How Netflix Ruined Korean Dramas Forever | AB Explained

0:02 In 2009, there was a 38-year-old Korean man sitting in a tiny room in Soul, staring at the laptop he had been writing a script on. He was totally broke, buried on the loans, and he had to find a way to pay his rent and cover basic living costs. The laptop in front of him was pretty much the most valuable thing he owned at the time, and he realized he had no choice but to sell it just to pay his rent and survive. His life wasn't supposed to turn out like this because he had taken all the right steps as a filmmaker. He studied communications at Soul National University, then earned a master's degree in film production from the University of Southern California School of Cinematic Arts, one of the most prestigious film schools in the world. But for some reason, this one script he had developed and became obsessed with just didn't resonate with any producers or investors, and it kept getting rejected. People in the industry kept telling him it was too dark, too

1:02 strange, and too unrealistic to be ever made. So he sold his laptop, his main writing tool at the time, to make ends meet [music] and moved back in with his mother and grandmother, thinking it would be a temporary step back while he figured things out. But it didn't turn out to be so temporary. For roughly the next decade, that script sat on the sidelines, passed over and dismissed while he kept believing in it enough to revisit and reshape it whenever he had the chance. His name was Tongya Kuang. And that script, first written in 2009 and rejected for almost a decade, would eventually be picked up by Netflix. And Squid Game would go on to become one of the most watched series in the platform's history and help push Korean dramas onto the global stage. But here is the part almost no one talks about. How much did Huang, the creator of Squeak Game, a series that reportedly generated close to $900 million in revenue for Netflix, actually make from

2:02 the first season? It's not clear from the public record exactly how much, but what is clear is that he received essentially a one-time fixed fee as creator and director with no royalties and no meaningful share of the IP he had been fighting for over 10 years to get made. In interviews, he's been clear about this. Squid Game didn't make him rich. Netflix gave him a shot when no one else would, and it allowed him to make a living, [music] which is something, but the life-changing upside went somewhere else. Hang since renegotiated with Netflix for the second and third seasons of Squid Game, [music] and he's now in a far stronger financial position, but his original deal is still representative of the cracks in the glossy surface of the Korean drama Miracle. From the outside, it looks like Korean dramas are entering a golden age and sliding into the vacuum left by Hollywood struggles. Shows like Crash Landing on You, E101 Class, and Goblin are titles almost every Kdrama [music]

3:03 fan recognizes, and Korean actors are now showing up everywhere from cans to [music] the Emmys. But what if I told you that based on our research and conversations with people working inside the industry, the mood behind the scenes is very different. Budgets are ballooning up. Many production companies are struggling on the mounting debt and cash flow problems and writers in many cases are actually earning less now while working longer hours than they did a decade ago. So, how does Korea keep pumping out some of the most addictive drama series on the planet while the people actually making them are barely hanging on? Let's dive in. Because by the end of this video, you might not be so sure the so-called golden age of Kdrama is actually sustainable. though there could be a way out. [music] Before we get to Netflix and Squid Game, we have to understand the secret formula of Kdrama and what makes it so addictive, [music] which might not be so secret if you're a Kdrama fan because it

4:06 often feels like it's always the same story. A successful and good-looking CEO falls for an ordinary girl. nasty in-laws, childhood trauma, crazy twists in the final episodes that suddenly justify all the revenge. But one thing you can't argue with is the result. These shows are ridiculously easy to get hooked on. You finish one episode and they just make you check out the next. You say to yourself, "Hey, I'll just watch the beginning of the next episode and then go to sleep." [music] Next thing you know, you've watched the whole damn series for 16 hours straight and you're wrecked at 4:00 a.m. Hey, I'm guilty of it. The idea of binge watching in Korea existed long before Netflix popularized the term. And South Korea has been quietly building and perfecting one of the most effective storytelling machines in the world for decades. One thing I've noticed, as I'm sure hardcore Kdrama fans have too, is that they seem to always stick with the 16 episode

