By Eun-Young Jeong in Seoul and Joe Flint in Los Angeles
Netflix Inc. will invest $500 million this year in South Korean
films and TV series, tapping one of Asia's cultural powerhouses as
global competition for viewers attracts more rival services and
expands beyond American content.
It is one of Netflix's most significant overseas investments in
recent years. The spending also marks a deeper commitment to a
South Korean entertainment industry enjoying heightened prominence
following the surprise success of the film "Parasite," which last
year won four Oscars including best picture--the first
non-English-language film to do so.
Between 2015 and 2020, Netflix spent about $700 million on
Korean content, on both licensing outside titles and making about
80 original films and TV series.
That includes a three-year partnership with one of South Korea's
major entertainment companies, CJ ENM Co., plus its production
subsidiary Studio Dragon Corp. The deal has already produced hits
such as "Sweet Home," an apocalyptic suspense series. It has been
watched by more than 22 million Netflix member households after its
December debut, Netflix said last month, making it one of the Los
Gatos, Calif.-based company's more popular Korean-produced
shows.
"Our commitment towards Korea is strong. We will continue to
invest and collaborate with Korean storytellers across a wealth of
genres and formats," said Ted Sarandos, Netflix's co-chief
executive officer, in an online press conference on Thursday.
As its U.S. subscriber growth has slowed in recent years,
Netflix has been spending aggressively on original content abroad,
as the pandemic keeps people at home and supercharges demand. The
streaming service passed the 200 million subscriber mark at the end
of 2020 and much of that growth came from overseas. In the final
three months of 2020, Netflix added two million subscribers in
Asia, plus 4.5 million in Europe, the Middle East and
Africa--compared with 860,000 in the U.S. and Canada.
Part of the motivation for Netflix's global investment comes
from increased competition in the U.S. from new services including
Walt Disney Co.'s Disney+. In its most recent letter to
shareholders, Netflix cited its new rivals as a primary reason for
"why we have been moving so quickly to grow and further strengthen
our original content library across a range of genres and
nations."
Besides South Korea, Netflix is looking to boost local content
in Europe, the Middle East and Africa. The company has also
invested heavily in India, spending $400 million on local content
during 2019 and 2020. Netflix is planning to unveil a significant
programming commitment for Indian content as well next month, a
person familiar with the matter said.
In Japan, Netflix has been investing in local anime films, which
is gaining a broader fan base globally. Netflix said last year it
had 16 anime projects in the works with a Tokyo-based anime
production hub.
Global streaming services like Netflix, HBO Max, Hulu and Amazon
Prime have created a paradigm shift in how content is viewed and
appreciated, said John Penotti, co-chief executive officer at SK
Global Entertainment in Santa Monica, Calif., who produced the 2018
box-office hit "Crazy Rich Asians." Mr. Penotti is working with
Netflix on a project about the 2018 Thai cave rescue of a youth
soccer team.
"We're moving in this direction where the technical capabilities
of these platforms have allowed for viewer appreciation around the
world" of culturally-specific shows, Mr. Penotti said.
About 3.8 million South Korean households are subscribed to
Netflix, according to the company. Monthly unique viewers soared
64% in November compared with the start of 2020, according to a
Nielsen Korea report, published last week.
In South Korea, Netflix has so far relied heavily on both its
originals and licensed content to woo viewers. Popular South Korean
series on Netflix have included a sizable selection of licensed
content such as the inter-Korean hit romance drama "Crash Landing
on You," featuring South Korean A-list actors Son Ye-jin and Hyun
Bin, and "Sky Castle," a series spotlighting the country's
private-education frenzy.
But the investment in South Korea's entertainment industry
brings ambitions to attract viewers world-wide, too. The country
for decades has developed a pipeline of exportable pop
culture--called "hallyu" or the Korean Wave--first spreading across
Asia but in recent years finding a more global market.
"Audiences around the world are falling in love with Korean
stories, artists, and culture," said Minyoung Kim, a Netflix vice
president of content for Korea, Southeast Asia, Australia and New
Zealand, in a Thursday blog post about the fresh investment.
Beyond the success of "Parasite," South Korea has seen its other
cultural exports thrive. The K-pop band BTS has topped the U.S.
Billboard charts and received a Grammy nomination. Another group,
Blackpink, was featured in a Netflix documentary and one of its hit
songs recently passed 1.5 billion views on YouTube.
Meanwhile, global demand for Korean content is expanding beyond
dramas and films to include entertainment variety and comedy shows,
said Shin Su-yeon, an analyst at Shinyoung Securities Co., a
brokerage in Seoul.
"Netflix also seems to be catching onto this growing demand for
lighter entertainment," Ms. Shin said.
Write to Eun-Young Jeong at Eun-Young.Jeong@wsj.com and Joe
Flint at joe.flint@wsj.com
(END) Dow Jones Newswires
February 25, 2021 03:12 ET (08:12 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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