[DigitalToday reporter Ho-jeong Lee] Major domestic webtoon platforms are entering the short-form content market in succession. Kakao Piccoma is adding a short-form animation-only category to the Japanese platform Piccoma. Naver Webtoon, Ridi and Lezhin Entertainment are also building short-form ecosystems in their own ways.

The push is an attempt to rework webtoon and comic intellectual property into short videos to widen user touchpoints and link them to paid spending. Behind it is a shared sense of crisis over slowing market growth and intensifying competition for users’ time.

Growth slows in webtoon market; short-form fuels competition for time

In the first quarter, Kakao’s Story segment and Naver’s Content segment both declined from a year earlier, underscoring a slowdown in webtoon business growth. Revenue in Kakao’s Story segment fell 14 percent to 182.4 billion won from a year earlier, and Kakao Piccoma alone posted 112.0 billion won, down 10 percent. Revenue in Naver’s Content segment also slipped 1.4 percent to 440.1 billion won. Webtoon Entertainment, the parent company of Naver Webtoon, had 157.0 million monthly active users at the end of last year, down 12 million from a year earlier.

Market indicators at home and abroad also point in the same direction. According to the Korea Creative Content Agency, growth in South Korea’s webtoon market in 2024 was 4.4 percent, and Japan’s manga market fell 1.7 percent from a year earlier, posting negative growth for the first time in eight years.

Users’ time is also being seen as shifting rapidly to TikTok, YouTube Shorts and Instagram Reels. In a Korea Communications Commission survey, last year’s short-form usage rate in South Korea reached 78.9 percent. In a Korea Creative Content Agency survey, 58.5 percent of users said they had used webtoon-based short-form content. It is evidence of a spreading consumption pattern in which users first explore content through short videos and scenes before binge-reading by episode.

Kakao focuses on discovery, Naver on participation as short-form strategies diverge

Kakao Piccoma will add a short-form animation-only category, Anime (ANIME), to Piccoma at the end of this month. It will produce short animations based on Japanese manga and webtoons offered on Piccoma, and AI will be used in some production. It follows the IP merchandise lottery service Piccoma Kuji launched in December, expanding IP use into video this time.

In South Korea, Kakao Entertainment introduced the AI-based short-form feature Helix Shorts on KakaoPage in April last year. AI analyses key scenes, composition and dialogue in webtoons and automatically generates short introductory videos, allowing users to grasp a story’s outline before viewing a title. Rather than growing the videos as standalone content, it uses them as an entry point to help users discover works.

Naver Webtoon has a different focus. Cuts, a short-form animation service launched in September last year, is a user-generated content structure in which fans and creators directly make and consume animations of under 2 minutes. Cuts short animations based on the webtoon Love Revolution, which ended three years ago, surpassed 1 million views, confirming a re-consumption effect for completed IP. Since May, it has also been running a creator support programme worth 100 million won per month.

Naver Webtoon is also preparing to launch a paid currency dedicated to Cuts, called Jelly, with a target of the second half. Since existing webtoon users are accustomed to paying with cookies, how intuitively it designs the top-up method and the relationship between Jelly and cookies is also cited as a task.

If Kakao uses short-form as an entry point for discovery that funnels users into enjoying original works, Naver is closer to growing it into a separate video ecosystem that includes fandom participation and payments.

Ridi and Lezhin Entertainment are approaching the space through a short-drama format. Ridi introduced a short-drama service called KANTA in Japan, and some Korean short dramas have drawn attention locally, testing market potential. Lezhin Entertainment also joined the push by launching Lezhin Snack in February.

Can short-form evolve into a business model? Paid conversion is key

The key issue is whether short-form leads to actual payments beyond traffic. Monetisation methods being discussed include inserting ads, steering users to pay for full episodes and partial paywalls. Shin Jong-hwan (신종환), Kakao’s CFO, said on a first-quarter conference call that rising consumption of short-form content on KakaoTalk drove ad growth. That confirms the possibility that short-form viewing can translate into ad revenue.

Still, there is no guarantee that longer time spent will lead directly to more paid spending. Users who watch only short videos and leave, quality issues with AI-generated videos, and profit sharing between original authors and creators are common challenges for each platform.

An industry official said, "It is hard to view a webtoon platform’s short-form strategy as successful just by drawing users in," adding, "Whether it can build a structure in which short-video consumption leads to enjoying original works, payments and creator compensation will be the core of competition going forward."