5:06 format, I'm not talking about the recent Netflix [music] style Kdramas, but the traditional broadcast Kdramas that defined the genre for years. I'll come back to this specific format shortly, but from our research, it didn't used to be that way. [music] In the 1970s and 80s, Korean TV was dominated by long neverending family and countryside sagas. Shows like Country Diaries, which holds the title of the longest running Korean drama of all time, ran for over 20 years and more than a thousand episodes. The Country Diaries would just follow villagers through their everyday joys and hardships. And the series trained a whole generation of Korean viewers to live with characters over time and actually care about small emotional beats. Who shares a meal with whom? Who holds a grudge? Who swallows their pride? Then in the 1990s, the big three public broadcasters in South Korea, KBS, NBC, and SBS started experimenting with a shorter fixedlength miniseries in prime time. These usually

6:12 aired twice a week and some experimented with 20 and even 24 episodes, but viewers didn't seem to mind. A huge portion of the Korean population would tune in and be glued to their TVs, eagerly waiting for each new episode. Shows like First Love on KBS pulled ratings that peaked around the 65 to 66% range nationwide. Numbers that are basically unimaginable today. For comparison, with cable, streaming platforms, and smartphones dividing everybody's attention today, most new dramas on Korean public TV channels are fighting over ratings in the low single digits. And hitting even 10% now feels like a once-in-a- miracle. Anyway, putting that crazy 1990s popularity aside, 20 plus episode series were expensive to produce and tended to sag in the middle. The pace dragged, plots stretched just to fill airtime, and audiences start to lose interest. At the same time, costs were going up, and competition was getting tougher. So, those runs started shrinking gradually,

7:20 and 16 episodes quietly emerged as the sweet spot, at least for weekday [music] miniseries. Just long enough to make you deeply attached to the characters, just short enough to feel tight. But there was also an economic reason for the 16 episode format. Korean broadcasters [music] wanted a structure that fit neatly into an 8-week advertising cycle, airing two episodes per week, so advertisers could lock in their buys with predictable ratings. This consistency meant broadcasters could pre-sale ad slots for the entire run before the first episode even aired. In other words, the [music] format wasn't just a storytelling sweet spot. It was an economic machine designed to keep money flowing steadily. Here's the breakdown of the emotional arc or rough blueprint of most classic 16 episode Kdramas. The first four episodes set up the world and hit you with the core hook, the big what is this show really about moment. Whether that's

8:18 a shocking incident, a high concept premise, [music] or a memorable first encounter between the leads that makes you want to see these two people together or apart, the next four episodes are where you really start to live [music] with the characters, sharing their routines, seeing their flaws, watching relationships deepen [music] while new secrets quietly get planted. Episodes 9 to 12 twist a knife with betrayals, separations, [music] and reveals at a point where you're already too emotionally invested to walk away. [music] And the final four episodes are all about payoff and catharsis, confessions, justice, forgiveness, or at least some kind of emotional release. The emotional climax usually hits somewhere around episodes 14 or 15 with a major reveal or final big conflict and the very last episode usually focuses on tying up loose ends, resolution and aftermath. Of course, not every show follows this perfectly, but once you notice the pattern, it's kind of hard to

9:20 unsee. And for viewers, this created an emotional full circle. If you invest in the story, it'll actually end. No endless seasons or five season cliffhers. 16 episodes and that was it. So that's the secret episode format. But there's another layer to this, a kind of emotional code that's very specific to Korea. Korean dramas are built on two ideas that don't really have direct English equivalents. The first is a concept of ch, a deep sticky affection or emotional bond that forms slowly between people who share everyday life together. co-workers who always eat at the same table, neighbors who bicker but show up with soup when somebody gets sick. It's not just romance, it's the feeling of these are my people. The second is a concept called Han, a kind of compressed sorrow and resentment that never fully goes away. Characters carry old wounds, a ruined family, a humiliation they cannot forget, a debt they didn't deserve. Kdramas stretch those feelings

