[비즈한국] Dreaming of becoming a ‘long-running content player like Disney,’ Naver035420 Webtoon, which set its sights on the global stage, is facing a series of setbacks. Despite issuing an official apology regarding the controversy over its passive stance on misogynistic content, public sentiment has not subsided, escalating from a boycott of specific works to a boycott of the platform itself. Since the Nasdaq listing, CEO Kim Jun-koo of Naver Webtoon has been saddled with increasing management variables. Recovering the stock price, which has fallen by half, and resolving labor-management conflicts sparked by 'compensation gaps' are considered top priorities. How will CEO Kim, a legendary figure in the webtoon industry, navigate this crisis?
Character
CEO Kim Jun-koo is the primary contributor who built the current Naver Webtoon. He has led the company's history from the inception of Naver's webtoon service to its spin-off and subsequent Nasdaq listing. A self-proclaimed 'manga fanatic,' CEO Kim is a quintessential example of someone who aligned his career with his passion, starting as an entry-level employee in his field of interest and rising to the position of CEO.
Born in 1977, the 47-year-old CEO is a young leader. His former trademark of yellow-dyed hair revealed him to be more of a realist than a 'geek.' It wasn't merely an expression of personal taste, but a strategic tool to imprint his face and image on overseas business partners. CEO Kim entered Seoul National University in 1997 and graduated with a degree in Chemical and Biological Engineering. He joined NHN, the predecessor to Naver, in 2004 as an entry-level developer. While his original task was developing Naver's search engine, he was also assigned to manage the manga service—a choice driven by his lifelong hobby. Possessing a collection of over 8,800 manga books, CEO Kim became the key figure who opened up the webtoon market and successfully debuted the company on the New York Stock Exchange.
Career
Naver's manga service began by scanning physical comic books and distributing them online. At the time, manga content was emerging as a 'lock-in' strategy for search engines. It wasn't until later that webtoons, optimized for the online environment, were born. CEO Kim led the entire process until Naver launched its full-scale webtoon service in 2005.
He is also famous for discovering first-generation webtoon artists and maintaining their support to this day. Artists such as Kim Gyu-sam of 'Entrance Exam Prestige Private High School (Jungle High),' Jo Seok of 'The Sound of Your Heart,' Kian84 of 'Fashion King,' and Lee Mal-nyeon of 'Lee Mal-nyeon Journey to the West' are well-known for having gone through thick and thin with CEO Kim.
One of the works he discovered through the new artist recruitment system 'Challenge Comics' during his time as an employee was 'The Sound of Your Heart.' Starting as an ordinary staff member and moving through the ranks as a webtoon editor-in-chief, he became the head of the business unit just 10 years after joining the company. The Naver Webtoon and Webnovel business was separated into a Company-in-Company (CIC) in 2015, and in May 2017, Naver Webtoon became the first independent corporation to spin off from the CIC, with Kim appointed as its inaugural CEO.
Capability
Following its spin-off as an independent company, Naver Webtoon expanded its scale. It established a paid model allowing readers to preview webtoons and extended its reach into content business utilizing webtoon intellectual property (IP).
The ‘daily serialization system’ and the PPS (Page Profit Share) model, which diversifies creator revenue, created by CEO Kim have had a significant impact on the industry. The daily system, applied to Naver Webtoon for the first time in the industry, is credited with playing a vital role in creating a loyal readership by exposing works on a regular basis.
Introduced in 2013, PPS is a creator revenue diversification model centered on paid content sales, advertising, and IP business. It functions as a way for the company and the authors to share profits from advertisements placed under webtoons. Designed as a form of performance incentive, the intent was to create a more stable income structure for creators who previously relied solely on manuscript fees. The scale of PPS, which was 23.2 billion KRW at the time of its introduction, surpassed 1 trillion KRW in 2021 and exceeded 2 trillion KRW in annual revenue the following year. Last year, marking its 10th anniversary, the program was rebranded as ‘Partners Profit Share’ (PPS).
Critical
Webtoon Entertainment, the parent company of Naver Webtoon and its U.S. entity, listed on the New York Stock Exchange at the end of this June. CEO Kim also serves as the CEO of Webtoon Entertainment. Recognizing his contribution in strengthening the webtoon ecosystem—which originated in South Korea—and successfully taking Naver Webtoon to the Nasdaq, he was granted significant financial compensation. CEO Kim is set to receive a cash bonus of $30 million (approximately 41.6 billion KRW), Restricted Stock Units (RSUs) for 14,815 common shares of the company, and 115,000 stock options.
While this can be seen as recognition for his 20 years of contribution, it has inadvertently fueled labor-management conflict. The issue of additional compensation following the IPO is central. The Naver Webtoon union is demanding further compensation, arguing that the exercise price for employee stock options is over $20, making profit realization impossible at the current stock price. As of the 25th (local time), Webtoon Entertainment's stock is trading at $11.37. The union claims that employees participated in management efficiency efforts, such as reduced incentives since last year, aiming for the Nasdaq listing, yet the rewards have been excessively concentrated on some executives, including CEO Kim. Internal conflict surfaced recently when the union submitted an application for labor dispute mediation to the local labor commission.
Challenges
CEO Kim, who celebrated Naver Webtoon's listing in New York's Times Square four months ago, is facing a mountain of tasks to resolve.
The sudden controversy over hateful expression has escalated from a boycott of specific works to a platform-wide boycott. The issue began when questions were raised that an amateur webtoon titled 'Isekai Pongpongnam,' which passed the first round of a contest, dealt with misogynistic themes. The argument is that Naver Webtoon overlooked material involving 'Pongpongnam'—a term with sexual connotations and prejudices implying women exploit naive men for financial gain—in its review process. Criticism also arose regarding a marketing campaign that turned the 'boycott' keyword into a meme, further worsening public opinion. Although Naver Webtoon apologized, stating that it was a "mistake in operating an ad campaign where previously created and released content was re-published," the boycott sentiment is actually spreading, with over 200 webtoon authors—the very victims of the boycott—issuing a statement demanding a full apology and clarification.
There is also the long-standing challenge of moving out of a 'deficit state with growth potential' to expand profitability. While Webtoon Entertainment's stock price rose nearly 10% on the first day of listing, it is now half its IPO price. Webtoon Entertainment also showed sluggish performance in revenue growth in the second quarter of this year, its first financial report since listing.
The fact that employees are seeing losses upon exercising stock options is fundamentally due to the low stock price, and improving profitability seems essential to recovering the stock price and resolving the labor-management conflict. Webtoon Entertainment recorded a total net loss of $144.8 million (approximately 200 billion KRW) last year, and as of the end of 2023, the accumulated deficit is $363.3 million (approximately 500 billion KRW). Beyond diversifying the business model, the consensus is that the key lies in content capability: reducing mass-produced content, improving work quality, and strengthening intellectual property (IP) competitiveness.