Netflix Korea revenue surpassed 1 trillion KRW for the first time last year, yet 81% of these earnings were remitted to the US headquarters, leaving the local subsidiary with a modest operating profit of 20.3 billion KRW.
As homegrown online video streaming services (OTT) continue to struggle with mounting deficits, ongoing controversies surround whether the immense profits driven by the massive success of K-content are sufficiently trickling back to domestic production companies and the local industry.
Surging Revenue and Overseas Remittances
According to an analysis of the Netflix Services Korea audit report released by lawmaker Han Jun-ho of the National Assembly’s Science, Technology, Information, Broadcasting, and Communications Committee, Netflix’s domestic revenue last year hit 1.0542 trillion KRW.
This represents roughly a 1.7-fold increase over five years compared to the 631.7 billion KRW recorded in 2021, successfully breaking the 1 trillion KRW milestone for the first time. However, out of last year’s domestic revenue, a staggering 853.9 billion KRW was funneled back to the US headquarters, Netflix Inc., under categories such as subscription membership purchase fees. This accounts for a massive 81.0% of total domestic sales.
Consequently, the local subsidiary’s operating profit last year lingered at 20.3 billion KRW, resulting in a thin operating profit margin of just 1.9%.
Struggling Domestic OTTs and Market Dominance
In stark contrast, domestic OTT platforms remained trapped in persistent financial losses. Last year, TVING posted an operating loss of 69.8 billion KRW, while Wavve recorded an operating loss of 12.2 billion KRW.
Netflix also maintained a dominant lead in market usage rates. According to the Korea Communications Commission’s 2025 Broadcast Medium Usage Behavior Survey, Netflix’s paid subscription usage rate stood at 46.7%, which is more than three times higher than the second-place competitor TVING at 13.0%.
The Debate Over K-Content Profit Distribution
Criticism has also mounted regarding the fair distribution of profits generated by K-content. Lawmaker Han pointed out that for Netflix original content, the platform frequently secures the intellectual property (IP) rights, while production companies typically receive only a narrow 3% to 10% profit margin based on production costs.
Under this current structure, even if a title achieves massive global success, local production houses struggle to secure additional revenue proportionate to the actual performance and impact of their work. Lawmaker Han emphasized, “It is K-content that propelled Netflix to the number one spot in Korea, and responsibilities matching its immense market influence—such as additional compensation tied to box-office success—must naturally follow.”
