Korean OTTs Struggle Against Netflix’s Dominance in K-Drama Market

According to reports, the production cost for Netflix’s highly-anticipated “Squid Game 2″is 100 billion won, ushering in a new era for K-dramas. The lead actor, Lee Jung-jae, is said to receive an appearance fee of 1 million dollars per episode, making him the highest-paid Korean actor.

The popular show “Squid Game”has been credited with significantly increasing appearance fees. With a total of 13 episodes over 2 seasons, it is estimated that Lee Jung-jae could potentially earn up to 13 million dollars (approximately 17.134 billion won).

Lee Jung-jae, in a YouTube video, increased fans’ excitement by announcing that “Squid Game Season 2″would be even more captivating than Season 1 and is set to premiere in the winter. Season 1, which was released in 2021, sparked the K-content phenomenon and caused a global frenzy. According to reports, Netflix earned a massive economic profit of 1 trillion won from the success of this series.

If “Squid Game 2″is equally successful as its predecessor, Netflix’s 100 billion won investment and high expectations will be justified. Along with “Squid Game”, the CEO of Netflix also stated that there will be increased investments in Korean content.

With Netflix investing a significant amount of money into Korean dramas, Korean OTT companies are currently struggling. The average production cost for a drama, which was previously estimated at 300-400 million won per episode, has now increased to 2 billion won.

As a result of Netflix increasing the level of actors’ appearance fees, covering production costs has become more challenging for Korean drama producers, as appearance fees now make up the largest portion of the total expenses.

Due to this, Korean OTTs like TVING and Wavve have begun decreasing their drama productions and shifting their focus towards other areas such as sports and entertainment.

According to an official from a domestic OTT company, if Korean companies continue to demand investments and appearance fees comparable to those offered by Netflix, they may struggle to produce dramas. This could potentially result in Netflix monopolizing the K-drama industry.