The whole network chases "Dark Glory", why is Netflix's Korean drama popular?

"Dark Glory", this year's well-deserved blockbuster drama. On the day of the launch of the second season, almost the whole world was "calling Yeonjin", and although Netflix was fully prepared, the massive influx of users in an instant still paralyzed the server.

Before "Dark Glory", there was also a phenomenal "Squid Game". Why do Korean dramas invested by Netflix often become hits? How does Korea's story and reality resonate with global sentiment?

Text | Chang Fangfei Xu Qing

Edit | Golden Turn

Operations | chestnut

The success of "K drama"

On March 10th, all netizens waited for the grand occasion of "Dark Glory 2", which is still unforgettable.

It was a Friday, and early in the morning, Little Red Book was already full of "Yeonjin, I want to kill you." At 4:00 p.m., the links of various subtitle groups and network disk resources miraculously appeared in the WeChat group. An Yu, a migrant worker, has long been unable to hold back her desire to get off work, she ordered coffee in advance and prepared to watch 8 episodes in one breath until the early hours of the morning.

It's not just the country that's lively. Thai college student Alfred followed the drama while eating instant noodles on the deadline of his thesis, and also uploaded screenshots on social platforms, "Yeonjin, I'm coming." Park Yeon-jin's actor Lim Ji-yeon felt the urgency of the audience and also played a meme on Instagram - "Yeonjin, I heard that you are going to end today." ”

▲ Figure / "Dark Glory"

So far, there are nearly 188,000 people on Douban, giving this Korean drama a high score of 9.2, and on IMDb (Online Movie Database), its score has reached 8.0, and the audience seems to feel the once accumulated wave of globalization again. This is reminiscent of the pomp and circumstance of "Squid Game" 18 months ago, the game of "One, Two, Three Wooden Man" seems to be still in sight, and earlier, there is the mournful cry of zombies in "Kingdom" through the woods, and the smiles of Hyun Bin and Son Ye-jin sitting in front of a campfire in "Love's Crash Landing".

In recent years, Korean dramas have achieved outstanding results internationally, just like K-pop (K-pop), Korean dramas are called K-drama, and together they form a Korean wave that sweeps the world.

This Korean wave seems to have been blowing from 2020. A Netflix spokesperson announced that Korean content views in Asia increased fourfold in 2020 compared to 2019. And 60% of Netflix users watched at least one Korean drama in 2022.

The sensational romantic comedy "Love's Forced Landing", which ranked in the top ten in Japan for 229 days, was the sixth most watched film; "It's Psychotic but It's Okay" broadcast in 2020 has entered the top ten of Netflix's film and television charts in Canada, Australia, New Zealand, Nigeria and Russia; The thriller "Sweet Home", four weeks after Netflix launched, attracted 22 million subscribers and also climbed to the third place on the global platform. As for "Squid Game", which raised the definition of the popular Korean drama to another dimension, a total of 111 million users around the world watched the show in the month of broadcast.

And behind these popular Korean dramas, there is actually the same promoter - Netflix. In addition to the identity of the broadcast platform, it is also the capital side of "Dark Glory".

As an international Internet company, more than 40% of Netflix's content is non-English content, and the platform's own translation program covers a wide range of languages, including those small languages, such as Farsi, Yiddish and Sanskrit.

A Netflix spokesperson once said that this is Netflix's strategy to not only create content and attract users in English-speaking regions, "most of our growth will come from outside the United States." Just like the Korean drama "Squid Game" became a global sensation, 90% of the ratings of the German drama "Dark" came from outside Germany. The European market has also been the focus of Netflix's layout, and in 2018, Netflix also set up a content production center in Madrid, Spain, investing $1 billion, accounting for one-tenth of the total content production cost that year, to produce European original content.

▲ In the fourth quarter of 2022, Netflix accounted for 41.5% of the global demand for streaming original programs. Photo / Parrot Analytics

But why did Korean dramas become the biggest winners in Netflix's global strategy? Why is this category, which was originally only popular in the Asia-Pacific region, now popular all over the world?

