[The Crisis of K-Content] Half of Production Costs Go to Top Actors' Fees... A Strange Boritgogae

②Appearance Fees Soar, Who Gets How Much?
Lead Actors' Fees Near 700 Million to 1 Billion Won... Driving Production Cost Increase
"Top Star ≠ Box Office Hit" vs "Actor Recognition Equals Money"

Editor's NoteThe K-content market is facing an unprecedented ice age. After the COVID-19 pandemic, competition intensified due to an oversupply of content, and production costs soared. As profitability worsened, completed films and dramas piled up in warehouses. Production companies and investment-distribution firms have run dry financially. We are now in an era of 100 billion KRW production budgets and 1 billion KRW actor fees. As production scales grew, investments contracted. The biggest cause of rising production costs is increased labor expenses. In some cases, actor fees exceed the revenue generated by the work. We examined the functional relationship between actor fees and the production market's bottleneck.

The image is not directly related to the content of the text. [Image source=Pixabay]

Since the pandemic, online video services (OTT) have emerged as the dominant trend, rapidly expanding the content market. As global platforms actively entered K-content production, the fees for stars recognized in overseas markets skyrocketed. The sharply increased production costs have also been applied to other media productions.

A-list Actor Fees Have Increased 2-3 Times... Yet Some Actors Are Doing Part-Time Jobs

The fees of top stars have nearly doubled or tripled. Recently, production company CEOs lamented, "Only a very small number of actors earn a lot, while the rest operate at a loss, creating a strange structure." The Korea Drama Production Association expressed at a meeting earlier this year discussing solutions to the drama industry crisis that "the lead actor's fee is no longer 'hundreds of millions of KRW per episode' but '1 billion KRW per episode' in reality." A representative from a well-known drama production company said, "Most lead actors are asking for even higher fees."

Before the pandemic in 2020, star actors' fees per drama episode were around 200 to 300 million KRW, but now, amid fierce OTT drama competition, they are formed around 500 million KRW per episode. Even some supporting actors' fees have increased more than two to three times. A production company CEO who has produced films and dramas said, "Even actors who have played significant supporting roles now simply ask for 100 to 200 million KRW." Lead actor fees in films are estimated to be between 600 million and 1 billion KRW. Some top A-list actors' fees approach 1 to 1.3 billion KRW.

The 'rich get richer, poor get poorer' phenomenon in actor fees is also intensifying. As the number of productions sharply decreases, minor role actors are distressed. The fee gap between minor role actors and A-list stars is as much as 2,000 times. For minor roles, it is common for roles to suddenly disappear or fees to be cut. The increase in actors who previously maintained mystique appearing on variety shows or working with overseas production companies is also due to fewer projects. In desperation, they sometimes take on 'two jobs.'

This photo is not directly related to the main content. [Photo by Yonhap News]

Within the industry, there is a high expectation that a 'fee guideline' will soon be established in the K-content market, where securing profitability has become difficult due to intensified competition. At the 29th Busan International Film Festival (BIFF), Kim Tae-won, Netflix Content Team Director, expressed concern, saying, "K-content is loved and successful worldwide, but if production costs continue to rise, there will be boomerang-like side effects." He added, "We are considering appropriate fees. Although no guidelines have been set, it seems right to set appropriate fees according to each project's budget. Recently, discussions have been held with this in mind."

Content Market Uncertainty: "Fee Bubble" vs. "Ease of Export"

Due to the skyrocketing fees of top stars, global OTT companies have recently turned their attention to Japan. In Japan, dramas can be produced at about half the domestic production cost. A production company CEO said, "We are discussing content collaboration using Japanese and domestic IPs, and actor fees are noticeably lower," adding, "Unlike the domestic market where profitability has worsened, overseas OTT companies are also highly evaluating the potential and increasing investments."

[Photo by Pixabay]

Some argue that since overseas sales revenue depends on actor recognition, simply cutting production costs indiscriminately is unnatural. Many actors now demand shares of distribution rights, which is the current state of the K-content market. Actor A, who recently starred in a tentpole film, said, "It is true that a drama must succeed domestically to gain attention overseas, but if a star appears, exports become easier. Production companies aware of this pay premiums to cast them, creating additional revenue and securing profits safely."

On the other hand, in the domestic market, having a star does not guarantee success. A senior executive from a major investment-distribution company, who requested anonymity, said, "Having famous actors or those with strong fandoms definitely helps promote the work initially, but the formula 'a top star guarantees success' no longer holds in the market. Content consumption has become personalized, increasing uncertainty. We feel firsthand through marketing that the 'fees' of top stars are a bubble."