Foreign video streaming services such as Netflix and Disney+ are exerting significant influence on compensation for Korean actors, contributing to a surge in industry costs. (Image courtesy of Yonhap)
SEOUL, Dec. 6 (Korea Bizwire) – Foreign video streaming services such as Netflix and Disney+ are exerting significant influence on compensation for Korean actors, contributing to a surge in industry costs. With deep pockets, these platforms are actively acquiring top-tier actors and premium content.
Reports indicate that Lee Jung-jae is poised to command approximately 1 billion won per episode for his role in Season 2 of the Netflix hit “Squid Game,” while Kim Soo-hyun reportedly secured 500 million won per episode for the Coupang Play series “One Ordinary Day.”
Indigenous streaming services find themselves grappling with a considerable financial disparity. Industry insiders have pointed to a “ridiculous” spike in lead actors’ salaries, primarily attributed to the influence of foreign content providers, as a key factor driving up production costs.
According to insiders, the appearance fees for Netflix and Disney+ productions are more than twice as high as those of traditional broadcasters. A prominent actor engaged in a Disney+ project, for instance, was reportedly compensated 400 million won per episode.
The root cause of this discrepancy lies in the divergent revenue distribution structures of each platform. While conventional movies and TV shows prioritize minimizing production costs to optimize revenue, the dynamics differ for streaming services. Taking Netflix as an example, the platform allocates a percentage of production costs as revenue to the production company, incentivizing higher net production costs to secure more substantial payments.
Paying actors more becomes the easiest strategy, as production companies have little incentive to negotiate cost savings. Furthermore, successful movies can lead to lucrative contracts for actors’ subsequent projects with Netflix, and in some instances, the platform provides additional payments for starring roles.
A recent report from the National Assembly’s National Audit Office revealed that lead actors typically receive over 100 million won per episode, with some securing up to 200 million won. However, foreign productions far exceed these figures.
Netflix and Disney+ boast a massive subscriber base, enabling them to pay actors more compared to domestic streaming services. The global reach of these platforms also mitigates box office pressures faced by local streaming services, allowing them to allocate substantial sums to actors.
Representatives of domestic streaming companies lament the challenge of competing with Netflix’s higher production costs due to their limited subscriber base. Consequently, they are forced to reduce the number of episodes to manage escalating actor salaries.
Meanwhile, reports indicate that South Korean companies TVing and Wave are contemplating a merger to streamline production costs and enhance competitiveness against Netflix. While this merger would position them as the second-largest streaming service in Korea, the potential for synergy remains uncertain due to content overlaps.
Ashley Song (ashley@koreabizwire.com)
