WEBVTT - ICYMI: Webtoon Expands Reach With Disney Pact

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News. You're listening to Bloomberg

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<v Speaker 1>Business Week with Carol Masser and Tim Stenoveek on Bloomberg Radio.

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<v Speaker 1>Shares of Webtoon Entertainment. Remember this, We talked about this

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<v Speaker 1>on the Close just last week. Searched eighty one percent

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<v Speaker 1>last Wednesday. It was its best day since going public

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<v Speaker 1>last year. You remember this. They announced a partnership with

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<v Speaker 1>Walt Disney. It's going to bring characters such as Marvel,

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<v Speaker 1>Spider Man and Luke Skywalker of Star Wars to its platform.

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<v Speaker 1>The announcement also came as Webtoon reported quarterly results that

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<v Speaker 1>beat analyst expectations that helped fuel the rally last week

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<v Speaker 1>as well. We got with us David Lee. He's CFO

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<v Speaker 1>and COO of the one point nine billion dollar market

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<v Speaker 1>cap company. It calls itself a quote global storytelling platform

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<v Speaker 1>that enables creators and users to discover, create, and share stories.

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<v Speaker 1>David joins us from our Los Angeles bureau. Also with

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<v Speaker 1>us is Nina Trentman. She's Bloomberg News Senior editor. She

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<v Speaker 1>writes the BLOOMBERGSFO Briefing newsletter. She joins us here in

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<v Speaker 1>the studio. Check out her newsletter at Bloomberg dot com

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<v Speaker 1>slash CFO Briefing David will be featured in an upcoming

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<v Speaker 1>edition of that. David, welcome. Good to talk to you again.

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<v Speaker 1>I think last time we spoke you were CFO and

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<v Speaker 1>Coo at Impossible Foods. It was a previous lifetime. You're

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<v Speaker 1>at webtoon now. I think though, at Webtune, a lot

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<v Speaker 1>of people maybe who don't have kids of a certain age,

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<v Speaker 1>maybe they're too young, maybe they're too old, might not

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<v Speaker 1>be familiar with the platform. What is it so?

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<v Speaker 2>Webtune is as you say, it's a global storytelling platform.

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<v Speaker 2>And while many of us may not have heard it ourselves,

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<v Speaker 2>I bet our gen Z kids and friends have. In fact,

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<v Speaker 2>the majority of our one hundred and fifty plus million

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<v Speaker 2>monthly active users are exactly in that demographic. They spend

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<v Speaker 2>thirty minutes a day plus enjoying news stories from this

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<v Speaker 2>network of twenty four million creators globally that get to

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<v Speaker 2>write great webcomic and web novel stories on our platform.

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<v Speaker 2>I bet you've seen a movie or two though, that

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<v Speaker 2>you didn't realize started as a web tune.

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<v Speaker 3>David, thanks for joining us, just wondering actually in terms

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<v Speaker 3>of the spending on the platform. One of the things

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<v Speaker 3>that we've been wondering about at CFO briefing recently is this,

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<v Speaker 3>what is the consumer doing and how are consumers responding

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<v Speaker 3>to all the different news that we're hearing on tariffs,

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<v Speaker 3>on what's going on in DC. I'm wondering, are you

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<v Speaker 3>seeing any changes of spending amongst your consumers.

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<v Speaker 2>Well, web Tune's very fortunate. You know, our consumers love

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<v Speaker 2>a good story. They love a good story and good

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<v Speaker 2>times and bad times, and increasingly they love a good

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<v Speaker 2>story independent of the language or the country that the

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<v Speaker 2>story came out of. We have examples of nine hundred adaptations,

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<v Speaker 2>one hundred rich film, movie and TV series that came

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<v Speaker 2>from all over the world because in good times and

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<v Speaker 2>bad people want to tuck into a story from an

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<v Speaker 2>unexpected source. And our privilege is to allow these twenty

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<v Speaker 2>four million creators. By the way, most of them who

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<v Speaker 2>have full time jobs. They're kindergarten teachers, they're plumbers. They're

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<v Speaker 2>people who are hard at work who get a chance

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<v Speaker 2>to break through and maybe even have a great movie

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<v Speaker 2>like we saw with Sidelined the Quarterback and Me on Tuby.

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<v Speaker 2>So so far we've been immune from some of the

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<v Speaker 2>news that you carry every day because our product is

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<v Speaker 2>great storytelling and consumers seem to still love it.

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<v Speaker 3>And it's good to hear. I'm just wondering. Tim just

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<v Speaker 3>mentioned the Disney partnership. I'm curious for you as a CFO,

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<v Speaker 3>how does it change the financial trajectory of the company.

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<v Speaker 2>Well, the Disney collaboration, I think is pivotal. What it

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<v Speaker 2>indicates to me is that we are not niche. We

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<v Speaker 2>are mainstream for our gen Z consumers today here in

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<v Speaker 2>the US, the largest market that we see ahead of us.

