Korea’s content industry strained by streaming dominance: Experts

South Korea’s content industry is facing mounting concerns that its domestic production ecosystem is being weakened, even as local films and dramas gain unprecedented global success through streaming platforms.

While Korean content has helped drive global demand, production conditions at home are deteriorating, experts noted.

Netflix Inc. and other global streamers offer large budgets for original films and series, drawing in production capacity while securing intellectual property (IP) rights. Local production companies typically receive a fixed production fee and an upfront margin of about 10 to 15 percent, while most downstream revenue, including spinoffs and overseas distribution based on IP, flows to the platforms.

Experts noted that heavy investment by global streamers has pushed production costs sharply higher, even as the number of films released and dramas produced has declined.

Big-budget projects backed by platforms with hundreds of millions of subscribers command global attention, while smaller domestic producers are increasingly sidelined.

Kim Yoon-ji, a researcher at the Export-Import Bank of Korea, warned that a Netflix-centered structure could erode the grassroots production ecosystem that nurtures new talent and supports genre experimentation.

Even major domestic producers and broadcasters are being squeezed.

Without recouping investment through overseas markets, many now struggle to sustain production.

A notable example is Seoul Broadcasting System, which signed a content supply agreement with Netflix to provide new drama titles and simultaneous global releases of selected series over six years starting last year.

Industry observers say this reflects a vicious cycle in which rising production costs lead to difficulty recovering investment, deeper reliance on streaming funding, and growing dependence on global platforms.

At the center of the issue is control over IP.

Without ownership of IP that can generate long-term revenue after release, production companies risk losing their ability to operate independently, experts say.

There are also fears that creative diversity could suffer.

Kim Sung-soo, director of “12.12: The Day,” which drew more than 10 million moviegoers in Korea, said global streaming platforms ultimately cater to international audiences, raising concerns that Korea’s distinctive storytelling could be diluted over time.

A broader risk is the hollowing out of the industry. If global platforms conclude that investment in Korean content no longer offers sufficient value, they could sharply scale back spending.

With no domestic platform capable of fully replacing global streamers, such a pullback would likely trigger a steep decline in film and drama production.

Experts argue that Korea should use Korean content’s global profile as a springboard to expand international co-productions.

By offering stronger incentives for small and midsize producers and encouraging partnerships with overseas creators and investors, they say Korea can build a more resilient production base.

“Direct regulation of global streaming platforms could deter investment,” said Park Se-jin, a professor of media studies at Hanyang University. “Instead, there should be tax incentives for smaller producers, infrastructure support, and bilateral co-production agreements to help build a domestic production paradigm capable of competing with global giants.”