South Korea’s portal giant Naver Corp. will acquire Wattpad, the world's largest web novel platform based in Toronto, for 653.2 billion won ($593 million) in a move to beef up storytelling content for its entertainment operations. The deal is seen as part of Naver's strategy to secure a leading position in the global content market.
Naver announced on Jan. 20 that it has decided to acquire a 100% stake in Wattpad, which will mark the company's largest-ever investment in an external company.
The deal is expected to position the Korean internet giant as a frontrunner in both the webtoon (digital comics) and the web novel industries. The Korean company's webtoon platform, Naver Webtoon, and Wattpad together will draw in around 160 million monthly active users.
The two platforms' primary users are Gen Zers and millennials, which account for 80% of the web novel platform's traffic.
“Wattpad’s mission to entertain global users through storytelling aligns with Naver’s mission,” said Han Seong-sook, the chief executive of Naver.
Graphics by Jerry Lee Graphics by Jerry Lee
Founded in 2006, Wattpad boasts over 90 million users and offers around 1 billion stories. According to Naver, users combined spend almost 23 billion minutes on the storytelling platform each month.
Naver hopes to boost Wattpad’s competitiveness through the investment by applying the business model from its webtoon platform, which has a proven track record.
In 2013, Naver rolled out a page profit share (PPS) program whereby writers could make additional profit through paid viewing, advertising and intellectual property rights. The following year, Naver launched global services for webtoons, giving local artists a chance to tap into larger markets.
Naver plans to create webtoon versions of stories that have become popular on Wattpad. Naver Webtoon has already released works based on web novels, such as Remarried Empress and the Omniscient Reader's Viewpoint.
“Just like local artists who make a pretty penny in global markets via Naver Webtoon, we will strive to help local writers venture abroad through this deal,” said Kim Joon-ku, the chief executive of Naver Webtoon.
Popular web novel Remarried Empress was adapted into a webtoon.
NAVER'S RICH CONTENT LIKELY TO ATTRACT STREAMING SERVICES
Some industry watchers say that Naver specifically had the global streaming market in mind when it decided to acquire Wattpad.
Global over-the-top (OTT) service providers such as Netflix and Disney Plus have been searching for stories to adapt into movies or drama series, as it becomes challenging to secure exclusive content amid the growing number of OTT platforms.
Last month, Netflix released original series Sweet Home, based on a Naver Webtoon, which became the most-viewed show in eight countries, including Malaysia, Singapore, Taiwan, Vietnam, the Philippines, Thailand and Qatar. It was also the eighth most-viewed show in the US.
Netflix Original drama series Sweet Home (Courtesy of Netflix) This is not the first time Naver has invested millions of dollars to bolster its global market expansion.
Last August, Naver invested 100 billion won ($91 million) in SM Entertainment in a move to attract global K-pop fans by recruiting the label's popular artists, such as BoA, EXO, NCT and Red Velvet, on its streaming platform, V Live.
The Korean platform operator also engaged in a 600 billion won share-swap deal with the country’s entertainment titan CJ Group to create synergy in their entertainment content businesses. Through the deal, the entertainment group's production arm, Studio Dragon Corp., will create shows using Naver Webtoon's IP portfolio.
Write to Joo-wan Kim at kjwan@hankyung.com Danbee Lee edited this article.