10:27 out. Instead of rushing to the twist, they make you live with the characters day after day until the apology, the confession, or the revenge finally explodes many episodes later. That's why the payoff feels so intense. The burden starts to feel like your burden, but the real secret weapon of Kdramas was the way they were made. Unlike in the US where most episodes are written and shot before they air, many Korean dramas were going out on TV while they were still being filmed, episode 1 and two would be on air while episodes five and six were shooting and the finale was still being rewritten. That meant audience reaction could actually change the show. It wasn't real time in the social media sense, but if ratings dipped, everybody knew by the next morning. If viewers fell in love with a side character, that character's role could suddenly expand. If a subplot tanked, it might quietly disappear. The whole system was a brutal

11:29 feedback loop where writers and crews worked insane hours, but the story kept bending itself towards whatever made audiences feel the most. Terrible for sleep, great for engagement. By the early 2000s, this welloiled storytelling machine was ready to leave Korea. The first big breakthrough came with Winter Sonata. It was just a melancholy love story with amnesia and lots of snow. But when it aired on NHK in Japan, middle-aged viewers feel so hard for it that they bought DVDs and soundtracks and even flew to South Korea to visit its filming locations, including the now famous Lakeside Bench. It proved that this storytelling style could resonate far beyond Korea. The long emotional arcs, the moral clarity, the mix of everyday detail and melodrama. By the late 2000s, people weren't just talking about individual hit shows anymore. They were talking about the whole Korean wave itself. Kdramas together with K-pop and Korean films had become a full-blown

12:32 export industry and a deliberate soft power tool for South Korea. So from the outside, it looked like everyone was winning. Broadcasters had hit shows that could sell abroad. Stars and a few famous writers became household names across Asia. Korea's image was transformed from a wartorrn country into a sleek modern culture factory. But under the hood, the money told a very different story. The big three TV networks and a few major distributors usually own the rights to the shows because they were the ones commissioning and scheduling them. By the 2010s, independent production companies were being outsourced to make most of the Korean dramas, you know, and they were generally paid a fixed production fee to deliver each series. Enough to cover the budget plus a thin margin, but not a ticket to long-term profit. Here's what's interesting. Those production houses would often surrender long-term rights to the show as part of the deal in exchange for securing financing and a

13:34 guaranteed fee paid out in stages during and right after production rather than gambling on a future back-end income they might never see. In that environment, the idea of revenue sharing or residuals for most creators barely existed as a norm. This meant writers had to be paid per episode, not per success. In a typical setup, the main writer would get a per episode script fee and assistant or junior writers working under them would get a much smaller cut. Industry reporting before the Netflix boom describes assistants earning around 400,0001 per episode, roughly $300 at the time for grueling live shoot schedules. And grueling is not an exaggeration. The live shoot system routinely forced crews to survive on two or three hours of sleep with writers rewriting scenes overnight and actors pushed through such punishing timets that fainting or hospital visits were not uncommon. There were documented onset accidents, production delays, and

14:38 entire finales that visibly collapsed in quality because everyone involved was simply out of energy. Many had to get IV drips to fight exhaustion. Most writers and creatives were paid barely above minimum wage for brutal hours and endless nights. And only a tiny group of superstar writers and A-list actors had the power to negotiate big paychecks. Most importantly, almost nobody in the creative process, even the stars, actually owned the underlying intellectual property or IP that kept making money long after the show ended. overseas licensing, reruns, almost all that IP money flowed back to the big broadcasters and a handful of major distributors, unless an independent production house was large enough to negotiate some revenue share. The vast majority were not, and they were often just thankful to be chosen for work at all. That was the unfortunate reality of the Korean drama industry. And by the early 2010s, this entire model was already cracking. Production companies