To some extent, Netflix and Korean dramas are mutual achievements. Previously, one of the most common production funding structures for Korean dramas was one-third for TV stations, one-third for corporate sponsorship, and one-third for pre-sale of broadcast rights to Chinese or Japanese TV stations. After 2016, without China's source of funds, South Korea was greatly affected, and it was difficult to reduce the salary, screenwriting fee, and production cost of actors, which were previously raised by China's fanatical market, and Korean dramas fell into a dilemma of not knowing where to go for a while. At this moment, Netflix, which wants to open up the Asia-Pacific market and increase subscribers, is like a "savior" who came to South Korea with money and cooperation intentions.

Netflix stepped into the field of Korean dramas around 2016. Initially, like the cooperation model between some domestic TV stations and video platforms, Korean dramas first premiered on South Korean TV stations, and then launched on Netflix a month later. By 2017, Netflix took out more money and began to participate in investment productions, such as Bong Joon-ho's movie "Okja", Netflix invested 50 million, and after the movie was released, Netflix's Korean users increased from 90,000 to 200,000.

Over the next two years, Netflix quickly opened up in South Korea. In addition to co-producing with TV stations and investing in film and television dramas, Netflix also opened an office in South Korea in May 2018, and the online time of film and television works on Netflix was slowly shortened to an hour from one month after the TV broadcast.

The Korean dramas launched by Netflix have even become a "barometer" in the secondary market of Korean film and television entertainment companies. Wanting to make money in the Korean stock market has become simple: watch Netflix's new Korean drama, and if you think the first episode is good, the show has the potential to become a hit, buy the stock of the production company. For example, last year's Korean drama "Very Lawyer Woo Young-woo", after the first episode was broadcast, the stock price of production company AStory rose for 3 consecutive weeks, more than doubling.

The success of Korean dramas has brought the most direct benefits to Netflix. In March 2019, Netflix surpassed 1.53 million subscriptions in South Korea and reached 5.14 million in 2021. In the month that "Squid Game" was broadcast, data from industry tracker WiseApp showed that Netflix's revenue in South Korea was $68 million, a year-on-year increase of 78%, and Netflix's stock price also rose, of which "Squid Game" single-handedly increased Netflix's market value by $19 billion.

This round of "Dark Glory" hit, Netflix also benefited a lot. On the day of launch, the total number of users activated by the Netflix App in Google and Apple's app stores in a single day was 4.7486 million, up 84.5% from a week ago and the highest value since May 2020.

▲ In China, the Douban score of the first two parts of "Dark Glory" is above 8.5, and the number of ratings in the second season has reached 188,000. Figure / Douban

Korean-style cool drama, global empathy

The success of Netflix and Korean dramas is also related to the methodology that Netflix has gradually formed in the three years of the epidemic. The most important of these is to give up the right to produce content independently and choose to develop content together with a mature Korean team.

Around 2019, Netflix partnered with two of South Korea's largest theater studios, Studio Dragon, a subsidiary of CJ ENM, and SLL.

CJ ENM is one of the top companies in the field of film, media and K-pop production and distribution in Korea, recognized as an entertainment empire. Studio Dragon used to be a division of CJ ENM, but it was later spun off and operated under the studio system, with close ties with the best Korean writers and directors. When Studio Dragon launched its IPO in 2017, CEO Jinnie Choi said that the company's most valuable asset was its 133 directors and screenwriters, including Kim Eun-suk, the "legendary screenwriter" who wrote "Dark Glory," and Kim Won-suk, the director who directed "Signal."

SLL has a deep relationship with JTBC. JTBC is also a comprehensive entertainment group in South Korea, mature and sophisticated in the production of film and television dramas and variety shows, "Please Refrigerator", "Xiaoli Family B&B" and "Beautiful Sister Who Often Invites Dinner", all produced and broadcast by JTBC.

