Netflix comments on K-drama budgets and investment infrastructure

According to recent industry reports, Netflix has put a cap on actor's fees at a maximum of 400 million won per episode, signaling changes in the production cost structure.

Since the rise of the OTTs, production costs for K-dramas have skyrocketed. Previously, the average production cost per episode of a Korean drama was around 300 to 400 million won. However, after Netflix's entry into the market, this figure surged to 2 billion won.

This sharp increase is largely due to star actors transitioning to OTT platforms, leading to a steep rise in cast fees. In fact, Netflix’s original series When Life Gives You Tangerines reportedly had a production budget of 60 billion won, while the upcoming Squid Game Season 3, set to premiere on June 27, is said to have a budget of around 100 billion won. 

This sharp rise in production costs has become a significant challenge for local production companies. As a result, the number of K-dramas being produced is on the decline. 141 dramas were produced in 2022. The number fell to 123 in 2023 and to around 100 in 2024. This year, the figure is expected to remain at approximately 80.

Compared to foreign markets, Korean actors charge notably high. In case of Japanese dramas, lead actors in Netflix originals receive an average of 10 million yen (approximately 93 million won) per episode, which is 3 to 10 times lower than what top Korean actors charge per episode.

Regarding the speculation about a 400 million won cap on actor fees, Netflix released an official statement on the afternoon of June 9, stating, "We calculate budgets in proportion to the 'scale of ambition' of each project, and budgets vary depending on the genre and format," adding that it is making "responsible investments."

However, it avoided commenting on specific standards for fees, implying that there is no fixed or uniform guideline. Meanwhile, the issue has also expanded into concerns over the treatment of background actors.

According to testimonies recently shared in online communities about the working conditions on the set of When Life Gives You Tangerines, some background actors and crew members were mistreated and were forced to work under harsh conditions. Despite the project being a big-budget production with hundreds of billions of won invested, there has been growing criticism that background actors were treated significantly worse compared to the leads. 

While Netflix has not provided a clear-cut answer on whether a 400 million won cap on appearance fees has been officially implemented, the introduction of such a limit is expected to help curb the hindrance on domestic production companies and contribute to greater diversity in content.

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