15:43 were barely surviving. Writers were exhausted. The live shoot system created constant chaos and broadcasters despite owning all the IP were tightening their budgets. Even when cable giants like TVN and JTBC entered the market and pushed [music] production budgets higher, loss censorship and experimented with more cinematic storytelling, the fundamental pay model for most writers and production crews barely changed. The broadcasters, public or cable, still on the rights, and the people actually creating the dramas, still weren't seeing any meaningful upside when shows like Crash Landing on You or Reply 1988 became mega hits. In 2016, Hanbbit Lee, a young assistant director at TBNN, actually took his own life. He left a note exposing that despite the prestige of the cable channel, the crew was being worked for 20 hours a day, abused, and fired if they didn't comply. His death revealed that the cool modern cable networks were running the same sweat shop labor practices as the old public

16:50 broadcasters. So, when a new global streaming player called Netflix came along, most of the Korean industry didn't really think much of it. Netflix was already disrupting DVDs and cable in the US, but in Korea, it looked like a harmless foreign buyer licensing a handful of Korean titles. Korea still had strong domestic ratings, powerful cable channels, and a whale oil drama machine. No one imagined that Netflix would someday compete directly with Korean broadcasters themselves. At first, Netflix did play it safe by simply licensing existing Korean dramas to test the waters and see how international viewers responded. But as soon as it became clear that Korean storytelling translated globally and draw real engagement, the calculus completely changed. Why rent Korean content when you could commission it directly and own the IP outright? And it's in that context that the creator of Squid Game finally sold his strange survival story to Netflix that Korean

17:55 broadcasters had rejected for years. By commissioning Squid Game, Netflix got to keep the IP for itself. And that decision didn't just launch a global hit. It rewired the economics of the Korean drama industry forever. In 2020, something happened that almost no one in the global media industry or anyone else for that matter thought was possible. The world went into lockdown due to the CO9 pandemic and for the first time in modern history, the global content machine stopped except in a few places around the world. And one of those places happened to be South Korea. That timing is important because Netflix had actually entered the Korean market before the pandemic. It launched service

18:44 in Korea in 2016 and started licensing local Korean shows. At that point, Netflix was still just one more player in the Kdrama ecosystem. Ann knowing to some big Korean broadcasters, exciting to some Korean creators looking for opportunities, but not yet the center of gravity. But why was it annoying to the Korean broadcasters? Because Netflix was doing something that the broadcasters themselves had never been able to do. Making Korean content instantly available to a global audience without waiting for regional licensing deals to close. When a drama aired on KBS or TBN, it might take months or even years to reach Japan, China, or Southeast Asia, if it ever got picked up at all. Netflix could drop a show simultaneously in 190 different countries. That meant Korean broadcasters were suddenly competing not just with each other for domestic ratings, but with a foreign platform that had deeper pockets, no legacy infrastructure cost, and a global distribution machine they just couldn't

19:48 compete with. At first, the relationship was almost symbiotic. Netflix was able to license all the Korean dramas for a fraction of what they would cost today. shows that had already aired on Korean TV and recouped most of their costs through domestic ads and sponsorships. Korean broadcasters were cool because they got easy extra revenue from a foreign buyer and Netflix got a library of proven content to fill out its Asian catalog. Actually, I should make it clear that Korean broadcasters were more than happy to license their drama to anyone at that point because the timing couldn't have been worse. In 2016, China, Korea's single largest overseas buyer of Kdramas, effectively banned most Korean entertainment after the THAAD missile dispute. THAAD is a US anti-missile defense system that Korea agreed to host, and China saw it as a national security threat. Practically overnight, Korean dramas, concerts, celebrities, and media disappear from