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<v Speaker 2>It also means that a wonderful company is comfortable allowing

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<v Speaker 2>us to take their iconic stories. You know, the Amazing

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<v Speaker 2>Spider Man's coming out soon, and it's coming out as

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<v Speaker 2>a webcomic in our platform. Disney recently said in an article,

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<v Speaker 2>they said, you know, we looked at a lot and

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<v Speaker 2>they're the leader, and we feel grateful to be able

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<v Speaker 2>to bring their stories to life. And frankly, we're going

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<v Speaker 2>to bring alternative endings, background characters to the forefront. We're

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<v Speaker 2>going to write original stories with Disney because our powerhouse

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<v Speaker 2>of creators can allow a story that may have been

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<v Speaker 2>written years ago to be really fresh for the gen

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<v Speaker 2>Z consumers on our platform.

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<v Speaker 4>How important is it to really be working with such

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<v Speaker 4>an established company like Walt Disney and just getting that

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<v Speaker 4>visibility through this partnership.

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<v Speaker 2>I think it's critical because, frankly, the biggest challenge we

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<v Speaker 2>have is that while our gen Z consumers here in

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<v Speaker 2>the US know us, love us, and spend thirty to

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<v Speaker 2>sixty minutes every day on us, a lot of investors,

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<v Speaker 2>a lot of corporations, a lot of your audience has

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<v Speaker 2>never heard of webtom even though we went public a

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<v Speaker 2>little over a year ago. I think part of the

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<v Speaker 2>movement that you may have seen in the company stock

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<v Speaker 2>is simply awareness that Disney is recognizing that webtoon is

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<v Speaker 2>going mainstream here in the US, that we're a great

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<v Speaker 2>source of fresh content, but we're the powerful leader of

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<v Speaker 2>the category where we just released short form video on

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<v Speaker 2>Monday of this week. You know, these short five minute

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<v Speaker 2>videos crafted out of proven stories on our platform is

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<v Speaker 2>exactly what gen Z wants, and so for us, it's

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<v Speaker 2>really important to bring awareness to investors and companies about

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<v Speaker 2>what gen Z consumers here already know, which is that

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<v Speaker 2>we're a great source of storytelling.

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<v Speaker 1>Should investors expect more partnerships similar to the one that

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<v Speaker 1>was announced last week with Disney.

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<v Speaker 2>Well, I think if you look at what we've talked

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<v Speaker 2>about in the last couple of quarters, I mean just

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<v Speaker 2>the quarter released prior we talked about our partnership with IDW,

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<v Speaker 2>We've talked about bringing Sonic, The Hedgehog and Godzilla and

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<v Speaker 2>other great platforms to our content and our storytelling. We

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<v Speaker 2>also are constantly seeing things hit the main screens. You know,

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<v Speaker 2>just last week we saw a major movie release called

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<v Speaker 2>My Daughter Is a Zombie. It just got released in

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<v Speaker 2>the last couple of weeks here in the US, but

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<v Speaker 2>it's one of the number one best selling releases in

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<v Speaker 2>Cree already that came from us. So increasingly you're going

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<v Speaker 2>to see as partner but also create original content on

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<v Speaker 2>our platform and on screens coming to you, whether it's Amazon,

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<v Speaker 2>to be Netflix, or even a movie theater more and more.

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<v Speaker 3>David, I'm wondering, how are you thinking about profitability on

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<v Speaker 3>the back of the partnership with Disney. We talked about

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<v Speaker 3>this before. I'm wondering, does that change how you thinking

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<v Speaker 3>about that?

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<v Speaker 2>Well, one of the great things about our collaboration with

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<v Speaker 2>Disney is it's notable what I did not release. I

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<v Speaker 2>did not release OWNERUS upfront financial terms. I didn't even

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<v Speaker 2>talk about it as being different than the great way

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<v Speaker 2>in which we partner with franchises previously. And we posted

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<v Speaker 2>in the quarter a positive nine point seven million j Justinivada,

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<v Speaker 2>which I think it shows that our cash balance that

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<v Speaker 2>was given to us US from the IPO on Nastac

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<v Speaker 2>little over a year ago is growing. So even as

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<v Speaker 2>we grow our webcomic APPEU here in the US and

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<v Speaker 2>in English speaking locales nineteen percent you're on year for

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<v Speaker 2>the last two quarters, we're still building cash. That doesn't

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<v Speaker 2>mean we hoard it. We love the ability to create

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<v Speaker 2>shareholder value, but we're very careful to return shareholder value

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<v Speaker 2>very prudently. We believe in self reliance. That's why we

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<v Speaker 2>went public and right now there is no need for

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<v Speaker 2>me to disclose any different set of financial conditions other

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<v Speaker 2>than excitement. Strategically for the Disney collaboration.

