Netflix sets aside $2.5B for Korean original content

Image credits: Netflix

back The Surprising Success of Squid Games in 2021, Netflix is ​​doubling down on South Korea as it looks to make another run in the country’s entertainment industry. The U.S. streaming giant said Tuesday it plans to invest $2.5 billion in South Korea over the next four years to produce dramas, movies and reality shows there, both for Korean audiences and for export to a wider global footprint.

The announcement coincided with a meeting in Washington between South Korean President Yoon SukYeol, who is on a state visit to the United States, and Netflix co-CEO Ted Sarandos.

“We were able to make this decision because of our confidence that the Korean creative industry will continue to tell great stories,” Sarandos said in a speech on Monday. “We are also inspired by the president’s love and strong support for the Korean entertainment industry and promoting the Hallyu wave.”

From music to film and television, South Korean entertainment has proven popular with audiences further afield. Squid Game is one of Netflix’s most successful original content ventures to date, reaching an audience of 142 million households worldwide; even two years after its debut, it remains one of the most popular series of all time.

In its native South Korea, the show is so popular that Netflix has filed a lawsuit from one of the country’s largest broadband providers over the traffic surge (and subsequent associated fees).

“The Squid Game” isn’t alone in TV shows that resonate with a wider global audience. Other shows include “The Glory” and the reality show “Physical: 100,” which became one of the world’s most-watched non-English shows earlier this year.

Netflix released more than 80 South Korean movies and TV series between 2015 and 2020 and “spend about 70% on South Korean content,” according to Dean Garfield, Netflix’s vice president of public policy, speaking in Seoul during a visit to South Korea in 2021. One hundred million U.S. dollars”.

The $2.5 billion pledge, if implemented, would average $625 million a year over the next four years, an increase from Netflix’s previous budget. In 2021, the US streaming giant Pledge of $500 million Produce original movies and TV shows in Korea.

In Asia, as in the rest of the world, Netflix competes with peers such as Amazon, Disney, Hulu and Apple TV, as well as a host of regional players in the 190 countries it currently operates in.

Netflix’s shift to original content comes as many of its competitors are pulling content from Netflix to boost their own services. That, in turn, has led Netflix to focus more on original content and a host of other methods — including ad-supported free access and launching games — to attract more subscribers and usage.

The ad-supported layer is not only meant to increase the number of users attracted to the free service, but also to attract new revenue streams in the form of ad sales. Launched last November, the company now offers a basic service with ads in the US, Europe (UK, France, Germany, Italy) and Asia (Japan, Australia and South Korea).

Indeed, Netflix offers plenty of carrots, but also plenty of sticks to boost its revenue and margins. Last week, Netflix explain it Plan to crack down on password sharing Start in the next few months.