{"id":2201120,"date":"2023-05-23T19:13:30","date_gmt":"2023-05-23T10:13:30","guid":{"rendered":"https:\/\/koreapro.org\/?p=2201120"},"modified":"2023-05-24T18:21:43","modified_gmt":"2023-05-24T09:21:43","slug":"netflix-and-korea-a-complex-tale-of-investment-success-and-controversy","status":"publish","type":"post","link":"https:\/\/koreapro.org\/2023\/05\/netflix-and-korea-a-complex-tale-of-investment-success-and-controversy\/","title":{"rendered":"Netflix and Korea: A complex tale of investment, success and controversy"},"content":{"rendered":"

The relationship between Korea and America\u2019s content creators, notably the streaming giant Netflix, has become a catalyst for creative content and amplified global exposure for Korean entertainment. But this relationship is also complex and fraught with tension.<\/span><\/p>\n

Some of the concerns that the Korean entertainment industry has raised are worries over potential exploitation and intellectual property due to its partnerships with American companies. Despite these concerns, this relationship will continue to evolve and potentially reshape the Korean and global film and television industries.<\/span><\/p>\n

To appreciate the current dynamic, only six years ago, South Korea\u2019s leading cinema chains, including the country\u2019s largest exhibitor, CJ CGV, refused to screen Bong Joon-ho\u2019s \u201cOkja.\u201d The reason cited was Netflix\u2019s decision to stream the movie on its platform the same day as the movie\u2019s theatrical release, a move they argued would \u201c<\/span>disrupt<\/span><\/a>\u201d the industry\u2019s ecosystem.<\/span><\/p>\n

AN AMBIVALENT RELATIONSHIP<\/b><\/p>\n

Despite facing restrictions on screening, \u201cOkja\u201d premiered at one of Seoul\u2019s oldest cinemas, Daehan Cinema, which is located in the central Seoul district of Chungmuro \u2014 the former home of Korea\u2019s film industry. Even so, over 300,000 tickets were <\/span>sold<\/span><\/a> across only 10% of Korea\u2019s screens, even as it was simultaneously available on Netflix.<\/span><\/p>\n

Netflix typically refrains from releasing detailed data on their films. However, \u201cOkja\u201d proved to be a rousing success, garnering substantial publicity for the streaming service and Bong Joon-ho. His next movie, \u201cParasite,\u201d propelled him to new heights, making cinematic history by winning the prestigious Palme d\u2019Or at Cannes and the Best Picture Academy Award.<\/span><\/p>\n

Given these achievements, Netflix\u2019s recent decision to invest an additional $2.5 billion into Korean content highlights the ambivalent yet intertwined relationship between Korea and America\u2019s content industries, a relationship marked by mutual benefits and challenges.<\/span><\/p>\n

In 1988, the Korean film industry objected to Hollywood studios establishing local offices in Seoul as Hollywood sought to distribute films directly in Korea. When \u201cFatal Attraction\u201d was released in Korean theaters, certain individuals in the local industry <\/span>released live snakes<\/span><\/a> in theaters as a form of protest.<\/span><\/p>\n

Although their plan didn\u2019t yield the intended results, it underscored the industry\u2019s apprehension about perceived encroachment from outsiders. Interestingly, the 1990s saw Korean studios setting up their own distribution subsidiaries and theater chains, leveraging the nationwide distribution network, an opportunity partly enabled by the changes that facilitated American studios\u2019 film distribution in Korea.<\/span><\/p>\n

The <\/span>protests<\/span><\/a> sparked in 2006 by the Roh Moo-hyun administration\u2019s decision to reduce the screen quota served as another indication of the resistance within the Korean film industry against Hollywood hegemony. Initially, Roh pledged to maintain the screen quota, which required theaters to screen domestic films 146 days a year, but later reneged on his pledge and halved the number to 73 days.<\/span><\/p>\n

But much has changed since then. Netflix\u2019s recent announcement to double down on its investment in Korean content, following an initial investment of <\/span>more than $1 billion<\/span><\/a> between 2015 and 2021, seems logical, given the global popularity of Korean films and shows.<\/span><\/p>\n

\"\"

Bong Joon-ho attends the Japan premiere of his film “Okja,” Nov. 22, 2017 | Image: Dick Thomas Johnson via Flickr<\/a> (CC BY 2.0<\/a>)<\/span><\/em><\/p><\/div>\n

NOT JUST SQUIDS<\/b><\/p>\n

Netflix\u2019s \u201cSquid Game\u201d has enjoyed unprecedented success, with <\/span>1.65 billion hours<\/span><\/a> viewed within its first 28 days, making it the most popular show on the streaming platform. <\/span>Bloomberg<\/span><\/i> reported that the show\u2019s valuation could potentially <\/span>exceed $900 million<\/span><\/a>.<\/span><\/p>\n

