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The kdrama crisis

You may have seen on the homepage of your streaming platform a new wave of Korean series such as No Gain no love, The judge fom hell, A shop for killers, Marry my husband, Queen of tears. They are all part of the top 10 2024 of the most watched kdramas which have dominated all platforms. In 2023, the co-director of Netflix Ted Sarandos said that 60% of the customers had watched at least one kdramas on Netflix. Yet, the new popularity of kdramas might weaken the production company based in Korea.

The success of kdramas is part of a global strategy to promote tourism and Korean culture abroad launched by the Korean government in 1997, at a time when South Korea suffered from an economic crisis. The president at the time, Kim Young-sam, realized that South Korea was unable to compete in the industrial sector, despite the establishment of “chaebols” - large industrial conglomerates owned by powerful families such as Hyundai and Samsung. Inspired by the Hollywood business model, he decided to export Korean culture to develop the cultural influence and soft power of the country. He turned to the famous “chaebols” to achieve this goal and asked them to invest in the cultural sector, and in production companies which had begun to produce short k-dramas for the domestic market in the 1970s. The entertainment industry developed rapidly because of their investment and kdramas started to be exported to Asia and then the world. The Korean government wanted to reach an even larger market and the same strategy was applied with k-pop, k-food, k-beauty. In 2010s, the development of streaming platforms made k-dramas gain even more visibility, because people had access to subtitled, even dubbed, k-dramas. Netflix went further in 2017 and started producing its own kdramas which became really popular. In 2023, Netflix announced a 4-year investment plan of 2.5 billion dollars in k-drama production and other platforms such as Dysney+ and Prime Video also started producing their own kdramas which popularized them to western audiences but also started this kdrama crisis.

The Korean production has been weakened by the American big production, which are to produce rapidly kdramas with a higher budget. Korean producers are relying on low production costs to be profitable, but production costs have only increased in recent years. It has increased partly because of the salaries of the main actors. They are asking production to bring their salaries to the same level of Netflix productions. So that they can ask for up to 522 024 dollars per episode, which is impossible for a Korean production company. As a result, some actors prioritise big American productions over Korean productions, which need these stars to attract audiences. The drop in viewer rates can also explain the crisis of Korean production. Koreans are watching less and less TV, which affect the viewer rates of kdrama produced by Korean producers which originally used TV to broadcast their kdramas. As a result, production companies and broadcasters such as KBS, MBS and SBS are reducing the number of kdramas broadcasted, and are even cancelling productions because they don’t have enough funding. The kdramas that are still broadcasted on tv are not profitable and made the company lose millions of dollars. The Korean Association of Drama Production Companies therefore met to propose solutions for maintaining a production sector in Korea. One of the solutions would be to create a limit for the salaries of actors so that actors' salaries would not exceed 40% of the total budget, and up to 70% for lead actors. Another solution was to create royalties for the people involved in the production of kdramas to support the Korean production. However Netflix and other platforms are refusing to participate in the debate with the unions which leaves an entire sector in crisis and thousands of jobs at risk.

Romane