The script notes Sabrina Sherif receives from her producer contain just a few more details than usual. As a screenwriter for the TV adaptation of a hit young-adult story on Wattpad called The Numbered, Sherif has been getting input infused with data analysis gathered by the Canadian storytelling platform. One particular piece of information caught her eye: according to the insights, one side character named Tucker, who is part of the LGBTQ community, resonated with readers the most. 

“Fans were just talking about that story and how they felt seen and represented,” said Sherif in an interview with The Logic.

“I just knew from the get-go that we have to delve into this character and what their story is—and what does it feel like to come out and have your identity or gender expression within this new world that was built in the book?”

The Numbered is a fictional story written by author MJ Gary, set in a world where everyone’s level of perfection is scored out of 100. It is also one of many written stories that Wattpad has brought to screens by working with multinational film and TV production companies like Entertainment One.

About one year after South Korean internet conglomerate Naver agreed to acquire Wattpad for more than US$600 million, the Toronto-headquartered storytelling platform has been taking steps to realize its ambition of becoming the next global entertainment giant, like Walt Disney. While some experts say launching an entertainment studio is an uncertain and cost-intensive business, Wattpad’s executives contend that its storytelling platform’s data insights and loyal fan base will help it achieve long-term success. 

One of Naver’s first acts after acquiring Wattpad was to merge the studio divisions of the storytelling platform and the South Korean company’s digital-comic platform, Webtoon. With Naver investing US$100 million in production and development, Wattpad Webtoon Studios set its sights on bringing its stories to screens by working with external screenwriters and acting as a producer in the process. 

Daniel Tsai, a Toronto-based entertainment lawyer and law professor at the University of Toronto, said the transition to becoming a multi-platform entertainment company is risk-based and expensive. 

“You could have great scripts written by Hollywood or Oscar-winning writers, producers and actors, and still see it flop,” said Tsai, adding that many movies lose money. 

“Generally speaking, the odds of a movie becoming successful … the odds are stacked against that.” 

Although Wattpad started as a free-to-use platform for writers and readers, it launched a subscription tier called Wattpad Premium in 2017, initially in English-speaking countries. The service starts at US$5 per month and allows users to read stories without ads, among other features. In 2018, it started Paid Stories, allowing users to buy writers’ work using virtual coins. Both programs were eventually expanded to all regions in 2019. According to Wattpad, users spend nearly 30 million minutes each month reading stories in the paid program.  

With its trove of user data, Wattpad CEO Allen Lau said the company is able to take the guesswork out of the equation when it comes to greenlighting TV and film projects. 

“We are definitely not a traditional Hollywood studio,” said Lau in an interview with The Logic.

“The IPs [intellectual properties] that we bring to life on these streaming platforms, it’s not because I like it. It’s not because two people in the company say they love it. It’s because, in many cases, millions of people have already become the fanbase of that movie. With that built-in audience, the IP is already validated.”  

Additionally, Wattpad Webtoon Studios’ screenwriting process differs from the traditional Hollywood method—which he called “shooting in the dark” to a degree.

“We know not only which chapters are the most resonating, but we even know which paragraphs are the most important [part of the] story,” said Lau, adding that Wattpad gathers this data by analyzing the comments readers leave on stories. He said the platform sees over a million chapter uploads every day.

The platform’s insight into its loyal, diverse fanbase seems to be making waves with streaming networks that are hungry for original content as they seek to differentiate themselves in an increasingly competitive market. Most recently, the studio announced a partnership with ViacomCBS to adapt original content from Wattpad Webtoon Studios for the media company’s various properties, including Paramount Plus. 

Lau told The Logic the revenue potential of the ViacomCBS partnership is hard to quantify right now, given that Wattpad is “producing visual content down the road.” 

“All I can say is it would be very, very meaningful to us and will be very meaningful to them, as well,” said Lau.

Wattpad Webtoon Studios has over 100 film and TV projects in development around the world. 

Aron Levitz, who helped launch Wattpad’s studio in 2017, said in the earlier stages, it relied on partners with larger infrastructure, such as Netflix, to fund script development, and studios that had physical audio equipment to produce podcasts. But with Naver’s US$100-million investment, Wattpad has been able to expand its ability to develop in-house scripts and production.  

“In this [entertainment] world, you’re seeing major entertainment companies acquire the last 100 years of IP, whether it’s Amazon buying MGM or Discovery-Warner splitting out—that’s all about old IP,” Levitz, president of Wattpad Webtoon Studios, told The Logic. 

Levitz said audience engagement is the key to the future of the film industry. 

Still, Tsai said he thinks Wattpad lacks “the infrastructure and the distribution and the know-how of being a Disney or Netflix.”

“This may eventually change. But for the time being, there are some hurdles,” Tsai said. 

Naver, however, is bullish on what it’s unlocked from its low-cost reader-driven platforms, where Webtoon content has been used as an experiment ground for visual stories. Before Wattpad’s acquisition by Naver, 75 per cent of Webtoon’s sales were reportedly from in-app payments, while Wattpad generated more than 50 per cent of sales from ads. 

Naver’s global expansion plan appears to be making headway, with Webtoon’s users outside South Korea far outpacing those domestically with global streaming services’ adaptations helping to expand its market.

In South Korea, the estimated market size of streaming video on demand in 2020 was US$800 million, according to data from PitchBook. The median global estimate is expected to grow to US$687.2 billion in 2024.

Marvin Ryder, a business professor at McMaster University who teaches entrepreneurship, said Wattpad and Naver’s mission of becoming a global entertainment powerhouse is “very difficult, but not impossible.”

“It’s like watching the butterfly coming out of the cocoon,” Ryder said. “Will the butterfly spread its wings and fly, and it’ll be beautiful, or will it somehow get stuck in the cocoon and suffocate, and die? Unfortunately, both of those are possibilities because, at this moment, the butterfly is just trying to emerge from the cocoon. We’re just not sure which way it’s going to go.”