Netflix Invests 550 Billion KRW in Korean Content... Who Benefits?

[Asia Economy Reporter Ji Yeon-jin] Netflix recently held an event on YouTube introducing this year's Korean Netflix content lineup, drawing attention to content production companies.

According to the securities industry on the 27th, Netflix plans to invest 550 billion KRW in Korean content this year alone. Compared to WAVVE, the leading domestic OTT platform, which planned to invest 300 billion KRW over three years until 2023, and Tving, which planned to invest 400 billion KRW during the same period, this is considered an overwhelming level.

As competition in the domestic OTT market heats up, structurally benefiting content production companies, Netflix's move is expected to accelerate this trend. From Netflix's perspective, it can expect stabilization of paid subscribers through strengthened content competitiveness, while Korean content producers are given the opportunity to showcase high-quality Korean content in the global market, enhancing their production capabilities and profitability.

Netflix pursues a virtuous cycle by exposing content to many viewers through various methods such as recommendation algorithms and returning the benefits to creators. Among Netflix Korea originals, 'Kingdom' and 'Extracurricular' provided an opportunity to reevaluate Korean content. In the past, English was considered a basic requirement for global content, but now there is confidence that the most Korean dramas, even if not romance, and content in Korean can gain understanding and empathy from overseas viewers.

This year, the special episode of Kingdom, 'Kingdom: Ashin of the North,' is scheduled to be released on Netflix, and Jin Han-sae, the writer of Extracurricular, is preparing a new work titled 'Glitch.'

Despite the adverse effects of COVID-19 last year, Korean films such as 'Alive' and 'Time to Hunt' were evaluated as showing the potential of Korean cinema. Recently, 'Space Sweepers' ranked in the Top 10 of the day in 80 countries. This year, various Korean films such as 'Night in Paradise' (to be released on April 9) are scheduled to be introduced through Netflix, and Korean original film production will begin. The planned works include two films: 'Carter' and 'Moral Sense' (working title).

Shin Soo-yeon, an analyst at Shin Young Securities, said, "Following the news of Netflix's investment in Korean content, most content production companies' stock returns outperformed the KOSPI," adding, "The stock performance of related production companies such as NEW, AStory, and Jcontentree was even better."