Global OTT Investments Weaken IP Accumulation and Revenue
Equity Investment by Business Entities Demands a Production Committee
Sharing Achievements and Distributing Risks... Government Support Needed
As the stature of K-content continues to rise, there is growing demand for the introduction of a "Korean-style production committee" to secure intellectual property (IP) sovereignty and to overcome the limitations of advertisement-based revenue models.
On March 4, the Korea Creative Content Agency stated in its report, "New Strategies for the Advancement of the K-Content Industry: The Korean-Style Production Committee," that "the current Korean content industry is experiencing environmental changes that make it possible to consider a production committee structure, especially in terms of expanding IP business and diversifying financing methods."
The report particularly emphasized that "production investments centered on global online video services (OTT), represented by Netflix, have ultimately weakened domestic content companies’ ability to accumulate IP and build sustainable revenue models over the long term." It further stressed the need to "establish a new framework that encourages the design of IP business structures from the content planning and development stage."
K-content is elevating its profile by expanding overseas through global OTT platforms. However, a contradictory situation persists: while OTT platforms guarantee the full production budget and a certain share of profits, they monopolize the IP, which means domestic content companies do not see much profit from the success of their works.
The Korea Creative Content Agency reported that "according to a survey on the status of content IP transactions, 81.0% of respondents said they have no experience with 'parallel IP expansion production,' which involves planning simultaneous expansion into various media and general industries from the early planning stage." The agency added, "It is urgent to diversify portfolios to break away from revenue structures focused on video production and broadcasting rights sales, and to compete with global IPs."
As an alternative, the agency suggested adopting the production committee model. The production committee is a representative investment method for content production in Japan. In this structure, various business entities invest equity to create content and share risks, maximizing profits based on their respective business expertise. This model is known to have spread in Japan right after the collapse of the bubble economy in the 1990s and is based on a project-type joint venture under local civil law. Investors include broadcasters, publishers, production companies, distributors, record labels, toy and game companies, advertising agencies, and platform operators. Depending on their investment ratios, they acquire IP usage rights and profit distribution rights.
Conceptual Diagram of Content IP Business Package Support Project (2025). Provided by Korea Creative Content Agency
The Korea Creative Content Agency analyzed that "while the traditional funding channels have closed due to the shrinking broadcast advertising market in Korea, the expansion of global OTT platforms and the advancement of fandom-based business models are increasing the potential for IP business." The agency stated that "through production committees, which are a form of 'business alliance,' it is possible to maximize profits and ensure IP sustainability." Considering the positions of IP original creators, video production companies, game companies, and platform operators, the agency said that global distributors are essential, and that global co-production, government support, and investment matching are also required.
However, the agency also noted realistic constraints, stating that "Korea lacks major toy companies like Japan's Bandai, and rights coordination among participants is difficult due to issues such as actor IP and portrait rights." For a Korean-style production committee, the agency explained, "the government should support not only simple development costs but also additional business planning expenses, provided as a package that bundles planning and development, production costs, and funds."
In addition, the Korea Creative Content Agency stated that "the Korean-style production committee should be approached as an investment structure that enables mid- to long-term profit recovery based on the increased value of IP, rather than as a one-off production support project." The agency added, "A clear IP utilization pathway is needed, along with an intermediary organization to coordinate interests and ensure transparent operations."
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