work in panels, 800x1200 images. Each episode has between 15-50 panels stacked on each other. That’s it from a pure production perspective. Then it’s all about the storytelling, visuals and the craft of making it amazing. As in the example above, the vertical format allows for a lot of things to happen in the white space. The pauses between the images.
The vertical format together with the visual and short form storytelling is perfect for building new worlds that engages audiences. This is one of the most challenging aspect of any storytelling universe. Webcomics are positioned really well to do that. And historically have been the leader of any format to create these IPs.
Episodical nature supports passionate fandoms
Just as Live-ops in games have shown. It’s that the continuous updates are key to keeping a narrative and engagement going around a product. The news feed about the product is as important as the product. Almost.
Webcomics are doing this constantly. Many of these comics have 100 of episodes and a very clear release schedule when new episodes are coming out. The simplicity of the format and the ever expanding universe supports this episodical nature.
Webcomics is Dan Brown and TikTok having a storytelling child. They’re visual, easy to digest and serialized as nothing else.
Supported by a real economy for creators
Not only is it easy to create but there’s a clear rev share economy for creators as well that provide meaningful income to thousands of creators.
Webtoon fosters a community of both amateur and professional creators. Through it’s rev share program it has built an rooster of around 13,000 professional creators earning an average of $48,000 annually. The top 100 creators earned an average of $1 million each.
This has led to an enormous amount of content. The platform hosts a vast and diverse library of webcomics and web novels, with over 450,000 webcomic stories and 55 million web novels. The main number is that it releases about 140,000 new episodes PER DAY.
These four aspects: Creator led IP building, a simple yet very efficient storytelling format, episodical nature of the format that supports fandoms and a real economy for creators are the foundations.
Next, let’s look at what Webtoon, the market leader, does specifically to support building transmedia IPs from these webcomics.
2. Webtoon’s unique way of supporting fandoms
The impact of South Korea
Before we continue we should pause and take a look at where Webtoon and Tapas (the second placed actor in the market) are originating from. South Korea.
South Korea has a very strong culture of creating fandoms around culture. See BTS and K-Pop in general.
What HYBE, the company behind BTS, is doing with music groups is that they’re managing fandoms. They’re creating it from Day 1 to million of fans. That is a skill that is very specific. HYBE seems to be able to translate this skill from their home market to the US and beyond as well.
Webtoon and Tapas is running the K-Pop playbook to a certain extent of building fandoms around their titles and creators.
In both Japan and South Korea there is a path for UGC created webcomics and webnovels then adapted into anime. For example, the Webtoon 'Tower of God' started as a webcomic and later became an anime hit, demonstrating the power of webcomic-driven IP.
We’re now starting to see examples of how this path is being replicated in Western markets, as seen with popular titles like 'Lore Olympus'. This title was first translated into a print graphic novel that reached #1 on NYT Best Seller list. Now it’s being developed into an Anime show on Crunchyroll. So you can see how they’re developing their IP’s step-by-step. Making sure each step is a success and builds on each other.
In Asia, this development is not unusual when a webnovel becomes a hit webtoon, the typical next step is an anime.
A formal structure to bring titles into new mediums
This step-by-step approach is no fluke but a systematic and strategic setup by Webtoon. They have a three-pronged approach to IP development: licensing, co-production, and in-house production. Each method is employed based on the IP’s potential and the level of creative control needed.
Junkoo Kim, their CEO explained this to Forbes during their IPO.
According to Junkoo Kim, WEBTOON looks at IP adaptations from both a business perspective and a marketing perspective. From a marketing perspective, the number of IP adaptations is important, as “the more IP adaptations there are, the more users come back to the platform,” which is why WEBTOON has been able to acquire a large user base. “But in terms of business, we need to control the quality,” he said.
He added, “For licensing...we can really increase the number of IP adaptations. And for co-productions for important IPs, we can control the quality so that it doesn’t differ from the original IP... When we do in-house productions, that’s when we really think that this IP should be done by ourselves, that we really need to control the quality. We’re very selective when we do in-house productions. This is how we manage our IP adaptations, whether it’s live-action series, film projects or printed books—it’s the same approach in all areas.”
