[In-depth Report] Relying on Netflix to make money? The cruel reality unveiled in the Korean drama industry: it will eventually be strangled!
News broke last month that the Korean Original creation team of Disney + is suspected of disbanding, with not only the members of the team leaving Disney +, but also rumors that it is related to Disney's global layoffs. According to a report by the Korean media outlet Chosum, industry insiders have revealed that 15 members of the Korean original content development team at the international OTT platform, Disney+, have left the company, but the original content they produced is currently being retained. There has been no official statement regarding the disbandment of the South Korean Disney+ original content development team. However, external analysis suggests that the reason for the team's dissolution is due to its failure to achieve significant growth within South Korea. In fact, Disney+ began its services in South Korea on November 12, 2021. However, as of May this year, the number of active users of Disney+ in Korea is approximately 1.79 million, which is less than the same period's membership numbers of local OTT platforms such as tving (5.15 million), Coupang Play (4.31 million), and Wavve (3.92 million). However, if we look at Netflix, which is also an international OTT platform, it not only continues to lead the development of original content in Korea, but has even released many acclaimed and popular works. But recently, Korean media has conducted an in-depth analysis that the current development of Korean drama is facing a pressing crisis. According to a report by Korean media "Herald Economy," although K-Content (cultural content) has been very active internationally in recent years, Korean dramas, which are considered a major influence, are facing significant crises. The report points out current issues such as the escalating production costs of Korean dramas, over-reliance on Netflix, threats to domestic OTT platforms, and overall reduction in Korean drama production. Reports indicate that due to the recent linear rise in television production costs, from about 700 million Korean won per episode a few years ago to 1 billion or even 1.5 billion won per episode, not every production company can afford such large numbers under this kind of competition. Even after investing a significant amount of funds, no matter how successful the drama might be or how well-known the work becomes, it is still impossible to recoup the production costs. Thus, if one truly wants to gain abundant resources and break into Netflix, it seems that one will still have to line up and wait for now. There aren't many platforms that can bear such huge production costs, which has caused an imbalance in the entire industry. Although there are now many local OTTs rising in South Korea, the majority of the situation still relies on a single model, which is quite dangerous for the industry. A representative from a certain TV production company said, "The trend of Korean dramas constantly entering the global OTT platform, Netflix, is inevitable, and it is only a matter of time before this kills the circulation and diversity of the market and platform." Due to the issues that arose from the initial production costs, it was possible to produce TV dramas in the past without investing a high amount of production cost. However, it is feared that we have now reached the limit, creating a market cycle of "over-betting large amounts of money to gain substantial returns". For instance, the annual production of dramas used to be around 100-150, but due to a surge in production costs, it has reduced by at least half, leaving only about 70. According to statistics by the Korean media《Herald Economy》, even the 'mini-series' produced by the three major TV stations have deficits of several hundreds of millions or even billions. This phenomenon is also happening on broadcast television, such as the recent production of many popular shows by JTBC and tvN, two cable TV stations. Even if all advertisements are sold out during the drama broadcast time, they still face deficit. Therefore, many TV stations have started to fill in the gaps left by the dramas they could not recover by adding variety shows. As even large-scale variety shows do not cost as much to produce as dramas, channels like tvN have begun producing a range of variety shows, primarily those that can be exported overseas. Even though the industry behind Korean dramas may seem far removed from the audience, it's hard to imagine the many connections behind each successful work, from 8-episode mini series to regular 16-episode dramas, each having different impacts. (To be continued)
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