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Netflix co-CEO Ted Sarandos speaks at a public forum on the streaming platform and the future of Korean content held at the Four Seasons Hotel in Seoul on June 23. (courtesy of Netflix)

With Korean production companies swarming to Netflix, more and more producers are expressing concern that the streaming service that has promoted the globalization of K-dramas is causing a boomerang effect of market stagnation.

“Due to the difficult times the domestic drama market has found itself in recently, more and more people are saying that all scripts are flocking to Netflix,” said Kim Ji-yeon, the CEO of First Man Studio, the production company behind “Squid Game,” during Thursday’s meeting between Netflix co-CEO Ted Sarandos and CEOs of domestic production companies.

With Netflix expanding its market dominance, terrestrial and cable TV networks as well as domestic streaming services have lost their competitive edge, leading to a vicious cycle in which production companies find it increasingly difficult to secure channels or platforms to air their shows.

“Netflix gets the first look at all scripts coming out right now,” an executive at a studio that produces both films and TV series shared. “Everyone is trying their hardest to be picked up by Netflix, so Netflix already has the upper hand in negotiations.”

Korean production companies are lining up behind Netflix because working with the streaming service can enable them to procure stable production budgets and prove beneficial for venturing into the global market. The production of blockbusters like “Narco-Saints” and “Black Knight,” which had a budget of 35 billion won and 25 billion won respectively (US$26.8 million and US$19 million), was possible thanks to Netflix’s support.

Moreover, because works picked up by Netflix most often become available for streaming globally, debuting on the platform can boost actors’ and directors’ international recognition.

“When their work gets released on Netflix, actors experience the almost-instantaneous response of gaining social media followers from across the world,” a noted film director commented. “As major foreign markets like the Chinese market are inaccessible, it is definitely true that many actors prefer their work to be released on Netflix rather than in theaters.”

But even if Netflix increases its investment in South Korea, the number of original works it can release is limited. Netflix produced only 25 original works from South Korea released last year, and only 28 this year. It is projected that the figure will shrink next year. Although more dramas are being produced ever since the success of “Squid Game,” there are fewer opportunities for their release. The industry estimates that while roughly 140 dramas were produced yearly in 2020 and 2021, the figure increased to around 160 in 2022.

Domestic streaming services like TVING and Wavve, whose profitability has declined due to stagnant subscriptions, have either slashed or terminated investments in original dramas. Disney is undergoing large-scale restructuring at its US headquarters and worldwide, while the majority of members of the Disney+ original programming team in South Korea have reportedly left the company.

“Other streaming channels, where we believed we could release our [works] if Netflix didn’t work out only a year or two ago, are no longer an option anymore,” shared a producer at a mid-sized production company. “With terrestrial TV networks allotting less airtime for dramas, dozens of works wallow in the distribution stage even after shooting has finished.”

During Thursday’s public forum, Sarandos assured that Netflix would “showcase diverse content from South Korea,” but some are voicing concern that the stronger Netflix’s monopolistic dominance becomes, the more that content diversity will suffer.

“If, just like right now, Netflix continues to remain preoccupied with producing original programming for which it possesses intellectual property rights, the Korean creative industry may end up becoming a supplier for a single platform,” commented film critic Kim Do-hoon. “While some big corporations like CJ Entertainment swept the Korean film market in the past, small production companies consistently put out original projects, ensuring diversity in Korean film and allowing its qualitative takeoff.”

By Kim Eun-hyoung, senior staff writer

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