Webtoon has setup up a production studio in Korea and one in the US, with the catchy name, Wattpadd WEBTOON Studios. These are the divisions that according to him should deliver the highest quality output, for their “mega-hits”. And they are very active in this space. From the same article:
900 of its titles have been adapted into other formats, including 100+ shows and films on streaming services, 200+ books, 70+ games and over 11 million consumer product units
Below we’ll see how they also highlight IP revenues as one of three areas of revenue in their financial statements. Meaning that IP is the smallest stream at the moment but where they have strong belief that it will grow.
No creator platform without controversies
As with any platform that has a creator economy, where it’s a mix of revenue share, rights management and community there’s bound to be controversies between the platform and it’s creators. Webtoon has definitely had some heat regarding exactly how they support creators. This is one of the key success factors to ongoing success, being able to walk the line between supporting creators while expanding their business as a public company.
3. Market Overview
The webcomics market is currently dominated by two major players—Webtoon and Tapas—who have a solid foothold in content creation and community. Tapas was acquired by the South Korean media company Kakao for $510 million in 2021 and has since grown substantially.
GlobalComix takes a partnership approach and focusing on adapting existing comic books to a digital format. For example they just made a deal with DC Comics. This is a very Business School approach to it but misses the whole growth engine of UGC created content.
The Amazon owned app, ComiXology was retired a couple of years ago and is now integrated into kindle . Meanwhile, startups like VoyceMe and Dashtoon are trying to innovate with AI-driven tools for faster, more accessible creation.
But the main player, and the one we have most information about is Webtoon. They are the original creator of the format back in 2005 and have built a serious business in the past 20 years. They IPO’d earlier this year, which means that they just went through their first quarter as a public company. So let’s take a look at how it looks like.
The Webtoon business
Webtoon’s revenue relies primarily on micro-transactions, where users pay between $0.50-$0.70 per episode to unlock new chapters. This 'snackable' payment model encourages engagement without requiring a subscription commitment. With over hundreds of million transactions per month, it’s a model that thrives on frequent small purchases and a deep emotional investment in storylines.
This is how it looks like from the three different areas of revenue, where direct payments from customers are by far the biggest one.
Paid Content - 75% of revenue: This is the largest revenue stream, driven by user payments for premium episodes and "Fast Pass" access. With a Fast Pass users can unlock episodes ahead of the free release schedule. Paying for episodes are driven by microtransactions, of about $0.50-0.70 per episode.
Advertising - 15%: Webtoon integrates banner and achievement-based ads, with high engagement in regions like Korea and Japan. As with every advertising based product in 2024, AI improved it by showing the right ad to the right people.
IP Adaptations - 10%: Webtoon generates revenue by adapting popular series into other media formats like TV shows, films, and merchandise. This area is anticipated to grow with upcoming projects. Once again posting the key insights from above: “the more IP adaptations there are, the more users come back to the platform”. This viral loop is such a core part of Webtoons and how they think about IP building.
With an understanding of the current market and its major players, the question arises: how does technology, specifically AI, fit into this evolving industry? AI generally promise to revolutionize many creative fields, but what role can it realistically play in the world of webcomics, where emotional connections and unique storytelling are key?
4. Does AI have a role to play in this?
There have been numerous AI x Comics startups funded over the past few years, with VoyceMe and Dashtoon being notable examples. Both companies emphasize their "studio tool" as an enhancer rather than focusing heavily on "generating" content. However, after trying these tools, it’s clear that they still heavily rely on content generation.
My guess is that there's not much of note here. VoyceMe, Dashtoon, and others are primarily in the business of "providing creators with AI-powered tools" to simplify the creative process.
In these tools, much of the art and a significant portion of the story are generated by AI. The question worth asking is, "Why have they built a tool for users to create content when they could just produce everything internally with low effort?"
