The film was a global box-office smash—
but where did the money go?
In spring 2026, Korean dramas commanded the broadest viewership territory in history. Yet the revenue generated from that territory did not go to those who created the content. What defined the Korean drama industry in March was not the buzz surrounding a new release, but rather the fact that the “structure where even commercially successful shows yield no profit” had finally begun to be confirmed by hard numbers.
On the surface, Korean dramas in spring 2026 appear to be flourishing like never before. Over the past five years, 210 Korean titles have ranked in Netflix’s Global Top 10, and 60% of Netflix subscribers have watched at least one K-content title. The domestic content industry’s market size has grown from approximately ₩151 trillion in 2023 to around ₩170 trillion in 2025. Its reach has clearly expanded.
Yet the ledgers of the production sites that cultivated this territory tell the opposite story. During the same period, the income statements of companies directly producing dramas were awash in red ink. This rift between the statistical “bumper harvest” and the reality of a “crop failure” is the sharpest dividing line within the industry in March.
The first source of the crack is cost. The average production budget per episode of Korean dramas has risen to around 3 billion won, with tentpole series reaching 7 billion won per episode, and total production costs for a single work now commonly ranging from 50 billion to 70 billion won. The bulk of the cost increase is concentrated on stars. The per‑episode fee for lead actors has surged to 300–400 million won, and in extreme cases, figures as high as 1 billion won per episode have been mentioned.
The problem lies in the fact that this surge in production costs is not recouped as revenue. Amid the “production-cost inflation” triggered by globally dominant OTTs leveraging their financial clout, production companies typically receive only a limited margin of around 10–20% under a “cost-plus” arrangement—and surrender core intellectual property (IP) rights to the platform. Industry insiders report that guaranteed margins have even dropped to as low as 5–7%. While revenues grow with each new title produced, even when a work achieves global box-office success, the lion’s share of the profits flows to the party holding the IP.
This structural contradiction became visible in the spring of 2026 through the financial performance and stock prices of publicly listed production companies. Studio Dragon, the leading production company, reported first-half revenue down 24.6% year-on-year to KRW 248.3 billion, operating profit plunging 95.6% to just KRW 1.4 billion, and net income turning into a loss. Its acquired subsidiaries also incurred consecutive losses, further increasing its burden. Its stock price fell roughly 20% from the start of the year, while another production company, A Story, slid approximately 30%.
The programming landscape itself has also narrowed. As broadcasters cut back on drama slots due to deteriorating profitability, terrestrial and cable broadcasters—excluding tvN—have effectively eliminated all but one mini-series slot. Consequently, the number of domestically produced dramas is projected to decline from around 123 titles in 2022 to approximately 107 by 2026. The era of “surviving through volume” is coming to a close.
Why now, of all times? 2026 marks the expiration year of Netflix’s Korean investment plan—announced in 2023—that pledged $2.5 billion (approximately 3 trillion won). This is precisely when investments made over the past two to three years—after lengthy production cycles—will begin rolling out en masse, yet no follow-up commitment is in sight. Although Netflix has repeatedly stated it “has never halted investment and there are no changes to its future plans,” the perception has solidified that the industry’s very fate hinges precariously on the wallet of a single platform.
Thus, the industry’s focus has shifted from “exports” to “production hubs” and “IP sovereignty.” Analyses showing that production companies’ operating profit margins can expand into the mid-teens when they hold more than 50% of an IP’s equity support this direction. Cases that have combined virtual production (VP) with AI to compress production timelines by over 30% ultimately reflect a struggle to move away from “subcontracting reliant on others’ capital” toward “production that builds our own assets.”
Of course, there are counterarguments. Some point to statistics showing that the number of films produced dropped to 80 in 2024 but is projected to rebound to 85 in 2025 and 104 in 2026, arguing that the current crisis is merely a healthy correction aimed at eliminating oversupply.
Yet a rebound in production volume does not automatically translate into restored profitability. The question left by the Korean drama industry in March 2026 is clear: if we create the world’s most-watched content while the creators themselves grow poorer, that prosperity is borrowed prosperity. Expanding the territory of box-office success and reclaiming the ground beneath that territory are entirely distinct challenges—and this spring, arriving without resolution to the latter, signaled that K-dramas must shift their central question from “How well do we make them?” to “Who reaps the rewards?”