20:49 Chinese platforms, and Korean broadcasters lost hundreds of millions of dollars worth of potential licensing revenue. Netflix suddenly became one of the few global buyers left willing to pay real money for Korean content. But as those licensed shows started driving serious global engagement, Korean broadcasters and distributors realized they had been underpricing their content. They started raising licensing fees and playing hard balls in negotiations, trying to capture most of the values Netflix was clearly extracting from their libraries. So Netflix looked at the dynamic and made a strategic call. They knew that Korean broadcasters would keep demanding higher licensing fees and it would eat into their margins and budgets. Not to mention they'll be held hostage to a content library that belonged to someone else. That's when Netflix changed its model from licensing partner to commissioning platform for Korean content. Instead of buying finished

21:49 shows, Netflix started greenlighting originals fully financed, branded as Netflix originals with IP locked out from day one. I didn't know this before I looked into it, but Kingdom, the zombie historical thriller that dropped in 2019, was actually the proof of concept for Netflix, a big budget Korean drama that was entirely financed by and belonged to Netflix globally and could never be sold to a competitor. For Korean broadcasters and distributors, it was the beginning of losing control over their own industry's future. When CO shut down productions in North America and Europe, Netflix suddenly needed fresh bingeable content that could travel globally. Remember, by this point, they had already validated their thesis that Korean originals would work. You see, South Korea had managed to keep sets operating under strict health and safety protocols, mandatory testing, contact tracing, control bubbles, and quarantine systems that allowed production to continue at a reduced

22:53 capacity. Here was an advanced production hub with professional crews, disciplined live shoot systems, and a proven track record of exporting stories. In other words, exactly the kind of machine you would want to feed a global streaming giant when the rest of the world was stuck at home desperate for content. And boy, did Netflix have the cash to make it happen. Before Netflix, a typical prime time Korean drama might cost somewhere around $3 to5 million to produce for full 16 episode series. That budget covered everything, cast crew locations and post-prouction. Broadcasters would finance most of it through a mix of advertising commitments and their own capital. and producers would deliver the show for a fixed fee that left them with maybe a 10 to 15% margin if they managed costs well. As Netflix and later other global and domestic platforms began commissioning originals, they weren't bound by traditional broadcast scheduling slots or the two episodes per

23:57 week rhythm. They could drop entire seasons at once and they cared more about total watch time and engagement than fitting neatly into a broadcaster's grit. So episode counts started to vary. Some Netflix originals shrank to 12, 10, even eight episodes depending on the story and the deal. By the early 2020s, the standard 16 episode format was no longer automatic. It had become just one option among many. Netflix also changed the math on budgets entirely. They started commissioning Korean originals with budgets in the 20 to $30 million range, sometimes higher, meaning a single Netflix series could cost 10 times more than a typical 16 episode broadcast drama. Netflix also paid 100 to 110% of production cost upfront, sometimes more, which meant producers no longer had to scramble for co-inancing or beg advertisers to commit early. The money came in milestone payments during production and right after delivery. That years later when overseas licensing

25:03 finally closed. Meanwhile, Korea's strict advertising regulations capped how much domestic broadcasters could earn per episode, regardless of how big a hit the show became. So, there was simply no mechanism for Korean broadcasters to raise more money to compete with Netflix's budgets since Netflix faced none of those restrictions. For Korean producers and creators used to operating on razor thin margins, this felt transformative. Here's the math. If Netflix commissions a show with a $25 million budget and the production company negotiates a 12% producer fee on top of that budget, that's an additional $3 million in revenue just for delivering the show. And if you could line up multiple Netflix projects back to back, you could finally start building a real business instead of just surviving project to project. At first, Korean producers were blown away by the offers. But the more they deliver successful projects and built credibility, the more they

