[Herald Economy = Park Young-hoon] “Is it true that Netflix and Tving accumulated only deficits while making dramas?”
OTT platforms like Netflix and Tving, which have been heavily investing in dramas with production costs of at least 20 to 30 billion KRW, are now shifting their focus to entertainment content. This shift is due to a decreasing subscriber base from original dramas and significant accumulated deficits from high production costs.
With the skyrocketing costs of lead actors’ fees, which have risen from 100 million KRW per episode to now basically between 300-400 million KRW, the production costs have doubled in just a few years.
Tving, which has released the most dramas among domestic OTT platforms, recorded a deficit of 142 billion KRW last year and continues to be in the red through the third quarter of this year. Wave’s accumulated deficit has also reached 200 billion KRW.
Tving has introduced the card of a general public entertainment program, “Transit Love.” The “Transit Love” series is Tving’s most significant contributor to its accumulated paid subscriber count in its history, creating buzz with each series.
“Transit Love” features couples who have separated for various reasons gathering to revisit their past loves and seek new ones. Tving has prepared a spin-off ahead of releasing “Transit Love 4” early next year, where some participants from seasons 1, 2, and 3 go on a trip.
While producing a drama costs at least 20 billion KRW, it’s said that even blockbuster-level variety shows cost around 5 billion KRW. The appearance fees for participants in general public entertainment programs are significantly lower.
Tving has not disclosed the appearance fees for “Transit Love,” but they are reported to be in the range of several million KRW.
Despite high subscription fees, Netflix, having faced criticism of “there’s nothing more to watch,” has also turned its attention to entertainment content.
Netflix, which had no original drama hits this year, scored a big success with the culinary management variety show “Black and White Chef: Culinary Class War.” They are now focusing their efforts on entertainment content such as “The Influencer,” “New Singer Jo Jeong-suk,” the hit “Black and White Chef,” “Comedy Revenge,” and “Zombieverse: New Blood.”
Netflix is also launching a general public romance program similar to Tving’s “Transit Love” with “Single’s Inferno 4.” “Single’s Inferno” is considered one of Netflix’s most successful entertainment offerings. “Single’s Inferno 3” occupied the top positions in the global TV show category for five weeks from its release to the end.
On the flip side, there are concerns that Netflix may ultimately reduce its investments in Korean dramas, having driven up actors’ fees and drama production costs which have significantly disrupted the broadcasting ecosystem.