Netflix grows on the back of K-content... 81% of domestic revenue paid to U.S. headquarters

[Financial News] While domestic online video service (OTT) companies have been unable to escape losses, Netflix’s Korean business revenue has topped 1 trillion won. In particular, with 81% of revenue generated in Korea found to have been paid to its U.S. headquarters, calls are being made to improve how K-content’s success is shared with production companies.
On the 14th, an analysis of Netflix Services Korea’s audit report by Han Jun-ho, a Democratic Party of Korea lawmaker on the National Assembly’s Science, ICT, Broadcasting and Communications Committee, found that domestic revenue totaled 1.0542 trillion won last year. That was an increase of about 67% from 631.7 billion won in 2021.
Of this, 853.9 billion won was paid to the U.S. headquarters under the designation “consideration for the purchase of subscription memberships.” This represents 81% of domestic revenue. By contrast, the Korean entity posted operating profit of 20.3 billion won, with an operating margin of just 1.9%.
While Netflix has secured a high usage rate in the domestic market, homegrown OTT operators are struggling. Last year, Tving and Wavve posted operating losses of 69.8 billion won and 12.2 billion won, respectively. According to the Broadcasting Media and Communications Commission’s “2025 Survey on Broadcast Media Usage Behavior,” Netflix’s paid usage rate was 46.7%, about 3.6 times Tving’s 13.0%.
As Netflix’s influence in the domestic market expands, its revenue-sharing structure with content producers has also become a point of contention. According to Han, a contractual model is being used in which Netflix covers all production costs in exchange for securing intellectual property (IP), while production companies receive a margin equivalent to around 3–10% of production costs.
Netflix also owns the IP for its signature hit, “Squid Game.” This type of contract has the advantage of reducing production companies’ initial production-cost burden and the risk of a commercial failure, but it also makes it difficult for them to secure additional revenue even if a title becomes a global hit.
Han criticized the arrangement, saying, “K-content is what made Netflix No. 1 in Korea, yet the production companies that actually created it receive a margin equivalent to around 3–10% of production costs, regardless of a title’s success.” He added, “There should be responsibility commensurate with its influence, including additional compensation tied to a title’s success.”
[email protected] Yoon Hong-jip Reporter