It can be said that by choosing these two production companies as partners, Netflix has already succeeded more than half. Three students at Korea University in South Korea once published a paper that there are two main ways for Netflix to participate in the production of Korean dramas.

One is the joint venture system. Netflix invests 50%-70% of the production cost in both studios, in return for exclusive global broadcast rights (except for China), as well as non-exclusive broadcast rights in South Korea. From 2020 to 2023, these dramas will be launched one after another, such as "Sunshine", "Vincenzo", "Hotel Druna", etc., click on these Korean dramas, and it is likely that you will see the Studio Dragon and SLL logos in the credits.

There is also a way of cooperation that highlights Netflix's "homegrown" nature - Netflix provides about 110% of the production budget and allocates it to Korean production companies, that is, sole proprietorships. Accordingly, Netflix will acquire all the intellectual property rights and exclusive broadcasting rights, among which Kingdom and Squid Game have adopted this model.

Netflix's investment in Korean dramas is huge. Netflix Asia director Kim Min-young, a South Korean, once announced the 2021 production plan, saying that she will invest 500 million US dollars (about 3.2 billion yuan) in the production of Korean content, while Netflix's total content budget in the Asia-Pacific region is 1 billion US dollars - Korean content accounts for half, enough to see Netflix's emphasis on Korean dramas. The average production cost of Korean dramas per episode has also increased year by year, with "Kingdom" in 2019 being around $1.7 million per episode and "Sweet House" in 2020, investing $2.4 million per episode.

▲ On November 16, 2021, local time, on the Indonesian island of West Java, a shopping mall displayed wooden dolls from Netflix's TV series "Squid Game". Photo / Visual China

Around the world, it's hard for creators to meet collaborators like Netflix, who give not only money, but also freedom. Some people have interviewed many CEOs, screenwriters, directors, etc. of Korean film and television companies, and everyone's unanimous evaluation of Netflix is: respect the creator, only look at the result, do not ask about the process.

"Kingdom" screenwriter Jin Yinji once said: "Netflix gives unlimited creative freedom, and in terms of content and technology, it has not said how to do it. The production request, "I never heard Netflix say NO." Another creator mentioned that even if Netflix gave feedback, "it was only to the extent of the reference, and there was no intervention in the final presentation."

This freedom is also reflected in the subject matter of the play. South Korean TV stations are more traditional and conservative, will consider the common divisor of audience taste, and are not willing to take risks easily, but Netflix is bolder and open, preferring unconventional thrillers, horror films, etc., such as zombie-themed dramas such as "Sweet Home" and "Zombie Campus", or innovative dramas, such as "Squid Game".

Some film and television workers believe that Netflix has increased the content diversity of Korean dramas, and without Netflix's strong interest, many dramas cannot be produced in South Korea. As early as 2011, screenwriter Kim Eun-hee had already constructed the story of "Kingdom", but because of the violent and bloody plot, no Korean TV station was willing to take over, and Netflix's knock on the door made it an unexpected global hit.

More importantly, Netflix captures the uniqueness of Korean social culture, which is at the core of its production. For example, "Little Ladies", "Anna", "The Little Son of the Chaebol" and "Dark Glory", which have recently attracted a lot of discussion, contain two basic topics of Korean social formation and political ecology: class and legislation.

In Korean dramas, the struggle between ordinary people and chaebols and the game against backward laws are eternal motifs. In "Squid Game", there is the shadow of South Korean society full of bankruptcy, unemployment and division after the 2008 financial crisis; "The Young Son of a Chaebol Family" attacks how monopolistic large enterprises affect the class landscape of society; "Dark Glory" revolves around school bullying and juvenile delinquency that have plagued Korean society for decades. Cultural critic Kim Heon-si summed up the appeal of Korean work as: "The humanism in it attracts attention. ”

A more hidden factor is that Korean drama production has a shadow of Hollywood's high industrialization. Korean dramas are "screenwriter-centered system", and the status of screenwriters runs throughout, from script planning, selection of scenes, determination of directors and actors to shooting, screenwriters have a decisive right to speak. They need to understand the popular elements, know how to build character relationships, and maximize user attraction.

