Netflix (NFLX) will invest $2.5 billion in South Korean films and television shows over the next four years, according to Yonhap News Agency, a major South Korean news organization. The announcement came as Netflix co-CEO Ted Sarandos met with South Korea’s president Yoon Suk Yeol in Washington D.C., as part of the president’s six-day trip to the U.S., which began yesterday (April 24).
The announcement comes on the heels of Squid Game, the South Korean drama series that stands as the most viewed Netflix show by hours watched. The investment is twice what the company has spent in the country since 2016, according to the report.
“We were able to make this decision because of our great confidence in the Korean content industry, and we’ll continue to make great stories,” Sarandos said in a speech, according to Yonhap News.
South Korean entertainment has gained international attention in recent years. K-pop bands BTS and Blackpink have found fanbases in the U.S., with Blackpink headlining the Coachella music festival in California this year. Netflix offers a handful of South Korean series in addition to Squid Game, including Physical 100 and All of Us Are Dead. The streaming giant seems to recognize the popularity and potential returns for South Korean entertainment, which could further set it apart from its competitors.
The revenue returns for Korean television could be huge. Squid Game reportedly cost Netflix $21.4 million to produce, or $2.4 million per episode, which is a fraction of what the company’s other hit series like Bridgerton and Stranger Things cost. The Squid Game series is reportedly worth $900 million, an increase of more than 40 times what Netflix spent.
Earlier this month, the company announced it will release 34 Korean films and television shows in 2023, up from 15 in 2021 and 25 last year. More than 60 percent of all Netflix subscribers, or 140 million account holders, watched Korean titles in 2022, according to the company.
Netflix has been investing in Korean films and shows for seven years. From 2016 to 2020, the company paid $700 million for K-content, Bloomberg reported. In 2021, the year Netflix released Squid Game, it committed $500 million to the Korean market. The company reportedly spent $700 million last year, so the newest investment is in line with what Netflix has spent over two years.
Sarandos is also continuing Netflix’s spending in India, one of the company’s fastest-growing markets. The 2022 year was Netflix’s best year in the country, with content viewership up by 30 percent and revenue up by 25 percent, he said at the Economic Times Global Business Summit in February. While Sarandos said India would receive a large portion of Netflix’s $17 billion content budget, he didn’t clarify how much that would be.