[Reporter’s Notebook] K-Pop Demon Hunters: Impossible to Produce in Korea Today

Structural Challenges and Domestic Market Limitations
Policy Support Needed to Revitalize Local OTT Platforms

"A 130 billion won animation film production budget? In today's Korea, that's nothing but a dream."

Upon hearing that the production budget for the Netflix animated film "K-Pop Demon Hunters" (K-Pop Demon Hunters) that captivated audiences worldwide was 130 billion won, a domestic over-the-top (OTT) platform official let out a deep sigh. The sigh seemed to capture the stark reality that, despite a strong desire to distribute Korean content globally through domestic platforms, such ambitions are far from achievable at present.

The challenges left by K-Pop Demon Hunters are numerous. To begin with, the production and distribution environment for Korean content is poor. Tving, the leading local OTT platform, has not produced a single original film since 2021. The reason is that it has not yet established a system for global expansion, and producing a film with a minimum budget of several tens of billions of won, targeting only the small domestic market, is not cost-effective. This stands in stark contrast to Netflix, the world's top OTT platform, which is further strengthening its capital power and market dominance to take over the global market.

Global expansion remains a long-cherished goal for domestic OTT platforms. However, given the current situation, there is an inevitable gap from the starting line. An OTT platform targeting a global population of 8 billion is fundamentally different from one based on a domestic market of 50 million.

Of course, there have been calls to scale up and compete with giant OTT platforms, leading to ongoing mergers among domestic OTTs. However, due to conflicting interests among stakeholders, no solution has been reached even after two years. Plans for direct overseas expansion of platforms are also being pushed further back.

The success of K-Pop Demon Hunters also highlighted the importance of intellectual property (IP). While Netflix, which owns the IP, earned over 1 trillion won in profits, Sony Pictures, the American company that actually produced K-Pop Demon Hunters, earned only 20 million dollars (about 27.8 billion won). Netflix's strategy of investing the entire production budget in exchange for exclusive rights to all IP generated from the content proved far more effective. The fate of Sony Pictures, which has been reduced to a subcontractor for Netflix, is not much different from Korea's own experience of not being properly compensated for the global success of "Squid Game."

If local OTT platforms are unable to properly handle content distribution or secure IP, dependence on Netflix will only deepen. Staff in Chungmuro will lose their footing, and it will be difficult to escape the subordinate relationship of relying on Netflix original productions. Industry insiders are calling for proactive policies, such as joint infrastructure support for artificial intelligence (AI), subtitles, and data technology platforms. It is time for a comprehensive plan to build a sustainable ecosystem for K-content.