South Korea's webtoon industry is undergoing a major transformation as leading platforms embrace short-form video content to combat declining readership and stagnating growth. The country's digital comic giants, Naver and Kakao, are launching TikTok-style features in response to changing consumer habits and increased competition from social media platforms.

Naver Webtoon announced last week its plans to launch Cuts, a revolutionary short-form animation platform, in September. This new service will convert traditional webtoons into bite-sized animated clips, featuring both adapted content from existing series and original material created specifically for the format. The platform will welcome content from professional artists as well as everyday users, democratizing the creation process.

This announcement builds on Naver's earlier experimentation with short-form content. In May, the company introduced a "New & Hot" feature on its North American platform, offering trailer-style highlights of popular webtoon series. However, Cuts represents a significant evolution from this highlight reel service, as it will enable users to create entirely new content alongside clips adapted from existing webtoons.

Kakao Entertainment has already established itself as a pioneer in this space, having launched its AI-powered short-form tool, Helix Shorts, in April. This innovative service utilizes artificial intelligence to transform traditional webtoons into engaging 40-second video clips. The adoption has been remarkable, with more than 40 percent of all short-form content on Kakao's Kakao Page platform now being produced using Helix Shorts technology.

The strategic shift toward short-form content comes as platforms desperately seek to attract younger audiences who are increasingly gravitating toward this medium. According to the Korea Communications Commission, 70.7 percent of South Koreans reported viewing short-form content in the past year, representing a substantial 12.6 percentage point increase from 2022. Among smartphone video content consumption, short-form content has claimed the dominant position at 41.8 percent.

Demographic data reveals that daily short-form viewers skew significantly younger, with 40.5 percent being teenagers, 34.7 percent in their twenties, and 30.5 percent in their thirties. This trend represents a critical challenge for traditional webtoon platforms that have historically relied on longer-form storytelling formats.

The pivot to short-form content is also occurring against the backdrop of significant challenges facing South Korea's webtoon industry, including stagnating growth and notable setbacks in overseas markets. Webtoon Entertainment, which serves as Naver Webtoon's US-listed parent company, reported substantial operating losses of $125 million last year. The company's stock performance has been disappointing, trading at $9.34 as of Tuesday, a dramatic decline from its post-initial public offering high of $26.00 following its June 2024 stock market debut.

The international expansion struggles have been particularly pronounced, with major industry players retreating from key global markets. NHN has completely shuttered its webtoon services in the United States, Britain, and France, while Kakao has pulled out of Europe, Indonesia, Taiwan, and China, signaling the difficulties these companies face in competing globally.

Compounding these challenges, data indicates that readers are spending significantly less time on traditional webtoon applications. According to local analytics firm MobileIndex, Naver Webtoon users logged an average of 426 minutes in June, representing a notable decrease from 481 minutes in June 2024. Kakao Webtoon experienced an even steeper decline, falling from 153 minutes to 129 minutes during the same period.

"It's fair to say that YouTube Shorts, TikTok and Instagram Reels are webtoons' biggest competitors," explained a Korea Creative Content Agency official who requested anonymity. "They share similar service styles and reader approaches. As webtoon subscribers migrate to short-form, it's become a threat to industry growth."

Industry analysts view this strategic move as intelligent positioning, representing an attempt to lower entry barriers for new readers while adapting to the very content formats that are drawing audiences away from traditional webtoons. The companies are marketing their new features as gateway experiences to their original intellectual property. While a sprawling webtoon series with hundreds of episodes might intimidate newcomers, a compelling 40-second highlight reel could successfully hook potential readers.

"When we launched New & Hot in our North American platform in May, the goal was to lower the entry barrier for users," explained a Naver Webtoon official. "Short-form gives people an easy way in, especially with long-running series that can feel overwhelming to dive into."

The economic benefits of this transition are equally compelling. Creating derivative content from traditional webtoons typically involves extensive manual labor, from initial sketches through final coloring processes. Kakao claims its AI-powered Helix Shorts has revolutionized production efficiency, slashing production time from three weeks to just three hours while dramatically reducing costs from $1,800 to $55 per video.

"By automating key stages of production, we're making short-form content more accessible and efficient – not just for us, but for creators as well," stated a Kakao Entertainment official.

However, the industry's embrace of automation and viral content formats has generated significant concern among creators and fans who worry that this trend undermines the fundamental strengths of the webtoon medium. Many fear that AI-generated shorts could eventually replace human creators entirely, fundamentally altering the creative landscape.

"It's a slippery slope," warned a staff member at a major webtoon production company who requested anonymity. "Creators are already using AI-assisted tools in studios for coloring, background work, things like that. You can't really fight technology, but I do worry about where this leads. If AI can pump out promotional content, what's stopping companies from using it to generate an entire series?"

Despite these concerns, industry officials acknowledge the uncertainty while highlighting potential positive outcomes. The transition could create new opportunities for emerging creators who previously faced high barriers to entry in the traditional webtoon industry.

"We'll have to see how the service evolves," admitted a Naver Webtoon official. "However, there's a lot of excitement among animation students and indie creators. Until now, they'd mostly been preparing for long-form work, but we hope this opens up a whole new creative avenue for them."

The success of this strategic pivot will likely determine the future direction of South Korea's webtoon industry, as companies balance the need to attract younger audiences with preserving the artistic integrity and storytelling depth that made webtoons globally popular in the first place.