The Korean entertainment industry, celebrated for its K-Content, is experiencing unexpected setbacks in the post-pandemic era. The already-produced films and dramas are struggling, lost in limbo, unable to find a platform for release.
The Korean film industry enjoyed a golden period in 2019 with blockbuster hits such as Extreme Job and Parasite, both of which drew over 10 million viewers. This success attracted substantial investment and led to an active production scene, however, the onset of the COVID-19 pandemic froze the entire industry. The situation worsened as expectations of a post-pandemic rebound faded. With nearly 57 already-produced films in storage and a stagnant growth in the Korean film audience, the release of new films is continually being postponed.
The drama sector is also walking a similar tightrope. First evident in the broadcasting industry, where advertising revenues have plummeted due to the economic downturn, this crisis is pushing broadcasters to cut back on their drama programming. Hence, many networks are resorting to a different strategy: increasing the number of less costly variety shows to preserve their earnings. Consequently, dramas that were in production or completed are failing to secure a spot in the schedule, resulting in an accumulating backlog. There are reports indicating that approximately 80 dramas in the current broadcasting industry are struggling to find airtime and remain in a state of uncertainty. Out of this number, around 50 dramas have already been pre-produced, while approximately 30 dramas are currently in production but are facing difficulties in securing a broadcasting schedule.
A staff of a drama production company, who requested anonymity, said, “We can no longer rely solely on the networks for scheduling. Everyone is looking forward to getting greenlighted for streaming service platforms.”
The booming global popularity of K-Dramas, fueled by Netflix’s significant investments, reveals a darker side to this success story. The already high production costs have skyrocketed, leaving traditional broadcasters and production companies unable to keep up. Naturally, dramas and films that guarantee buzz and box office success are being funneled to streaming platforms.
Receiving production support from OTT platforms is not necessarily beneficial for production companies if the platforms end up with Intellectual Property rights. High-potential projects are produced as originals by streaming platforms, with production companies receiving less than 10% of the production cost as fixed revenue. In the past, the networks shared the costs, but with the recent reduction in drama schedules, production companies are feeling the financial strain. They are increasingly likely to receive a fund in exchange for giving up IP rights.
A broadcasting industry insider sighed, “Nowadays, many production companies don’t even get 10% of the production costs. Whether it’s drama or film, production companies are forced into a ‘low risk-low return’ approach.”