Operating Profit 8.8 Billion → 17.1 Billion
Net Income Also More Than Doubled
[Asia Economy Reporter Cha Min-young] Netflix, which is engaged in a legal dispute with SK Broadband over network usage fees, posted more than double the operating profit and net income in Korea last year, thanks to the success of hits like 'Squid Game.'
According to the 2021 fiscal year audit report released on the 14th by Netflix Services Korea, last year's revenue reached 631.7 billion KRW, a 52.0% increase compared to the same period the previous year (415.5 billion KRW). Operating profit rose from 8.8 billion KRW to 17.1 billion KRW, and net income increased from 6.3 billion KRW to 13.3 billion KRW, more than doubling in both cases.
Last year's main revenue came from streaming (subscription fees), totaling 629.6 billion KRW, up 57.9% from the previous year (398.8 billion KRW). Revenue from Netflix group companies was around 2.1 billion KRW, most of which came from streaming services.
Although the cost of sales increased, the rise in revenue outweighed it, resulting in a net increase in profit. The majority of the cost of sales consists of fees paid by Netflix Services Korea to Netflix group companies responsible for intermediate distribution. This amount rose 61.2% from 320.4 billion KRW the previous year to 516.6 billion KRW last year. Selling and administrative expenses, including employee salaries, actually decreased, falling from 34.1 billion KRW to 33.9 billion KRW.
Meanwhile, Netflix is engaged in a legal battle with SK Broadband, an internet service provider (ISP), over the payment of network usage fees. In April 2020, Netflix filed a declaratory judgment lawsuit against SK Broadband claiming "there is no obligation to pay network usage fees," but it effectively lost in the first trial and is currently undergoing an appeal. On the 16th of last month, the first hearing for Netflix's appeal and SK Broadband's counterclaim was held at the Seoul High Court.
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