[Lezhin Comics] Statement Concerning Recent Allegations

Dear readers,

We would like to address and clarify recent allegations made against Lezhin Comics. Our goal is to shed some light on the situation by providing facts and dispelling rumors. We hope this statement will provide some insight to overseas readers as to what’s been happening domestically with Lezhin, and to assure readers that we are treating the creators fairly at Lezhin.


1. We heard creators are petitioning to get Lezhin audited for shady payment practices. What’s up with that?

Lezhin Entertainment Inc. is a corporation subject to external audits, and our financial results are publicly announced on the Financial Supervisory Service (http://dart.fss.or.kr) via our major shareholders. We also plan to publicly announce our financial results directly beginning 2018.

We are, and have been, faithfully fulfilling the terms of our legal agreements with creators. We have never intentionally withheld payment from any of our creators. Mistakes have been made (which will be further addressed below), which we have since corrected and settled with our creators.

Additionally, we have entered legal action against certain creators for defamation. We have appointed a law firm as our litigation representatives, and have recently filed a written accusation of two creators for defamation and slander with the Seoul Central District Court.

We made this decision in order to prevent the spreading of false information, and any further collateral damage to the company and our creators. Since the lawsuit is currently in progress, we are not at liberty to disclose further details. We thank you for your understanding.

Lezhin Entertainment will do the utmost to prosper together with our creators and all business partners.


2. You guys are overworking and beating the work out of the creators!

No, we are not! Let us explain.

During the publication of an ongoing comic, a creator’s earnings can be understood as either (1), the Minimum Guarantee (MG), or (2) the revenue share generated by the comic during a specific month (this is probably best understood as “royalties” from the number of Coins used to purchase an episode). We pay creators the larger share of the two. And no, creators are not penalized if the revenue shares of their comic does not meet the MG.

During hiatuses and after a series has finished, creators continue to earn revenue shares on a monthly basis. Lezhin Comics is a paid platform that relies purely on comic sales revenue (that means Coins!). There is no other revenue model such as ad sales.

Although Lezhin Comics is a paid platform, we provide our creators with livable Minimum Guarantees (MG) that are provided monthly during publication. We do this because we want creators to have a stable creative environment in which to work. Unlike many other online platforms, artists signed with Lezhin receive this amount regardless of sales.

The difference between a comic’s revenue and the MG is covered by Lezhin. Revenue is calculated monthly, meaning if an artist’s share of the revenue exceeds the MG, they receive that amount for the month regardless of the past sales of their comic.

Sales and revenue are calculated monthly. Creators are not penalized, financially or otherwise, when their comics do not perform well in past or current months. Lezhin Comics is the first paid comic platform to implement a policy like this. To this day, we remain a rare example in the industry.

Contractually, creators are freelance writers/artists that enter into publishing agreements with Lezhin Comics. They are not full-time employees subject to specific work hours. Lezhin does, however, offer signed creators many benefits that are reserved for full-time employees in South Korea.

For example, creators can receive health exams that include basic blood tests as well as liver-function examinations, sonography, and gynecological exams.

Additionally, we provide funeral assistance should the creator themselves, or the creator’s parents or offspring, pass away. We also present creators with celebratory wreaths at their weddings, and with New Year’s gifts. We plan to incorporate feedback from the creators on our current benefits plan to provide an even wider variety of benefits going forward.


3. We heard some creators didn’t receive payment for years.

Lezhin Comics is a global comic platform. We directly operate our Korean, English, and Japanese service. In contrast, our initial operations in China were not directly managed by the company – our comics were serialized in China through an overseas agency. Some creator revenue payments were deferred during this early process.

This was an unfortunate and unintentional mistake. All affected creators were paid in full during the fall of 2017. It was during this time that we offered our deepest apologies to the eight creators affected, alongside additional monetary compensation plans for the deferred payment.

We are working hard to improve our business processes and to prevent this from ever happening again. Our payment systems related to our Chinese operations have been revamped and are now being processed regularly, and in a timely manner.

Currently, our services host about 7,000 comics, from which over 700 titles are a result of entering direct publishing agreements with the creators. It would be unrealistic on our part to ignore the fact that as our company continues to grow, the probability of unintentional misunderstandings and miscommunication with our creators occurring is also likely to increase. In order to make sure this doesn’t happen, Lezhin will be forming a Creator Communication Team within the company. Our current Webtoon Team will focus on communicating with creators on any and all topics related to the creative aspect of comics. The Creator Communication Team will be responsible for supporting creators in all other aspects of their work.


 

We apologize to our readers for causing needless alarm over allegations which are not true.

As a company, we are going through tough times. Despite this, we will continue to stand by our philosophy that we must do what we can to ensure creators are provided an environment to tell the stories they want to tell, which will in turn provide readers an extensive library of high-quality stories.

We hope our readers will continue to support Lezhin and its creators in all of our future endeavors together, as we continue to improve on our shortcomings to create a better Lezhin experience for all.

 

Thank you.
Lezhin Comics.

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