Netflix Announces $2.5 Billion Investment in Korean Content as K-Drama Popularity Increases
Netflix Inc. has pledged to support and nurture Korean showrunners and studios responsible for popular shows such as Squid Game, revealing its strategy for utilizing a portion of the $2.5 billion it has set aside for K-drama.
Co-CEO Ted Sarandos said Thursday that his company is running training programs for the next generation of writers and entertainers, both in front of and behind the camera. Netflix works with local organizations to identify and nurture young talent, he added.
These initiatives underscore how Korean shows like The Glory have emerged in recent years as a surprise for Netflix, which needs hot original content to differentiate itself from rivals like Walt Disney Co. and Apple Inc. About three-fifths of Netflix users have watched a Korean show, and viewing time for those shows has increased sixfold in just four years, he said. About 90 percent of viewers of Korean romance genre content come from overseas, Sarandos said.
In April, Netflix promised to spend 2.5 billion dollars in the country over the next four years. South Korea has already become one of Netflix’s biggest suppliers of TV shows and movies, fueling growth in global subscriptions as more consumers watch Korean dramas and reality series.
But the boom has drawn objections from local content creators who complain they haven’t had a proportionate share of the success, and ISPs who want Netflix to pay for the spike in online streaming activity.
Read more: Korea’s TV boom, with global streamers flocking to Seoul
Sarandos will visit Seoul for three days to discuss his investment plans with Korean production partners and government officials, including Prime Minister Han Duk-soo. The Netflix executive argued that extensive investment in creators and production should have far greater ripple effects in the economy than mere profit sharing.
“I wouldn’t say conflict, I would say there are opportunities as companies develop,” Sarandos said when asked about the concurrent dispute with Korean telecommunications service providers. “There is a clear and direct symbiotic relationship between creative companies like ours and the Internet industry.”
Netflix’s sales in Korea will grow 22 percent to 773.3 billion won ($600 million) in 2022 after the company raised the price of a monthly subscription, said Byun Jae-il, a key opposition lawmaker from the Science, Technology group. The Information, Broadcasting and Communications Committee of the National Assembly.
Although the price increase helped increase sales, the new policy hit the country’s subscriber base. The number of paying users fell 30 percent to 1.17 million in the fourth quarter from a year earlier, Byun said.
Netflix is also in a legal battle with SK Broadband over its network usage fees. The Internet service provider blames Netflix for the explosive growth of traffic and demands that the US company pay for the use of its network. Netflix is fighting in court, arguing that it has no obligation to pay network usage fees.
