[2021 OTT 문화혁명] Korea is a global OTT competition… The video market’law of the game’ changes

The drama’With God’ was planned three years ago and is about to be cast. The first and second films of the same name mobilized 10 million viewers each in Korea, and were also successful in Asian markets such as Taiwan and Hong Kong. Broadcasters’ courtship continued from the drama planning stage. In recent years, its popularity has soared even more. Overseas video streaming services (OTTs) such as Netflix and Disney Plus jumped into the competition to capture’With God’. Dong-yeon Won, CEO of Realize Pictures, who produces the drama, said, “As the OTT competition intensifies recently, the ransom has risen and we are able to sign more advantageously.”

Last year, the topic of the domestic video industry was Netflix. Netflix, which has been actively targeting the domestic market in recent years, has gained wings with the spread of a novel coronavirus infection (Corona 19). As indoor activities increased, the number of subscribers increased significantly, and domestic dramas and movies were absorbed like a black hole.

However, Netflix faces a strong enemy this year. This is because Disney Plus has announced that it will enter Korea. Disney Plus has been rapidly expanding its power after launching its service in the United States in November 2019, claiming to be Netflix’s counterpart. Disney Plus’s trip to Korea is just the beginning. In the industry, it is a matter of time before the US OTT HBO Max and Apple TV Plus, which are seeking globalization, to enter Korea. This year marks the first year in which the Korean video market is transforming into a global OTT marketplace.

Content acquisition war rather than subscriber fight

Netflix and Disney Plus are expected to fight fiercely over the expansion of subscribers in Korea. However, there are many opinions that the real fight is to secure Korean content. This is because K-dramas and K-movies are indispensable weapons in targeting the Asian market.

Disney Plus initially had no plans to produce its own content in Korea. It was based on the judgment that Disney animation and Marvel series alone were enough to compete. However, recently decided to enter Korea, the policy was changed. The fact that the dramas’Human Class’,’Kingdom 2′, and’Crash Landing on Love’, which were introduced through Netflix last year, gained great popularity in the Asian market was stimulated. Disney Plus is knocking on the door of famous domestic film and drama production companies. One of the interests in the industry is what Korean dramas or movies that Disney Plus will show for the first time with the launch of Korean services.

Apple TV Plus, which has not even declared entry into Korea, has already begun to produce the drama’Pachinko’ starring actor Lee Min-ho. It is a work dealing with the hard lives of Koreans in Japan. The original work is a novel of the same name by Lee Min-jin, a Korean American. One filmmaker analyzed it as “a casting aimed at Hallyu fans and at the same time taking into account the Korean market.”

In addition to Netflix and Disney Plus, there are also plans with collaborations with OTT in mind. It is a drama’Casino’ in which director Kang Yoon-sung of the movie’Criminal City’ (2017) writes and even directs. This drama, which draws a man’s turbulent life 16 times in the background of a casino, costs about 30 billion won (about 2 billion won per episode). It is a difficult project for domestic broadcasters, whose production cost per episode is around 1 billion won. CEO Jang Won-seok of the production company BA Entertainment said, “The content is so strong and the production cost is high, so I don’t even think about organizing a domestic broadcaster. I’m also in contact with OTTs, which have high potential to enter the country, such as HBO Max and Apple Plus TV.”

Change the entire Korean video industry

Global OTT’s attack in Korea is shaking the video industry landscape. The movie industry is rapidly turning its attention to OTT as the theater audience has plunged due to Corona 19.

BA Entertainment, which planned’Casino’, was originally a film company. They created’Tunnel’ (2016) and’Criminal City’. Recently, as the theater revenue model collapsed, he turned his attention to drama. Two additional dramas are being prepared, including’Gangnam King of the Night’ and’Seoul Story’ targeting global OTT. Film company Wolkwang produces Netflix and the drama’Surinam’. CEO Jang Won-seok said, “Even after the Corona 19 situation is over, the number of films that can be digested in the theater has already been filled, so we have no choice but to turn to the production of a drama.” CEO Jang added, “The way OTT’s drama production, which is not much different from the movie scene unlike domestic broadcasters, also had an impact.”

