This week, Netflix co-CEO Ted Sarandos will visit South Korea, where hits like “Squid Game” and “The Glory” have made the entertainment business famous worldwide, but local market concerns are mounting.
Netflix invested $2.5 billion in local content after South Korea’s top dramas became synonymous with the country’s cultural exports.
Industry sources said Sarandos would meet with film students in Seoul on Tuesday during his first visit as co-CEO. He will discuss video streaming with Prime Minister Han Duck-soo on Thursday.
With 60% of global Netflix (NFLX.O) subscribers watching at least one Korean show last year, calls are mounting for the government to boost locally sponsored projects and secure content rights.
Last week, the government announced intentions to provide 500 billion won ($390.09 million) to help local streaming firms compete with Netflix amid rising production costs.
“The media and content industry will thrive when various platforms compete instead of being dominated by only a few, which will benefit both creators and consumers,” said Heo Seung, public affairs director of the South Korean streaming platform Watcha.
The Korea Economic Research Institute reported that South Korea exported $13 billion in content, including video games, music, and broadcasting in 2022, surpassing electric vehicle and rechargeable battery sales.
South Korea’s success is due to the “Netflix Effect,” which makes performers and filmmakers famous overnight.
President Yoon Suk Yeol called Netflix’s $2.5 billion investment a “big opportunity” for South Korea and Netflix. Netflix outperforms Tving, Wavve, and Watcha in South Korea.
Having lost 119 billion won in 2022, while the U.S. corporation made 14.28 billion won.
Mobile Index reported Netflix’s 38.2% market share in South Korea last year, surpassing Tving’s 13.1%. South Korea does not require international streaming providers to invest in local content like the EU.
Some Korean legislators want Netflix to give creators more for successful projects. Netflix stated it compensates local creators equitably during production, regardless of show performance.
“Compensation is an important part of that, but so is the creative expression our local team supports, along with the global audience reach of our service,” a Netflix representative said in an email.
Netflix took a gamble on creators when others didn’t. In 2021, “Squid Game” creator Hwang Dong-hyuk revealed Netflix picked to acquire the series after many rejections.
“King of Clones” director Aditya Thayi told Reuters Netflix is “evening the playing field for Asian filmmakers.”
The Netflix UK-commissioned project focuses on South Korean genetic cloning fraud and uses broadcaster archive clips. Thayi said independent producers without funding could not afford such footage, costing up to $40,000.
Sejong University professor Lim Jong-soo said Netflix had provided South Korean producers additional opportunities, but the government might help by protecting IP rights for creators. “The government needs a system to return excess profits to South Korean creators.”
