(Photo by Chloe Lee)
Two decades ago, a 40-year-old local sat in a Seoul comic book cafe, suffocated by his poverty. Despite graduating from two prestigious universities for film production, his films repeatedly culminated in commercial disappointments, leaving him with empty pockets and a crippling debt. After much contemplation, the man made up his mind to sell his only possession: his laptop.
The $675 fortune brought him a brief period of relief, providing enough for takeout food. Every night, he added to a script he believed would change the world. He pitched this script to countless domestic production companies, but was met with rejection every time. This man was Hwang Dong-Hyuk, and his rejected script would eventually shake the world with the hit “Squid Game.”
In 2019, Netflix saw the script’s potential for success, believing the burdens of class struggle, poverty, and systemic exploitation would resonate with the world. The year 2021 marked the date of the drama’s season one debut, generating an estimated $900 million for Netflix. The series’ profit from the next season reached 1.5 trillion won at minimum, a $1 billion equivalent; and the third season would see an even bigger success, surpassing $11 billion in revenue. One would assume such a major success for Netflix guaranteed an even greater success for Hwang. But according to an interview with The Guardian, Hwang said, “I’m not that rich,” but he can comfortably afford meals now.
Yes, the global success of Squid Game fished him from his impoverished state, but shouldn’t the creator of such a major global hit be able to afford more than a takeout dinner? Shouldn’t he be thriving as part of Korea’s wealthiest elite? This rollercoaster of a story raises several big questions here. How many untold stories are like Hwang’s? How sustainable is the Korean drama industry for the people creating the dramas? And most importantly, how does Korea continue to create such large-scale and addictive series, while the people actually making them are barely scraping by?
Paycheck Patterns
From a broad perspective, Korea seemed to be winning in the 2000s. A-List stars became household names in Korea and abroad. Korean celebrities began to attend the most prestigious award ceremonies, including the Grammys and the Emmys. Broadcasters were able to project to a significantly larger, global audience. Yet the money behind the scenes of the industry told an entirely different story. Even when independent production companies emerged in the 2000s, they only received a fixed production fee to cover the budget and a thin margin, but it remained unlikely towards long-term profit.
While budgets substantially grew in the 2010s, crews were exhausted, salaries for screenwriters barely changed, and independent production companies teetered on the verge of collapse. Only major TV networks, A-List actors, and the top 1-5% of elite screenwriters received major profit from projects, while the people actually creating the drama received little benefits, regardless of how big of a hit the drama was.
The “Netflix Trap”
When Netflix first entered the K-drama streaming market in 2016, independent production companies were skeptical, dismissive, and refused to forfeit their IP rights. However, in the following years, Korean networks realized the incredibly high budgets Netflix possessed. Netflix became licensed buyers in order to stream the dramas, drastically raising average production costs per series. It seemed as though Netflix was a helper to the industry, while Korea continued producing highly-rated domestic dramas. But when Korean dramas began to attract global audiences, Netflix decided to stop renting out dramas, and instead fully purchase the IP.
From that point on, Netflix started to commission K-dramas rather than simply standing by as a licensed buyer. In 2019, this decision proved to be a major success. Netflix released its first K-drama, “Kingdom” (2019), a zombie mystery thriller, generating tens of millions in revenue for the company. Other dramas in a similar situation include “Squid Game,” “All of Us Are Dead,” and “The Glory.” Netflix stamped these dramas as “Netflix Originals” despite being fundamentally created by Korean producers and screenwriters.
Around this time in Korea, strict broadcasting payment laws strained the profits broadcasting companies could gain from dramas, even if it were a major success. As a result, domestic broadcasting companies began to lose competing ground against Netflix, no longer leveraging a financial advantage.
Many desperate screenwriters in Korea sought to make their dramas seen, with more turning to Netflix. Such was the case for Hwang, who forfeited his IP rights amidst economic disparity. Like Hwang, many underpaid screenwriters realized their series could be more ambitious due to the upfront payments and larger budgets Netflix offered.
But within years, production budgets grew so large that most Korean producers could not afford to take big, creative risks if they wanted to earn a steady and manageable income. Instead, they pitched standard scenes, typical yet relatable themes, and safe storylines. As a result, creativity began to disappear altogether in the Korean drama industry, making authentic originals like “Squid Game” less common- and part of the reason why the show was such a massive global hit.
Today, the number of international streaming platforms commissioning and launching their own original K-dramas only increases. On the surface level, the industry appears to be booming, but over time, Korean producers have fallen into this cyclic trap of sacrificing IP rights and long-term profit for short-term financial security, of investing a lot, but in reality, receiving very little. As of now, the ball is in Korea’s court; will they return to perfecting their storytelling formula or continue to surrender their creativity at the expense of short-term profit?