OTT is also drawing a new terrain by pushing out terrestrial broadcasters, which have occupied the pinnacle of broadcasting power, and emerging powerful comprehensive programming channels.

Famous drama production company A sent a new drama plan last year to Netflix instead of broadcasters such as terrestrial. It is said that the production cost per episode was at least 1.5 billion won, so he had no choice but to greedy for Netflix, which was unprecedented in support. This was largely due to the increased sales burden due to the freezing of the Korean Wave market in China and Japan.

OTT is also changing production practices. In the existing broadcasting market, which was dominated by terrestrial and cable broadcasting, dramas with unconventional contents that would have been neglected are appearing one after another.

A typical example is’Sweet Home’, a creature (a movie or drama featuring a monster as a main character), which was introduced on Netflix last December. A 10-story drama about the residents of an old Seoul apartment fighting against various monsters cost 30 billion won. It is a new work by PD Lee Eung-bok, a star broadcaster who directed’Descendants of the Sun’ (2016),’Ghost’ (2017), and’Mr. Sunshine’ (2018), but most of the actors appearing are new or unknown. In existing broadcasts, it is not easy to spend 30 billion won even if star producers, star writers, and top star actors join hands. In addition, Creature is a genre with a thin domestic consumer base. ‘Sweet Home’ is a drama that is difficult to realize by looking at the domestic market. After’Sweet Home’ was released, domestic reactions were mixed, but in 10 overseas countries, it rose to No. 1 on Netflix. PD Lee Eung-bok said, “I challenged myself in terms of expanding the subject matter of Korean dramas,” and said, “It was nice to collaborate with Netflix because I was able to focus on directing with imagination.”

‘Human Class’ and’Kingdom’ series were also dramas that could be produced because it was Netflix. ‘Human Class’ boldly dealt with the controversial subject of’conditional meeting’ of teenagers and raised the shadow of teenagers. The’Kingdom’ series combines zombies and the Joseon Dynasty royal court. They were genres and materials that were difficult to deal with as a deliberation problem in existing broadcasters.

As genre experiments were conducted with OTT and popular repercussions were produced, zombies became a drama trend. SBS will broadcast’Chosun Gumasa’ in the first half of this year. This is the first’zombie historical drama’ to be shown on TV. As the OTT market grows further due to the landing of Disney Plus, there are also voices mixed with expectations that the genre experimentation of Korean dramas will become more diverse. A high-ranking official in content production at an agency with a Hallyu star predicted, “Cooperation with closed and relatively conservative broadcasters will gradually be pushed to subordinate priority due to OTT’s active investment and open work methods such as Netflix.”

“Most all rights reserved”… Concerns about subcontractor decline

I can’t just welcome OTT’s advance. There are concerns that a global company may take the leadership of the domestic content market by signing an exclusive contract with enormous capital. Bae Dae-sik, director of the Drama Producers Association, said, “Most of OTT original contents are contracted in the form of a monopoly of copyright. In the case of Netflix, the conditions for guaranteeing profit are better than that of domestic broadcasters, but when the copyright is handed over, domestic content companies are subcontracted to global capital There is also a concern that it can be done.” A representative of a leading film company also emphasized, “It seems like you are passing the copyright right now and holding your head, but you are giving up the enormous profits you will earn overseas,” and stressed, “We need a differentiated contract that can distribute profits according to the content.”

As a result of OTT, a lot of capital was invested in broadcasters, and as the channels became diversified, the actor’s appearance fee soared is also a side effect. A terrestrial broadcaster’s Drama Bureau PD said, “I was embarrassed to ask for 200 million won per episode from the actor’s agency in my twenties who appeared as a supporting actor in the drama,” and said, “I am most worried about the increase in appearance fees in the future.” 200 million won per episode is the amount that was mentioned when very few top stars such as Lee Byung-hun appeared in the drama two years ago.

Lazegi Film Reporter [email protected]

Yang Seung-jun reporter [email protected]

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