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[Korean Startup Interview] ‘Toonimotion’ Upcycles Webtoons into Animation, Addressing the Scarcity of OTT Content.

2023-10-03 6 min read

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[Korean Startup Interview] ‘Toonimotion’ Upcycles Webtoons into Animation, Addressing the Scarcity of OTT Content.

Reading Time: 6 minutes

Toonimotion, a South Korean startup producing short-form animations based on webtoons, is showcasing its webtoon original animation content on various domestic OTT platforms (KakaoPage, Naver Series On, Laftel).

Last year, it produced and released five webtoon works, each consisting of 50 episodes (about 250 episodes in short-form format), through OTT. The works have been translated with English and Chinese subtitles and are currently being exported, with another five webtoon animations in production this year.

Amidst the intensifying competition among OTT platforms, Toonimotion aims to address the content scarcity issue by producing short-form animations from webtoon originals for OTT supply. Using its proprietary RT technology to produce animations, Toonimotion ensures that the original webtoon’s image remains intact while maintaining TV-level video quality. With this technological prowess, it produces works about 8 times faster than the conventional production speed.

Toonimotion’s CEO, Jo Gyuseok, explained the reason behind the company’s inception, stating, “While running an overseas animation OEM company for 10 years, I saw many production houses closing down. I decided to produce animations ourselves, but it wasn’t successful. While contemplating whether to quit this line of work, the OTT market emerged. Realizing the abundance of great webtoons and our expertise in transforming stagnant content into video, I established Toonimotion.”

Holding numerous IP rights, Toonimotion has been receiving continuous attention from webtoon IP holders, given the success of their past works. Especially, with the MZ generation’s preference for short-form content and reels, the demand for Toonimotion’s produced content is expected to be high.

Compared to other production companies, Toonimotion has a competitive edge stemming from its ability to produce videos quickly and a team endowed with strong animation production skills. Based on these strengths, they are planning further business expansion. Drawing inspiration from several games based on webtoon originals, they are collaborating with game companies on joint development of games derived from webtoon originals and are generating 10% of the game revenue. They’re procuring webtoon IPs together with game companies, developing series, and creating games. They’re also diversifying their business by producing advertisements utilizing webtoons.

In pursuit of business expansion and securing their own IPs, CEO Jo Gyuseok stated, “The market for producing videos utilizing webtoons will grow even more. Seeing this potential, we urge investors to invest in us.”

He continued, “We are already producing content using webtoons, and this volume will only increase. Moreover, Toonimotion has high scalability. We possess the technology to instantly turn webtoon images into moving visuals, allowing collaborations across other sectors such as games and advertising. Most importantly, content knows no borders. Not just in Korea, but we’re also creating videos from webtoons in China, Vietnam, and Japan and receive many joint production requests. We’re confident in our capability to rapidly expand globally.”

Supplying Quality Content to OTT Platforms

The problem we aim to address is the content shortage faced by OTT platforms amidst intense competition.

OTT companies are consistently producing a range of content to retain consumers. As part of this, there’s a growing trend of producing movies, dramas, and animations using webtoons as the original source material.

However, only a very small fraction of webtoons are turned into visuals.

We identify numerous webtoons that haven’t been adapted into visual content and upscale them into animations. By doing this, we meet the demands of fiercely competitive OTT platforms and offer new revenue streams for webtoon creators.

Producing Webtoon-Based Short-Form Animations

Despite their popularity, webtoons that haven’t been adapted into visuals are produced as short-form series animations. By leveraging Toonimotion’s unique RT technology, we produce animations without compromising the original webtoon’s image quality. The quality of the visuals remains at TV standards, yet the production speed is 8 times faster than traditional methods. The finished animations are serviced on OTT platforms.

Securing Rich IP and Equipped for Content Production

Our competitors are animation producers who plan and produce content based on webtoons and IP holders who own webtoons and produce their own visual content.