"Dark Glory" screenwriter Kim Eun-sook once explained his idea of writing the script - to design accurately. "We want the plot to be smart, calm and precise, like every hand of Go. 99% of the story follows the route of accurate calculations, and as for the remaining 1%, I want to go with the flow. ”

To some extent, Koreans have embraced American culture for 75 years, whether it is BTS, or the popularity of Korean dramas and Korean music, the essence is "American". "The cultural flow of Koreans creates this side branch of American culture, which we call Hallyu." Kyung Hyun Kim, a professor at the University of California, Irvine, said in an interview with The Paper.

▲ February 18, 2023, Seoul, endurance game in Netflix's new show. After films like "Parasite" and "Squid Game" helped spread Korean content overseas, high-quality reality TV shows in South Korea may become a cultural trend. Photo / Visual China

How long can Netflix still roll?

Compared with this Korean wave that has swept the world, Netflix's content influence in other regions is lackluster.

As of the end of September 2019, Netflix had 47.4 million paying subscribers in EMEA, making it the second largest market after North America. But for the average user, it's hard to immediately think of any influential local film and television works.

For Netflix, the crisis may have just begun. Just like the decade-long money-burning war of the three domestic parent video platforms, the war between Disney, Amazon, Apple and Netflix has never stopped.

Disney owns the Star Wars IP, arguably one of the most successful Hollywood franchises of all time. In addition, finding Nemo and the Iron Man series of IP also allowed Disney to survive during the new crown. Amazon Prime Video is equally powerful, with 117 million users worldwide, half as much as Netflix's 221.6 million users. At one point, more than 200 streaming services around the world competed for customers, resulting in "subscription fatigue" among consumers in North America and Europe due to too many choices.

There are more and more competitors to share the Netflix cake, and the global economic recession has made the divisible part smaller and smaller.

2022 is a watershed moment. While Squid Game attracted 1 million new users to Netflix in the Asia-Pacific region, Netflix lost more users in Europe, the United States and other regions. In 2022, Netflix's subscription churn rate was about 37%, and 200,000 users, many of them Gen Z and millennials, declined for the first time in the last 10 years.

Along with the number of subscriptions lost at the same time, there is also Wall Street love. In the six months from late 2021 to early 2022, Netflix's stock fell twice, reaching an overall decline of 64.7%. The fourth quarter of 2022 earnings report is also not optimistic, Netflix's revenue growth rate is close to the lowest value after the IPO in 2002.

Goldman Sachs analysts rated Netflix "sell" in a Jan. 10 research note with a $225 price target. Billionaire investor Bill Ackman withdrew his $1.1 billion investment, which he lost about $400 million in the deal. In a brief statement about the divestment, Ackerman said he wasn't sure about Netflix's prospects and liquidated the stock.

On the one hand, Netflix itself has fallen into decline, and on the other hand, South Korea's local TV stations are also trying to resist Netflix's reshaping of the Korean film and television industry.

Because of Netflix's huge investment, screenwriting fees, director fees, and production fees have risen again, and it is difficult for Korean production companies with insufficient capital to hire top creators, and because of the lack of investment in Korean domestic capital, most of the intellectual property rights of Korean film and television content have been pocketed by Netflix, and more film and television works and their added value have been taken away by Netflix in a monopoly posture.

Netflix has gradually become the first choice of the Korean film and television industry, creative workers, and even audiences, and some Korean dramas that have not cooperated with Netflix have suffered the lowest ratings in history. It is hard to imagine that the price of Korean dramas going global is the weakening of Korean local TV dramas. So much so that South Korea's Minister of Culture Park Pujun once said: "Most of the profits of "Squid Game" are collected by Netflix, which owns intellectual property rights." We must find a way to stop selling intellectual property rights to our content to overseas platforms. ”

In December last year, a number of Korean studios and studios launched the "Creator Alliance", determined to work to protect intellectual property rights. South Korea's Ministry of Culture, Sports and Tourism has unveiled a four-year plan that will spend $3.66 billion (4.8 trillion won) to support streaming content production.

