[Book Sip] Global Popular K-Content Has Something Hollywood Does Not

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As streaming content gains attention, a tectonic shift is occurring in the global content market. The Hollywood camp, which has long dominated the content industry, is now threatened by emerging forces such as Netflix, Amazon, Apple, and Google. Korean content has gained prominence due to the popularity of titles like "Ojingeo Game" (Squid Game), "Gisaengchung" (Parasite), and "Heukbaek Yori-sa" (Black and White Chef), but the author explains that K-content still accounts for only about 3% of Netflix's total viewership. Beyond the U.S., there is a silent war being waged with global hub countries including Mexico, the UK, Spain, Japan, and India. The author, who has been involved in the media content industry for 30 years, surveys the collapse of the century-old broadcasting industry's old order and the unfolding global streaming war, presenting victory strategies for K-content.

The global streaming phenomenon, which has become a perfect storm, exhibits unique characteristics different from previous media content operators. It is a global D2C (Direct-to-Consumer) content distribution platform. These platforms provide content directly to global viewers. They integrate content distribution and production, pursuing economies of scale in content creation and supply. While embodying the form of a new cultural empire, they also realize cultural pluralism. The operators of these global streaming platforms can be broadly divided into the Hollywood camp and the Big Tech camp. Disney+, Max, Peacock, and Paramount+ belong to the Hollywood camp. They operate not only streaming but also linear TV. Netflix, Amazon Prime Video, Apple TV+, and Google's YouTube belong to the Big Tech camp, operating streaming services exclusively. The two camps have fiercely competed for global streaming dominance over the past three years.

By the end of 2023, Netflix had secured 260 million subscribers across 190 countries. In contrast, TVING has 3.8 million subscribers only in Korea. Netflix actively leverages the advantage of subscriber scale. Utilizing economies of scale reduces the cost per subscriber when producing local content or purchasing broadcasting rights. Therefore, Netflix can invest over 3 billion KRW per episode in domestic drama production and invest in films costing 20 billion KRW. TVING, with only about 1.5% of Netflix's subscriber base, cannot afford such scale or costs. The subscriber gap between Netflix and TVING will only widen over time.

However, sports programs require live viewing, which can prevent viewer dispersion. Watching a drama an hour late is not a big loss, but watching a sports game an hour late is almost the same as not watching it at all. This is why broadcasters are increasingly investing in sports.

In conclusion, as of 2022, estimated content spending by operators is $17 billion (about 22 trillion KRW) for Netflix, $7 billion (about 9 trillion KRW) for Amazon Prime Video, $4.8 billion (about 6 trillion KRW) for Apple TV+, and $3 billion (about 4 trillion KRW) for Disney+. Operators like Warner Bros. (Max), Universal (Peacock), and Paramount (Paramount+) likely spend less than Disney+. Ultimately, Netflix's content spending far exceeds that of other operators.

So, from the perspective of local content, where does the film Okja belong? The film Okja, produced in Korea, was made by Plan B, a U.S. production company run by actor Brad Pitt, with production costs invested by Netflix, and directed by Korean director Bong Joon-ho. The main cast includes actors from both the U.S. and Korea. Therefore, this Korean-language film is a Korean local original. What about Pachinko, produced by Apple TV+? Although mostly produced in Korean and featuring mainly Korean (ethnic) actors, it was produced by the U.S. production company Media Rez, with investment from Apple, making it strongly an international co-production. Nevertheless, Pachinko is closer to Hollywood content than local content. Next, Ojingeo Game (Squid Game) is in Korean, produced by a Korean production company, features Korean actors, and involves only Korean creators. Of course, Netflix invested in its production costs. Therefore, Ojingeo Game is closest to the definition of local content.

According to the UK research firm Enders Analysis, Netflix produced a total of 1,846 hours of originals in 2022. Of these, local content accounted for 1,045 hours, more than half at 56.6%. The share of U.S. content dropped below 50%.

Spain accounted for 7 of the top 20 most-watched non-English movies and TV shows on Netflix, more than any other country including Korea (4), France (2), and Germany (2).

For reference, Netflix's domestic revenue in 2022 was 773.3 billion KRW. MBC earned 861.5 billion KRW, and SBS earned 1.013 trillion KRW. However, in 2023, Netflix's revenue rose to 823.3 billion KRW, while MBC's dropped to 745.3 billion KRW and SBS's to 866.8 billion KRW. It is highly likely that terrestrial broadcasters' revenues will decline while Netflix's revenues increase. Netflix has now become a major media content operator domestically.

The British monthly magazine The Face diagnosed the success factors of K-content as follows: "Attention should be paid to Korea's rapidly growing global culture over the past 25 years. Since late 1997, President Kim Dae-jung's financial support for Korean films and the screen quota system sowed the seeds for the development of Korean cinema. Starting with the 1999 film Shiri, dramas like Winter Sonata and Dae Jang Geum gained popularity in Asia, leading the Korean Wave. Thanks to continuous government support and funds, Korean films also entered Western markets. Many directors and actors moved to Hollywood, competing for awards at major film festivals. Sixteen years after the release of Oldboy (2003), Gisaengchung (Parasite) won four Academy Awards. Meanwhile, Netflix's investment in Korean content has opened new markets for K-dramas on TV for Western viewers." The growth of K-dramas has thus been built on nearly 30 years of accumulation.

The year 2021 will be remembered as the year K-content began its breakthrough based on its accumulated foundation. Youn Yuh-jung won the Academy Award for Best Supporting Actress in 2021, becoming the first Korean actor to do so for the film Minari. Netflix releases like Ojingeo Game (Squid Game) and Jigok (Hellbound) gained worldwide popularity.

Summarizing the views examined so far, three factors contribute to the competitiveness of K-dramas. First is the fresh storytelling not seen in Hollywood. Second is the production capability that combines the three elements of visual content?story, character, and storytelling?to create quality content. Third is high production value, meaning cost-effectiveness. Ultimately, it is about creating innovative storytelling with fresh stories at a low cost.

Global Streaming War | Written by Moon Seong-gil | Bookie | 464 pages | 29,800 KRW