When Netflix announced in April that it’s planning to spend $2.5 billion on Korean content across the next four years, on top of the more than $1 billion already spent since 2016, it made the world sit up and take notice.
In many ways, spending heavily in Korea is a no-brainer. Netflix has already had a global breakout Korean hit with Squid Game, followed by a slew of shows that may not have reached the same dizzy heights but are still international hits such as period zombie drama Kingdom, supernatural thriller Hellbound, Extraordinary Attorney Woo, about a female lawyer on the autism spectrum, revenge saga The Glory, and survival game show Physical: 100.
Of course, Netflix is not the only global streamer in the Korean content game, but it was arguably the first to spot its international potential. On a recent trip to Seoul, Netflix co-CEO Ted Sarandos said that 60% of its global members have sampled Korean content and that Korean series and films have reached the Netflix Top 10 in more than 90 countries.
Speaking from Netflix’s offices in Seoul during a wide-ranging exclusive interview, Netflix’s Korean chief Don Kang says Korean dramas have long been loved by other Asian countries, but it wasn’t until Netflix entered the game that they found a large audience beyond the region.
“One of the main reasons I decided to join Netflix was because I believed it was a platform that could bring Korean content to the world, especially with its localization abilities of dubbing and subbing in more than 30 languages,” says Kang, who joined the streamer from local studio CJ ENM in 2018 and now holds the role of Vice President of Content for Korea.
“I knew that Netflix’s marketing and publicity muscle was powerful and would enable global audiences to enjoy Korean content. At the same time, content doesn’t usually resonate globally if it’s not loved by its local audience, and Korean content is being very heavily consumed by Korean audiences.”
That international reach puts the $2.5 billion spend into context as Netflix’s K-content is unlikely to generate big profits from the Korean market alone. Netflix has not reported Korean subscriber numbers since saying it had 5 million members at the end of 2021, but local legislator Byun Jae-il recently pegged its annual Korean earnings at $580 million (KRW773.3BN) in 2022.
Korea appears to be Netflix’s biggest single territory spend within Asia. The streamer is also focused on Indian content, through a separate team headed by Monika Shergill; Japan, where content is headed by Kaata Sakamoto; Southeast Asia, in particular Thailand and Indonesia; and it is currently figuring out next moves in Chinese-language content out of Taiwan. But none of these territories appear to be getting the same budget as Korea.
Kang says that when it comes to deciding what to commission in Korea, greenlighting power resides with him and Minyoung Kim, who heads up Netflix’s Asia Pacific content outside of India: “Ted [Sarandos] and his team are there to provide great support, for which we’re always grateful, but we decide what to commission and who to work with,” adds Kang.
But what exactly are those billions being spent on? While Kang won’t be drawn on how spend breaks down between different content categories, he does say this sum is not just for production, but also covers training initiatives and operations. “Investment can stretch across anything from technology to actual manpower skills and expanding the talent pool,” Kang says. In terms of volume, he adds Netflix is currently producing around 15-20 Korean drama series a year, five or six movies, and is in the early stages of building out an unscripted slate. Then there’s also the content that is acquired rather than produced.
It’s a diverse slate. Netflix can claim with some authority that it greenlights content that local studios may not have taken a flier on — and has managed to find a wide audience for that content overseas. Before Netflix entered the market, it was mostly just Korea’s romantic dramas that travelled, especially among female audiences in the rest of Asia. But Squid Game, a high-concept survival drama, changed the perception of what form K-drama could take and now many different kinds of shows are travelling.
Kang points to The Glory, about a woman taking bloody revenge on the classmates who bullied her in high school, and Mask Girl, about an office worker who is insecure about her looks and becomes a masked internet personality by night, as recent examples of female-skewing shows that don’t fit the mould of traditional romance. “It’s not that shows like this never existed before, but because everything was provided through linear TV, there were structural limitations, which meant that creators weren’t able to fully unleash their creativity and their vision,” Kang says.
On the horizon are the hugely anticipated second season of Squid Game, again starring Lee Jung-jae and executive produced by Hwang Dong-hyuk; a second season of monster show Sweet Home; thriller Gyeongseong Creature and a slew of romantic dramas, including Castaway Diva, starring Extraordinary Attorney Woo’s Park Eun-bin.
Controversy
Inevitably however, this kind of success, volume and industry dominance has also drawn controversy. As Netflix has risen in Korea, the territory’s local broadcasters and streaming platforms, including TVing and Wavve, have struggled to compete, and the local industry has chafed at other ways in which the streamer has upended the domestic content ecosystem.
Producers grumble privately that all the hot talent is busy making shows for Netflix and the streamer’s heavy spend has driven up costs. Meanwhile, Netflix’s business model of retaining global IP and not paying residuals to creators has become a hot topic in Korea. While Netflix may not be the only culprit on non-payment of residuals, it’s definitely the most high-profile since Hwang spoke out about his lack of back-end compensation on Squid Game.
While most companies continue to take the money and work as producers for hire, at least one of Net-flix’s Korean production partners is pushing back against the ‘cost plus commission’ business model. Kang will not be drawn on whether there will be a second season of Extraordinary Attorney Woo, but then Netflix only owns the show outside Korea. Following its experiences with the streamer on Kingdom, Lee Sang-baek’s AStory, the production company behind Extraordinary Attorney Woo, decided to hang on to the show’s IP and licence it to Netflix for international.