Some of South Korea's biggest companies, such as KBS, MBC, SBS and SK Telecom, have merged two of South Korea's two largest streaming streamers, called Wavve, with 13 million subscribers, and they want the platform to become "Asia's Netflix," increasing spending on streaming content to $180 million.

Internal and external troubles continue, and Netflix is looking for ways to open source and throttle. Price changes are the easiest step to think of. Netflix has positioned itself as one of the higher-priced services compared to other OTT platforms, and in 2022, it has raised prices in regions such as the United States, with the base fee increasing from $8.90 to $9.90 per month, compared to Disney+'s $7.99 and Apple TV's $4.99, Netflix is a lot more expensive. Since the beginning of this year, perhaps in order to attract users around the world, Netflix has lowered subscription prices in more than 30 countries in the Middle East, South Africa and Latin America, such as the subscription fee in some regions from 7.99 euros to 4.99 euros.

At the same time, Netflix began cracking down on sharing accounts between users. Just as in China, people are used to borrowing an iQiyi or Tencent membership from friends and relatives, according to Netflix's estimates, about 100 million users around the world will share accounts with relatives and friends.

As early as 2019, when user growth first stagnated, Netflix noticed this behavior, but at that time, worried that banning the sharing of accounts would offend users, Netflix stood still, and even wrote the slogan "love is to share accounts". After its worst earnings report in 10 years, Netflix also knows that today is different, and in order to enhance profitability, it must ensure continued growth in the number of paying subscribers.

Early last year, Netflix began trying to ban account sharing, and some users were prompted: "If you don't live with the owner of the account, you'll need to sign up for your account to continue watching." "In this year's latest policy, users in Portugal, Spain and other places need to set a primary location for their accounts, allowing new sub-accounts for two non-living people, and people who do not live together cannot share accounts.

Like other internet companies, Netflix's layoffs are underway. From May to June 2022, Netflix announced layoffs twice, laying off a total of about 450 regular employees.

In the face of a huge market, surrounded by rivals, and a shrinking global economy, Netflix's situation at this moment is the same as Wen Dongen and Zhou Ruzheng, who stand side by side at the end of "Dark Glory" - a more difficult story may just begin.

▲ Figure / "Dark Glory"

Resources:

[1] "Kingdom" became a hit, but Netflix's road to Asia is still long

[2] Netflix makes a smart bet on the Korean drama trade.https://www.ft.com/content/1dbdd237-5e21-4f49-9a9e-0ea0171544ad

[3] How Netflix Became the Go-to Streamer for K-Dramas.https://collider.com/Netflix -k-drama-go-to-streamer/

[4] Netflix Reveals Profitability in South Korea.https://variety.com/2021/biz/asia/Netflix -reveals-profitability-south-korea

[5] Female Forward: Korean Dramas Evolve With More Women Screenwriters and Complex Protagonists.https://variety.com/2023/tv/news/women-korean-drama-series-screenwriter-success

[6] Netflix Wants You to Binge Watch More Korean Dramas - WSJ.https://www.wsj.com/articles/奈飞-wants-you-to-binge-watch-more-korean-dramas-11614239854

[7] Netflix's expansion model in the East Asian market has inspired the Chinese film and television industry. Ding Ning

[8] Netflix and Platform Imperialism: How Netflix Alters the Ecology of the Korean TV Drama Industry.https://ijoc.org/index.php/ijoc/article/viewFile/18468/3985

[9] Netflix's film and television practice and exploration of participatory communication in Korea. China TV and Film Industry Zhang Yan Lai Ying

The article is original by Daily People, and infringement must be investigated.