Yet the show\u2019s impact extends even further. Its popularity has catalyzed a broader global interest in Korean content. Shows like \u201cThe Extraordinary Attorney Woo\u201d and \u201cThe Glory\u201d are resonating with audiences, while even variety show \u201cPhysical 100\u201d has found its footing, <\/span>topping<\/span><\/a> Netflix\u2019s weekly viewership chart for non-English language TV shows for two weeks earlier this year.<\/span><\/p>\n

Netflix understood the potential of Korean content for local and international markets long before its competitors and its continued substantial investment is confirmation that its strategy is working. This strategic triumph is especially noteworthy given that other streaming services, including Disney Plus, <\/span>struggle<\/span><\/a> to be profitable.<\/span><\/p>\n

Netflix\u2019s success in bringing Korean content to a global audience has been significant, but it is not without controversy within the industry. There are <\/span>concerns<\/span><\/a> from within and outside that Korean production houses are being relegated to the role of subcontractors for the streaming giant.<\/span><\/p>\n

Netflix operates in some ways like a Korean studio, working closely with local production companies. For example, Netflix financed \u201cSquid Game,\u201d but Siren Pictures \u2014 a modest Korean production company with a handful of staff when production commenced \u2014 produced it.<\/span><\/p>\n

This new era of global reach for Korean content has brought intellectual property (IP) rights into sharp focus. In its contracts, Netflix typically retains all rights, which leaves local content creators unable to reap additional financial benefits from the success of a show or film. Instead, they receive upfront payments for their contributions, with no backend or profit participation.<\/span><\/p>\n

These issues are all the more disconcerting in light of recent box office struggles in Korea. Local films accounted for just <\/span>24.8%<\/span><\/a> of total admissions in March, indicating a decline in the industry.<\/span><\/p>\n

\"\"

Netflix’s “Squid Game” on a phone screen, Oct. 22, 2021 | Image: Marco Verch Professional Photographer via Flickr<\/a> (CC BY 2.0<\/a>)<\/span><\/em><\/p><\/div>\n

COMPLEX ECOSYSTEM<\/b><\/p>\n

Yet, the number of people watching Korean content on Netflix \u2014 accounting for six out of 10 subscribers \u2014 offers unprecedented visibility for the nation\u2019s industry and talent. This dynamic explains why the Yoon Suk-yeol administration seeks to <\/span>strengthen ties<\/span><\/a> with Netflix.<\/span><\/p>\n

In line with Yoon\u2019s recent <\/span>meeting<\/span><\/a> with Netflix co-CEO Ted Sarandos, the Korea Content Creative Agency (KOCCA) and the Korean Film Council (KOFIC) <\/span>signed<\/span><\/a> a memorandum of understanding (MOU) with Netflix to facilitate the production of mini-series, films and shows, while also fostering young talent.<\/span><\/p>\n

Over the past three decades, various administrations have supported and promoted Korean cinema and the broader content industry through government agencies and subsidies. The fact that Yoon\u2019s government has decided to support the industry via collaboration with Netflix, an American streaming giant, is particularly notable.<\/span><\/p>\n

It is understandable that Netflix\u2019s increasing prominence \u2014 compared to Korean studios that built and led the industry in the 2000s and 2010s \u2014 elicits concern from industry insiders.<\/span><\/p>\n

However, it is also important to recognize that established studios have made it increasingly difficult for younger and even more established filmmakers to have creative autonomy. For instance, these very studios <\/span>rejected<\/span><\/a> \u201cSquid Game\u201d before Netflix picked it up.<\/span><\/p>\n

Additionally, Korean cinema chains like CGV and Lotte, which also produce and distribute films, have <\/span>raised ticket prices<\/span><\/a>, thereby hampering the recovery of Korea\u2019s theatrical market. These circumstances have all worked to Netflix\u2019s advantage.<\/span><\/p>\n

Compounding the dynamic is the looming potential of a <\/span>protracted strike<\/span><\/a> by the Writers Guild of America that has already disrupted production in the U.S. However, Netflix will likely remain unaffected by such issues in Korea, where content creators seek to reach global audiences.<\/span><\/p>\n

Where this is all heading, however, remains uncertain.<\/span><\/p>\n

Edited by John Lee<\/span><\/i><\/p>\n

Business & Economy<\/span><\/a>Culture & Society<\/span><\/a><\/div>","protected":false},"excerpt":{"rendered":"

The relationship between Korea and America\u2019s content creators, notably the streaming giant Netflix, has become a catalyst for creative content and amplified global exposure for Korean entertainment. But this relationship is also complex and fraught with tension. 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