When webtoon platforms first appeared, it was pretty clear what they were: apps to aggregate, distribute and read vertically-scrolling comics on mobile devices. These days it’s not so simple. As markets have become mature and the low-hanging fruit of user growth has all been harvested, it is harder for webtoon companies to drive the kind of big numbers that keep investors happy without looking elsewhere for new sources of revenue.
Weird times for WEBTOON. You don’t have to look much further than WEBTOON Entertainment itself. In its most recent quarterly earnings report, middling topline results masked an important shift in the company’s mode of operations. Growth was strong in Korea and international markets but down in all-important Japan, despite being one of the most popular comic apps there. Ad growth was stronger than user conversions to paid subscriptions. In Q1 2026, revenue from IP adaptations was down 23% from the previous year.
That led the company to announce an ambitious new initiative to fund content development with creators in exchange for a share of the IP rights, a move that we could all see coming based on the trajectory of WEBTOON’s investments in its ecosystem and studio (recently rebranded WEBTOON Productions) over the past few years.
All this shows WEBTOON is moving upstream into production, perhaps as a hedge against the inevitable decline of global growth as competition increases and market white space vanishes.
But that by itself doesn’t solve the company’s, or the industry’s, problem. IP adaptation is a lumpy business. For every Tower of God or Lore Olympus, there are dozens of investments that don’t pay off. Even with fine-grained market data from their back-end digital platform, there is no surefire way to manufacture hits.
That’s why another one of the company’s moves is instructive. Earlier this year, WEBTOON Entertainment’s Japanese arm, LINE Digital Frontier, joined with Kodakawa and REDICE studio to create Studio White. The goal is to adapt existing popular manga IP like Record of Lodoss War, Sword Art Online, Slayer, and the Familiar of Zero into new vertical scroll series on the WEBTOON platform.
Here in North America, WEBTOON is up to largely the same thing with its partnerships with Marvel Comics, DC Comics, Dark Horse Comics and others. In both Japan and the U.S., publishers of both corporate and creator-owned IP are looking for ways to reach the mobile-first audience, and WEBTOON is positioning itself, reasonably enough, as the expert in that market. Their value proposition to these partners is not simply to be another digital distribution outlet, a role that is quickly becoming a commodity with the proliferation of new entrants, but essentially to become a specialty publisher for a defined niche of the digital space.
So what does that make WEBTOON? A marketplace app? An ad platform? A distributor? A packager? A publisher? A licensor? A licensee? A production studio? A content co-creator?
Yes. Exactly.
Everyone in the industry is changing places. It’s not just the one company. Players at every level of the industry are looking to smudge the boundaries between what they are and what they think they need to be.
GlobalComix has long been interested in testing the theory that reformatting existing page-and-panel comics for vertical scroll is the secret to breaking through the market barriers that have long held digital to around 15% of the total U.S. comics market (see “How GlobalComix is Trying to Bring a Webtoon Reading Experience to Panel and Page Comics“). Their ongoing program with publisher like DC and Vault has resulted in some interesting aesthetic experiments. It will be interesting to see how much market traction these are getting, and whether the juice of new user growth is worth the squeeze of reformatting.
The picture gets even more complicated when publishers decide to skip the middleman and become the platform themselves. A couple of years ago, Shueisha launched JUMP TOON and a creator platform, JUMP TOON NEXT, to bring some of its own popular titles like Gaga Manga Biyori, Haikyuu!! and Goldfish Wife to a mobile-first platform, alongside mobile-first originals.
Meanwhile Tapas, which in its heyday was a potential eye-level competitor with WEBTOON, is moving in a slightly different direction. Having failed at its ambitious efforts on premium English-language production, the company has continued to pursue print publishing, inbound licensing and publishing partnerships, while striking deals with prominent creators who have soured on WEBTOON or other platforms for various reasons.
Last month, Kakao announced it was merging three of its story content subsidiaries, Samyang C&C, Intime and Pilyeon Management, to bring its various arms specializing in webtoons and web novels under the same umbrella as its licensing, production, merchandise and adaptations.
This is further evidence that even the big players are hedging their bets to such a degree that it’s hard to see where the bet ends and the hedge begins.
The great muddle. All this restlessness is driven by each company’s need to show its stakeholders that it is more than it has traditionally been, because those traditional roles alone are no longer enough to create the kind of growth necessary to survive in the current market.
In the old model, publishers (or creators) owned IP and licensed it to platforms; platforms distributed the content and owned the audience (and the data that does with it). The term “webtoon” referred to a format of digital content. Adaptation was something that happened as a reward for success.
What we are headed toward is a much more complicated system. Platforms and publishers, each wanting what the other has got, are teaming up to jointly develop IP, in part using analytics and AI to supercharge the discovery and monetization process.
Platforms license content from or partner with publishers as a means to build the audience, which has a couple of beneficial effects. It creates more surface area for ad sales, which, as we’ve seen from WEBTOON’s recent results, are becoming a non-trivial element in the revenue picture. They also bring built-in audiences whose data can be dumped into the pile around content creation and discovery. If the goal is to become an IP incubator rather than just a mechanism for selling more content to more readers, then this is a necessary step.
In this whole game of Mousetrap, “Webtoons” become a development pipeline rather than just a format, and adaptation becomes a necessary element of the business strategy, not a nice-to-have.
Meanwhile here in the physical world… All of this is very high stakes for the platforms and fairly necessary for you to monitor if you are a publisher, licensor or creator, but what does it mean for sales at retail?
We’re already starting to see it. As digital-first content moves along the conveyor belt and becomes big-time IP, one major output is going to be physical merchandise. Solo Leveling anyone? Or look at the major Tapas hit The Beginning After the End, which started as a webnovel, became a webtoon, then an anime, now a graphic novel series, and probably soon, more stuff like games and merch.
The best-case scenario for the great muddle is more hit properties bringing in more fans through more doorways. But it’s a very expensive bet, and we’re still in the ugly, unfinished stages of it.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
Rob Salkowitz (Bluesky @robsalk) is the author of Comic-Con and the Business of Pop Culture, a two-time Eisner Award nominee, and a proud longtime contributor to Eisner-nominated ICv2.
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Source: ICv2