Traditional animation companies produce animations in conventional ways, making it difficult for them to match our production speed. Standard animation companies, aiming for cinema releases or TV broadcasts, face higher production durations and costs, making it challenging for them to adapt rapidly in terms of business expansion. In contrast, we excel in producing games, advertisements, short forms, etc., which are very quick and scalable.

Toonimotion’s core team consists of experts with over 18 years of experience in animation, CG, and sound fields. Thus, with a small internal team, we can manage all processes from planning to the completion of an animation.

In this way, we produce webtoons as short-form series animations and offer them on OTT platforms. Throughout 2022, we have produced five webtoon works, each consisting of 50 episodes of animation series, which we began to serve on domestic OTT platforms. We have completed English and Chinese subtitle translations and are currently in the process of exporting. We are also in production of another five webtoons as animations this year, with a launch planned for early next year. The Korean platforms currently distributing our products include KakaoPage, Naver Series On, and Laftel. Starting from the end of this year, we also plan to expand to IPTV and VOD services.

$1.84 Billion Market, Aiming for 5% Market Share

The market we are targeting is the $1.84 billion segment dedicated to adult-focused animations within the $87.9 billion total OTT video market. We aim to capture a 5% share within this market.

Our primary target is the MZ generation, who exhibit lower resistance to purchasing content. They are a generation willing to invest readily in the content they desire and show a preference for shorter content lengths.

Rather than targeting traditional animation consumers, we focus on adults who enjoy a diverse range of entertaining visual content.

The service models for platform animations include AVOD, TVOD, and SVOD. AVOD stands for Advertising Video On Demand, where consumers can watch content after viewing ads, and the revenue model is based on advertising fees. TVOD is Transactional Video On Demand, where consumers purchase individual episodes or bundles.

For example, if the price for one episode of a webtoon is 300 won, the price for one episode of an animation is set between 400 to 500 won. SVOD stands for Subscription Video On Demand, where consumers pay a subscription fee and can watch all the content on that platform. The revenue is distributed based on the length of the video viewed. Each of these three methods is serviced differently depending on the platform’s characteristics, and the typical platform commission fees range from 20% to 50%.

Launching 5 Anime Series in 2 Years

Within just two years of starting this venture, we have launched five animation series works, and we are currently producing another five series this year. Among these, one work has recently secured a contract with the Chinese platform Bilibili and has also signed an export agreement with a Vietnamese OTT platform.

The works we have produced and launched have performed exceptionally well on Korean animation platforms, and the original webtoons have regained their popularity on the platforms.

Currently, many of Korea’s most influential webtoon partner companies are expressing their hope to co-produce their works with us and are requesting work reviews. The number of works under review for visual adaptation now exceeds 40.

Recently, we are also working on a public service advertising campaign using webtoon animations that will be displayed throughout Seoul’s entire subway system.

To date, our accumulated investment amount is 1.4 billion won, and we have won numerous awards in investment competitions held by national agencies and investment institutions in Korea.

Why we need to be funded!!

Firstly, the industry trend of producing content utilizing webtoons is projected to grow significantly in the future, and we are already pioneering this market.

Secondly, the potential for limitless business expansion. Animated content based on webtoons is not solely in demand by OTT platforms. Many companies seeking to produce webtoon-based content, such as games, movies, and dramas, are looking for firms like ours that can quickly validate markets and collaborate. We are already collaborating with gaming companies and advertising agencies.

Thirdly, webtoons and animated content are outstanding business items without borders. We possess robust technical skills to commercialize them and are rapidly securing partners. We have secured partners in Japan, Vietnam, and China, and we will capture market share faster than any competitor.

Lastly, we will change the landscape of the animation market with a unique approach of directly turning the image of a webtoon into an animated video. Using RT technology, we will create a successful convergence of webtoons and animations without the need for additional drawings, modeling, or storyboards.

[Korean Startup Interview]

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