26:05 realized they could pitch bigger, more ambitious concepts. And usually Netflix would greenlight them, especially if the project involved star talent or high production values. Why? Because Netflix knew it could make far more money by owning the IP and everything that came with it. Global streaming rights, remake potential merchandise spin-offs format sales, basically any revenue stream that comes from being the IP owner. And once you understand that, you can see how this leads to hyperinflation of budgets. They exploded. Another way Korean creators discovered they could get paid more under Netflix was by shrinking the episode count even further. Because writing and directing fees are calculated on a per episode basis, you suddenly started seeing Korean Netflix originals with six or eight episodes. It was basically economic optimization. And as budgets grew, talent fees shot up with them. Top Korean actors who might have earned around $50,000 per episode in the

27:08 broadcast era began commanding $200 to $300,000 per episode, sometimes even more for the biggest names. Star writers like Unsu Kim, who had been earning around $20,000 per episode in the years leading up to Descendants of the Sun, eventually crossed the 100 million1 or roughly $80,000 US mark per episode after mega hits like Goblin and Mr. Sunshine. So on the surface, the drama industry appeared to be making a comeback. Bigger budgets, more international attention, more money flowing through production companies than ever before. But for Korean producers, this new scale created a different kind of trap. Not necessarily worse than before, but more precarious and more dependent. Here's why. Since they never get to share the upside and just get a fixed fee, the only way for Korean producers to earn more money was to take on bigger projects with bigger budgets so that their 10 to 15% producer fee would be larger in absolute terms. And look, it's only natural, right? When

28:16 you see Netflix making $900 million off Squee game while you pocket a fixed fee from 2019, your expectations go up. You start thinking, why am I taking all the financial risk if I'm not getting a share of the upside? So producers push for bigger budgets, not out of greed, but out of a simple need to earn enough to justify the risk they were taking. Their logic pushed the entire industry into an arms race. Every new drama had to be more ambitious, more expensive, more star-studdied than the last just to justify the economics. This is not building a sustainable business. You're running faster and faster just to stay in the same place. But here is the ultimate catch. Once you're betting 25 to$30 million on a single project, you cannot afford to take creative risks. You need to guarantee success or at least feel like you're guaranteeing it because if you fail, you might not get grin lit for another highbudget project from Netflix anytime soon. Sure, there

29:20 are now other Netflix competitors in Korea that you can also pitch to, like Amazon Prime and Disney Plus, not to mention domestic Korean platforms like Kong Play. But here's the thing, they're all going after the same pool of top tier Korean talent and are just as unforgiving when it comes to failures because they're in a bloody competition. So what do Korean producers pitch? Safe bets, proven themes, al-ist actors with track records, ideally an IP that already has a fan base. That's why Webune adaptations exploded in the Netflix era. They came in with built-in audiences and reduced the perceived risk of a massive budget. Instead of developing original and creative scripts like Sweet Game that put Korean drama on the global map, the industry increasingly chases proven formulas. The paradox is rather ironic, isn't it? You would think bigger budgets should theoretically allow for more creative risk and ambition. But the current Netflix model, where Korean producers

30:23 bear the financial risk but get no upside, flip that logic on its head, even as everyone started getting paid much better than before. Well, almost everyone, because before you forget, the average junior writer or assistant writer is still getting paid barely above minimum wage. Typically around $300 to $1,200 per episode. Maybe the real problem isn't just the unfair nature of the deal. Maybe it's that the money itself got too big. When you're gambling on that much on a single show, the risk calculus changes for the worse, regardless of whether you stand to earn a share of success. Either way, here is where we are. The Netflix trap means more money leads to less experimentation, more sequels, more adaptations, more predictable formulas. original storytelling becomes the riskiest investment you can make, which is exactly the opposite of what an industry supposedly in its golden age should be doing. Unfortunately, the soul of Korean drama storytelling is already