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<v Speaker 1>We're speaking with David Lee, CFO and COO of the

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<v Speaker 1>one point nine billion dollar market cap webtun Also with

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<v Speaker 1>US is Nina Trattan and Bloomberg News senior editor. She

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<v Speaker 1>writes the Bloomberg CFO briefing newsletter.

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<v Speaker 3>Yeah. Well, unfortunately running out of time, David, But maybe

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<v Speaker 3>one question in terms of the customer group that you

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<v Speaker 3>mostly tracked at webtoon, you mentioned gen Z's to us.

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<v Speaker 3>I'm wondering, how do you keep track of that specific

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<v Speaker 3>customer group.

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<v Speaker 2>Well, it's funny this generation of consumers, the younger generation

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<v Speaker 2>gen Z and jen Alpha, they want to discover on

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<v Speaker 2>their own content. So we're very data rich and we

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<v Speaker 2>want to make sure we have the best sources stories,

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<v Speaker 2>and we have one hundred and twenty thousand stories that

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<v Speaker 2>arrive every single day to our platform. But because we're

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<v Speaker 2>so data driven, we can tell we call her Mattie

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<v Speaker 2>our target consumer. We know what Maddie is reading thirty

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<v Speaker 2>minutes every day, we know what chapter of what story

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<v Speaker 2>she's reading, and so it's easier for us to use

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<v Speaker 2>our technology to ensure she finds her next story, which

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<v Speaker 2>is part of the reason why we've revamped our product

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<v Speaker 2>here in the US. Importantly, as Maddie grows older, we

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<v Speaker 2>know from a longer experience elsewhere that she'll like different genres.

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<v Speaker 2>And the great thing about webtoon is we can offer

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<v Speaker 2>every genre because it comes from twenty four million creators

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<v Speaker 2>that we've cultivated over the last over ten years. So

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<v Speaker 2>she Maddie will grow old with us even as she

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<v Speaker 2>changes her tastes. We love her to finish in complete

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<v Speaker 2>stories because we have so many more coming as an

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<v Speaker 2>ever great platform every day.

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<v Speaker 1>And she's not a zombie. I just want to make sure.

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<v Speaker 2>I would never characterize Maddie as a.

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<v Speaker 1>Zombokay, she said, my daughter talk about Mattie. I just

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<v Speaker 1>want to make sure we're.

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<v Speaker 4>Yeah, no, okay, zombie there, Okay, sorry to go ahead. Well, David,

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<v Speaker 4>I did want to ask you about how you all

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<v Speaker 4>are thinking about AI. Of course, we know this has

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<v Speaker 4>been a really big topic this year as people think

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<v Speaker 4>about how we're using AI spend for some of these

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<v Speaker 4>large companies. So how are you all integrating AI into

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<v Speaker 4>your platform?

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<v Speaker 2>You know, it's interesting. Web Tunes started from a parent

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<v Speaker 2>called Neighbor, which is a tech powerhouse, and we use

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<v Speaker 2>our technology, including our AI which we have a lot

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<v Speaker 2>of actually to protect the human creator. We protect them

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<v Speaker 2>by fighting piracy arguably better than a lot of other

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<v Speaker 2>bigger consumer tech platforms. I know. We allow consumers to

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<v Speaker 2>find these one hundred and twenty thousand stories I mentioned

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<v Speaker 2>that come every day. We help them find the stories

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<v Speaker 2>they want using AI and technology. We may be the

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<v Speaker 2>best untold story about AI promoting human creativity, generating returns

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<v Speaker 2>for our human creators, protecting them in a way that

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<v Speaker 2>I don't think is oftentimes on your network or in

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<v Speaker 2>the press. And we're really excited to have a business model.

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<v Speaker 2>You know, we've shared two point eight billion dollars with

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<v Speaker 2>our creators from twenty seventeen to twenty twenty three because

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<v Speaker 2>from the very beginning, our founder said, we will build

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<v Speaker 2>a global network of people who can fair share in

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<v Speaker 2>the success. Neither of us know how big is yet,

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<v Speaker 2>and that allows an amateur creator somewhere in the world

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<v Speaker 2>with the dream of being a storyteller to change their

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<v Speaker 2>lives and contribute to the platform that we've built. So

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<v Speaker 2>I feel really good about our you SURVEYI I'm held

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<v Speaker 2>accountable by my teenage daughters, who are also consumers, and

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<v Speaker 2>this is one case where I think tech is at

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<v Speaker 2>work for human good.

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<v Speaker 1>David, good to see you, Thanks for joining us on

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<v Speaker 1>Bloomberg BusinessWeek Daily for the CFO Brief. And that's David Lee,

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<v Speaker 1>CFO and COO of webtoon. Also a big thank you

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<v Speaker 1>to Nina Trevman. She's bloomberg new senior editor. She writes

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<v Speaker 1>the Bloomberg c FO Briefing newsletter. You can sign up

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<v Speaker 1>for it at Bloomberg dot com slash CFO Dash Briefing