I assume it’s because they want to leverage the viral loop of the creator economy, where creators create and promote their content attracting new users creating new creators and so on.
However, I think these AI startups are misunderstanding the core part of the creator economy. In today’s market, comic book readers feel connected to the creator and have strong relationships with them. Fans are drawn to creators and their unique visions for the universe. They comment on the latest episodes, fostering communication and interactions that build stronger fandoms.
People want to engage with a creator's world and their unique point of view, but this isn’t how it works with these current tools. Of course, if someone already has a large catalogue of drawings and stories, they could train a model on that content. But these startups aren't targeting existing creators; instead, they're aiming to bring in a new segment of users in. Users who aren't currently creators.
If Gen AI can be successful in this space by creating the main part of the story, the relationship between creators and readers has to change. Essentially, this means ignoring the current comic book market and starting fresh with people who don’t yet have a strong connection to comics.
Another issue is that AI, as it stands today, is very much "thinking inside the box." For a new comic and its universe to cut through the noise and make a unique connection, it will likely need to be something outside the box.
If AI startups can support the creation of authentic creators. Creators that are invested in their worlds and want to build connection to a community, there’s a chance. But too much today is about just “generate a story”.
This is a clear case of "AI benefits the incumbents." This industry is all about the emotional connection with worlds and creators. There's a significant difference between B2C and B2B: in B2B, you can disrupt the cost structure, release a similar product, and gain market share through efficiency. That approach is much more difficult in B2C, and nearly impossible in the webcomics market.
5. An Opportunity: a family friendly platform
A lot of the current webcomics platforms has a different maturity level. The format of comics is very apt to kids. As a supporting tool to making it fun to read, this format is a great opportunity. Apart from making it safe there are a couple of other aspects that could make it interesting.
The total disrespect for kids in today’s comics
As a reader of comics together with my kids it’s clear that the writing is terrible. Especially if you read a comic that’s based on existing IPs it’s the absolute worst. There’s a total disrespect for the craft and for their readers. It’s the prime example of a licensing department that is just focusing on exposure on shelfs without interest in building the larger universe.
Taking comics seriously and sourcing great writing from both new universes and existing novels is such an opportunity in making webcomics awesome for kids. There are a few great examples of course, but mostly in the graphical novels space. Seen fewer great examples in the episodical, weekly published for kids. Let me know if you have a favorite.
Slop as opportunity: AI has a different value when you play creator vs being a creator.
There’s a different value in AI for kids vs AI for grown-ups. I don’t think a “creator economy” is the right framing for a family friendly platform. Hence, the principles on what’s driving the platform are different.
Many grown up platforms need to show a path to “success” for it to attract creators. That often means having an audience or attracting one, showing how you can make revenue and how they will support your growth.
For kids success is different. The audience can be an audience of your three best friends. You play creator. From this perspective the value of AI that lower the barrier and assist provides a different value. Which makes it a path worthy to explore.
Making world building play
The idea below is core from what I learned from building story universes with AI. That if you focus too early on the story and not enough on the “world” everything will break.
To create great stories on a platform you need to make building out the world as play. Characters, places and the lore around also needs to be fun. Don’t stress about getting to create the story but realizing that the journey of building the world is where the value is. Customization play and God play are both key patterns for this.
As shown in this example, if you give an LLM a 308 page role playing manual with rules and lore then the LLMs are great at for example role playing and character creation. But you need to have the 308 page manual to begin with. This is what so many skips at the moment.
There’s a lot more to it of course, but a family-friendly platform that combines a strong library of new comic creators while empowering kids to create, while providing parental oversight, could tap into a largely unmet demand. AI tools could make it easy for young creators to build their own stories, thus fostering both a safe environment and an early fan base.
That’s all for this week, let me know in the comments if I missed something, you disagree or agree.
Much Love,
Jonas
I’ve chosen to call the format “webcomics” in this article. Even if Webtoons are often used to refer to this format. However, I feel it becomes too confusing to have one name for both Webtoon the company and webtoon the format.