31:26 beginning to erode, and the forces accelerating this erosion are far more disruptive than anything Netflix introduced. So, it would appear that Netflix now completely dominates Korea's drama industry with its virtually unlimited budget and Korean content has never been more visible or more celebrated worldwide. Yet, beneath the global success, the industry itself is quietly collapsing from within. And hopefully, you now have a much clearer sense of why. But to make matters worse, something else is happening completely independent of the Netflix trap. Because what exploded during the pandemic wasn't just Netflix originals. It was Tik Tok, short form video, micro dramas. At first, the idea of taking a traditional 1-hour drama and chopping it into 60-second vertical micro dramas for smartphones seemed absurd. I remember thinking, would people really watch stories told in a bite-sized vertical episodes? The Korean drama industry probably had the exact same reaction. But Tik Tok's super powerful algorithm rewired the viewing behavior of an entire generation. South Korea now has

32:43 one of the highest short form video consumption rates in the world. Gen Z Koreans doom scroll through Tik Tok, Instagram reels, and YouTube shorts for hours. And many openly admit that long form dramas feel too slow unless you're watching it at 1.5x speed. That's why the appetite for compressed vertical storytelling exploded so suddenly and why Korean producers were completely blindsided by it. Algorithms became better than human writers at predicting what you want to watch next, creating a constant dopamine loop that traditional storytelling simply cannot compete with. Meanwhile, something everyone had been waiting for finally happened. The pandemic stopped and people could go outside again. So, they traveled, they socialized, and they stopped spending entire weekends binge watching 10 hours of Netflix. As a result, global streaming viewership and subscriber growth slowed everywhere, not just in Korea, and platforms like Netflix began cutting budgets. Fewer projects were

33:46 approved and episode counts shrank. Suddenly, Korea's entire production model became even more unsustainable because during the pandemic boom, Korean entertainment companies had massively overexpended. They assumed that demand for scripted content would just keep on climbing forever. So they bought US production studios for billions, invested in new facilities, and hired more writers, more crews, and more everything. But when the streaming slowdown hit, reality came crashing down. Korean studios were left with enormous debt, shrinking margins, and far fewer long- form commissions to keep the machine running. And that led to a painful realization. If the long form market is shrinking and Netflix owns the upside anyway, where does a Korean producer actually make money? That's when the industry started looking towards China. Because just as long form economics were collapsing, China's short form micro drama ecosystem was exploding into a multi-billion dollar gold rush.

34:51 Chinese micro dramas often called dwanju which roughly translates to short dramas or vertical dramas are typically 30 to 90 seconds per episode packaged into series of 50 to 100 episodes and they use a classic premium model. The first handful of episodes are free and after that viewers pay small amounts to unlock each subsequent episode through token or point systems. a few Chinese yuan or roughly 30 to 50 cents for multiple unlocks, bringing the cost per episode down to just a few cents. According to one report, as of June 2024, the user base for micro dramas in China reached over 570 million people and individual hit series can generate millions of dollars in revenue despite production budgets that are a fraction of traditional TV. It works because paying a few cents to unlock the next episode feels easier than waiting. Add in advertising, VIP bundles, and platform upselles on top of the micro payments, and you get a system that generates

35:57 higher average revenue per user than traditional subscription streaming. Their only goal is to maximize completion rate and trigger the next unlock, not to create art. By 2024, the micro drama industry had already surpassed the entire Chinese film industry in annual revenue, pulling in roughly 7 billion US. Analysts predict that this format could rival or even surpass long form streaming within a few years in China. So, Korean producers are watching all of this unfold and asking themselves, "Wait, should we be doing this, too?" Of course, the Korean market is much smaller and the production culture is very different. But once they saw how much money Chinese companies were making, the incentive calculation changed. A traditional 16 episode K drama might take one or two years to develop film and release and requires big stars, massive crews, and enormous overhead. Meanwhile, a micro drama can be written, shot, and monetized in as little as one to three weeks using

