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Korean contents

Netflix sweeps S.Korean content market

Jan 19, 2021 (Gmt+09:00)

Netflix original drama Kingdom was a global hit, driving K-zombie hype across the US and Europe.


Global streaming giant Netflix Inc. has become a leading platform in South Korea, boasting around 4.1 million paid subscribers and earning over 500 billion won ($453 million) in 2020, up 108% from the previous year, as the company is marking all-time highs for both its number of subscribers and subscription fees.

On Jan. 19, app and retail data provider Wiseapp reported that Korea residents spent 517.3 billion won on Netflix last year, with the December amount reaching a fresh monthly high of 58.7 billion won. 

The US-based over-the-top (OTT) service has solidified its position in Korea, just five years after its foray into the country. Netflix rolled out its Korea-based services in January 2016, with Chief Executive Reed Hastings saying that viewers would be able to enjoy movies and TV content everywhere in the country through its platform.

Hastings’ words have proven true. There were around 80,000 paid subscribers when the service first launched in Korea, but it has grown over fiftyfold over the past five years. Netflix's ability to offer content from 190 countries for just 12,000 won per month was effective, thanks to offering a rich selection of over 4,500 programs, as well as its convenience and accessibility.

Netflix's success has ushered in a big change for the Korean content industry,  now much farther reaching than in the past when just a few, select Korean programs would become popular in specific regions, still mostly in Asia.

But now, Korean content exposure has been magnified via Netflix, with a number of programs tasting global success.

DOMESTIC PRODUCTION COs EYE NETFLIX FOR PARTNERSHIPS

Korean domestic production companies are actively entering partnerships with Netflix, whereas the rise in OTT users has delivered a blow to conventional platforms such as movie theaters and broadcasting companies.

Since entering the Korean market, Netflix has invested a total of $700 million into its operations. Last year, it invested 333.1 billion won ($302 million), up 34.3% from the previous year, and 22 times the initial investment of 15 billion won. 

The company's biggest focus is producing original content in Korea. So far, Netflix has produced around 80 original content offerings over the past five years as part of its aggressive localization strategy.


The 2017 film Okja premiered on Netflix


In 2017, the company invested 60 billion won to produce Okja, a film made by the Oscar-winning director Bong Joon-ho. Netflix also produced the Korean zombie drama series Kingdom in 2019, followed by the apocalyptic series Sweet Home in 2020, investing 20 billion won and 30 billion won, respectively, in the two global hits. 

“We’ve been searching for collaboration opportunities with local creators and making investments to introduce a wide range of Korean content to the world,” said a Netflix official.

The company's efforts have paid off, as Kingdom set off K-zombie hype in the US and Europe, while Sweet Home has risen to third place in Netflix's global rankings. Meanwhile, the drama Crash Landing On You, which aired on Netflix, was the most viewed show on Netflix Japan in the summer of 2020.

TvN drama Crash Landing on You, the most-viewed series on Netflix Japan

As shows continue to thrive on Netflix, production companies see the platform as an opportunity to showcase programs to 190 countries simultaneously instead of exporting programs separately to each country.

Also, Netflix manages a sizable production cost, while allowing creative freedom for writers who can cover various topics such as zombies or monsters. It has been said that Netflix receives around 80 to 100 scenarios on a weekly basis.

CONVENTIONAL PLATFORMS WITHER AS STREAMING FLOURISHES

As streaming platforms gain steam in the Korean market, this has accelerated the decline of traditional platforms, such as movie theaters and broadcasting companies. More films are opting to premiere directly via Netflix instead of theaters. For example, the long-awaited Korean sci-fi film, Space Sweepers, will be unveiled on Netflix on Feb. 5.
 
The success of streaming platforms has given rise to a cord-cutting phenomenon where users have fewer televisions in the house and are unsubscribing from cable channels as they favor OTT services. Outsourcing production companies also prefer working with Netflix rather than broadcasting companies.

Netflix’s influence over the domestic content industry is expected to increase further. In September 2020, the company set up a separate corporate body in Korea, Netflix Entertainment Korea, and in March of this year, the company will launch a 15,867-square-meter production studio.

Write to Hee-kyung Kim at hkkim@hankyung.com

Danbee Lee edited this article.

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