K-Content Shines But Domestic OTT Falls Behind

“Couldn’t we have made it ourselves?”

The K-pop-themed animated hit K-Pop Demon Hunters is creating a global sensation. After topping Netflix’s cumulative viewership charts, its original soundtrack, including the hit song “Golden,” has also dominated the Billboard charts. While the success highlights the strength of Korean content, there is a bittersweet aspect. The film was produced by Sony Pictures, while Netflix handled investment, distribution, and intellectual property rights. At last month’s Global Streaming Festival in Busan, hosted by the Ministry of Science and ICT, officials expressed similar frustrations. When Vice Minister Ryu Je-myeong asked whether Korea could have produced the film, CJ ENM Vice President Kim Jeong-han and Tving CEO Choi Joo-hee shared the sentiment. Although the film’s Korean cultural elements such as grim reapers and shamans captivated global audiences, many lamented, “If only we had made it ourselves and released it on our platform.”

In reality, domestic OTT platforms face major hurdles in producing blockbuster animations such as K-Pop Demon Hunters. According to foreign media, production costs reached about $100 million. Meanwhile, Korean OTTs are struggling to survive. First-generation OTT Watcha entered corporate rehabilitation, and Tving reports annual operating losses in the range of 100 billion won. Tving and Wavve have discussed merging to create a “national OTT,” but discussions have stalled for years.

Meanwhile, Netflix’s influence continues to grow. Netflix bears production risks and covers costs while retaining exclusive IP rights. If content succeeds, all profits from merchandise and pop-up stores go to Netflix. Domestic production companies turn to Netflix because it alone has the capital to cover rising production costs and the global distribution channels necessary for success. As a result, talented creators and good projects concentrate on Netflix, producing content exclusively for the platform, further strengthening Netflix’s financial power and control in a self-reinforcing cycle.

If this cycle continues, South Korea risks remaining in a subcontracting model, reaping the benefits of its content while Netflix captures the rewards. Domestic OTTs need to act urgently. Accelerating merger discussions is critical. While combining Tving and Wavve will not solve all problems immediately, reducing duplicate costs could expand investment in content. A larger scale could enhance bargaining power against Netflix and create opportunities to compete globally. Joint investment in promising projects with shared IP, through an “IP Sovereignty Fund,” is also worth considering. The Korea Chamber of Commerce and Industry recently noted that none of the top 50 global IPs are Korean and emphasized that creating a second K-Pop Demon Hunters phenomenon domestically is a top priority. They recommended establishing an IP sovereignty fund and a system for joint investment and shared rights between production companies and platforms.

If Korean production companies and domestic OTTs cannot produce the “next K-Pop Demon Hunters” themselves, the global success of K-content will continue to be someone else’s celebration.