37:04 unknown actors and a team of maybe five to 10 people. And unlike Netflix originals, where producers surrender all IP and get paid only once, micro dramas let producers keep ownership, earning recurring daily revenue from microtransactions, and take almost no financial risk. In other words, micro dramas could offer them something Netflix never gave them. Speed, control, and the possibility of real upside. So, Korean companies like Top Reels launched in 2024, mimicking the Chinese model almost exactly. Roughly 2-minute vertical episodes, 100 episode runs, and small per episode payments. Even Korean streaming platforms like WACA are commissioning short form originals testing whether Korean emotional storytelling can work in compressed formats. So far, these are still smallcale experiments. There's no public data yet showing massive user adoption or breakout hits the way China has. But the infrastructure is being built and content is being tested. But here is the

38:09 uncomfortable truth. Micro dramas aren't just a different format. They're a completely different breed built around dopamine, instant gratification, constant cliffhers, and algorithmic performance. And increasingly, the entire pipelines from concept to editing are being accelerated or even partially automated by AI tools. Chinese studios are already using AI assisted scripting and AI generated scenes to speed up production and cut costs. And the thing about AI generated content is this. If it's just good enough, people will still watch because in short form, viewers don't care how well it was made. They will just scroll to the next clip anyway. And there's another fear quietly spreading through the Korean industry. What if micro dramas become the new talent pipeline? In China, that's already happening. Unknown actors from 60-second dramas suddenly become stars. Micro drama writers get recruited into longer shows. Directors who star in vertical content get hired by major

39:16 studios. And as that ecosystem grows, the traditional creative class, I'm talking about actors, writers, and directors, begins to lose market share to a faster, cheaper algorithm-driven system. Korean producers worry that if micro drama revenue keeps rising while long form budgets stagnate, the next generation of talent will flow towards short form instead. And that would mean fewer original long- form scripts and fewer new genres explored. That's the real cultural erosion. So the big question isn't whether Korea can make micro dramas. They can and they will try. But what's at stake here is whether doing so will erode the very thing that made Kdrama special in the first place. the slow burn attachment, the emotional payoff, the 16-hour investment that makes you feel like you've lived with the character. Now, can you see how the very system that made Kdrama a global phenomenon is now under siege from every direction? And the people who actually

40:20 create these stories, the writers, the crews, the smaller producers are still trapped in the same work for higher model they've always been in. Except now the stakes are higher, the budgets are bigger, the timelines are shorter, and the future is more uncertain than ever. But hey, I can also imagine a world where Korea combines the best of both. Maybe that's a solution. A kind of like twotrack model. Use short form as a rapid testing ground for new ideas and characters. validate demand early and then expand the proven concepts into long form with real emotional depth. They could potentially give creators enough leverage to negotiate even revenue share or profit participation [music] because they wouldn't just be pitching a story. They would already own the audience. But whichever direction they choose, the Korean drama industry will have to make a very deliberate, [music] long-term decision if it wants to preserve the magic of the long- form storytelling formula it has spent

41:22 roughly three decades perfecting. If you found this video insightful, make sure to subscribe to Asian Boss and share it with your friends or anyone you know who loves Kdramas. And a huge shout out to Teddy for helping us with industry insights. I learned a ton while researching this topic and I hope you guys did as well. By now, many of you know how seriously we take our research. We always do our best, but no 30 or 40inut video can cover every aspect of an entire industry perfectly, and it's always possible we miss something. What I ask from you is simple. If you ever see anyone claiming we purposely left something out or that we have some kind of agenda, say something. I've said this a million times. We never make content to make any country or any particular person look bad. We share what we learn exactly as we learn it because I'm genuinely curious and I want to understand the world better. If you value intellectual curiosity and critical thinking as much as I do, then

42:26 you're part of this mission. Together, we can keep improving the quality of our work and bring the global audience insights about Asia that mainstream outlets rarely cover with this level of nuance. Our goal at Asian Boss is to bridge cultural understanding between Asia and the West and to empower the next generation of leaders, creators, and entrepreneurs. If that resonates with you, keep watching, keep sharing, and support us in whatever way you can. Of course, I'm Steven Park. Thank you for watching until the end and as always stay curious.