Meanwhile, mirroring labor action in the U.S., several Korean guilds and unions are currently campaigning on the residuals issue, along with other industry working practices they claim are exploitative. Among recent developments, the Directors Guild of Korea (DGK) held a press conference to lobby the country’s legislature to revise the Copyright Act to make payment of residuals a legal obligation.
On the issue of residuals, Kang follows the standard Netflix line that it pays its creators well: “We’re working very hard to reward our creators fairly and at the most competitive level possible. We pay upfront sums that reflect what could be calculated as residuals, which in most cases lead to compensation at a higher level than if residuals were paid.” He adds that payment of residuals is an industry wide issue, encompassing both local studios and other global streamers, “so I’m not sure it’s the best way forward for Netflix to act unilaterally and try to negotiate with certain groups.”
It doesn’t help that Netflix doesn’t face the same level of competition from other global streamers in Korea that it does in some other Asian territories. Disney+ has just scored its first major Korean hit with superhero series Moving, but the streamer is estimated to have only 10 percent of the volume of Korean subscribers as Netflix. Prime Video got to Korea late, after initially focusing on Japan and India, so now mostly acquires content for distribution outside Korea. Apple TV+ has so far made one Korean show, Kim Jee-woon’s Dr. Brain, and Paramount+ is working with local streamer TVing on shows including A Bloody Lucky Day, Queen Woo and Bargain (see Hot Ones). But nobody has anywhere close to Netflix’s volume of Korean content.
Addressing the issue of driving up costs, Kang says it’s an inevitable consequence of “rewarding creators fairly,” but that the issue is misunderstood. He explains that Netflix is not inflating per-episode cost but ensures that its production partners on a 6-10 episode series are compensated in line with what they would expect under the traditional ad-driven model of a 20-episode show.
“Having said that, we do need to increase certain costs, for example investing more in pre-production and post-production,” Kang says. “That investment is crucial for effective storytelling and for bringing Korean content to a global audience.”
Further afield, there has been speculation that Korean shows are being lined up to fill the gap left in North American viewing schedules by the WGA and SAG-AFTRA strikes. Before the strikes started, Sarandos said he hoped it wouldn’t come to that — but that Netflix’s global production meant that members would not be without options. “We have a large base of upcoming shows and films from around the world,” Sarandos said.
It could be argued that, just because 60% of Netflix subscribers have sampled Korean shows, it doesn’t mean the whole world is going to switch from English to Korean content. K-drama may be popular but is still an acquired taste. However, where it is filling a gap is in other parts of Asia — a recent report from Media Partners Asia found that Korean content accounted for 50% of SVoD viewership across the continent in the first half of 2023. It’s probably not the U.S. that needs to worry about being overrun by Netflix’s Korean output.”
Films and unscripted: what Kang wants
So far, it’s only Netflix’s Korean drama series that are dominating in terms of international reach and volume. There are other arenas in which Netflix still has room for growth — but Kang says he is working on that.
Two of the biggest pushes will come in unscripted content and films. Netflix has already tasted international success for reality shows with Physical: 100, a competition survival series that topped the streamer’s Global Non-English chart for two weeks, and dating show Single’s Inferno, which became the first Korean unscripted show to debut on the Global Non-English Top 10.
Kang says that prior to Netflix’s localization efforts, it was unusual for Korean unscripted shows to travel — although Korean formats such as King of Mask Singer (aka The Masked Singer) have obviously sold well. “We wanted to take on the challenge of unscripted because Korea makes great shows and we see it as fulfilling that desire for something more light-hearted, which sitcoms once had,” he says.
The streamer’s current Korean unscripted slate includes zombie reality show Zombieverse, released in August; mind game survival show The Devil’s Plan, which launched September 26; and a third season of Single’s Inferno, due before the end of the year. Presumably, some of these formats can also be remade in other territories in different languages, although Kang says he’s currently more excited by unscripted spin-offs of drama series, such as the UK-produced Squid Game: The Challenge, which debuts in November. “If it’s fun, we can definitely do more of those,” he says.
Film is another area that Kang sees as a potential area for expansion: “We see a lot of opportunity with film and we’re ramping up our slate, with around five or six original films per year, and then even more through licensing.”
Netflix launched thriller Kill Boksoon, starring Jeon Do-yeon, at this year’s Berlin Film Festival and has three films premiering at Busan — thrillers Believer 2 and Ballerina, and documentary Yellow Door: ‘90s Lo-fi Film Club, about the search for Bong Joon-ho’s unreleased first short film. Other upcoming film projects include historical drama War and Revolt, which is being co-scripted by Park Chan-wook and set to star Gang Dong-won and Park Jeong-min.
Although films haven’t achieved the same traction globally as series so far, a phenomenon common to most territories, Kang says they are still reaching a much wider audience than they would through traditional theatrical release. “Korean film has a strong reputation on the global stage, and Netflix is now one of the ways audiences are accessing and enjoying films. Our marketing and publicity teams have a truly global reach, but we also see festivals as an important way to celebrate these stories and build buzz around them.”
Meanwhile, the drama series pipeline is still pumping. Viewers will have to wait until next year for Squid Game Season 2, but will get the likes of Sweet Home Season 2 and and K-pop romcom Doona! in 2023. With its deep pockets and first mover advantage, the K-wave as driven by Netflix is unlikely to slow down any time soon.