Bloomberg — These days whenever Chanette Thompson stubs her toe or knocks her funny bone, she’s likely to shout out “Aish,” the Korean equivalent of “Oh no!” or “Darn it.” Thompson, a make-up artist who lives in Los Angeles, has never been to South Korea and is not even close to being fluent in Korean. The fact that she’s prone to curse in a language she doesn’t speak is a testament to one thing — her insatiable consumption of Korean TV.
Thompson first happened upon Korean shows more than a decade ago while flipping through the outer reaches of free broadcast TV channels in LA. Before long, she was enthralled with Pink Lipstick, a Korean romantic comedy with a handsome protagonist and a melodramatic storyline, which reminded her of The Young and the Restless, a soap opera she used to watch with her grandmother. From there, her fascination took off.
Today her Netflix queue is filled with Korean dramas. She subscribes to another streaming service, Viki, to get access to even more Korean shows, she goes to Korean restaurants to try out the foods she’s watched on screen and she is planning a trip to South Korea in 2025.
“I watch American TV, but I watch way more Korean TV,” she said.
Thompson is in good company. Korean TV has blossomed into one of the most popular types of programming on the planet. The success of the Netflix Inc. (NFLX) series Squid Game, following on the heels of the hit film Parasite, has helped turn Seoul into one of the entertainment capitals of the world. According to research firm Media Partners Asia, South Korea is the single largest producer of successful shows in Asia. It’s also the largest producer of hit series globally for Netflix outside the US. The company said more than 60% of its customers watched a Korean show last year.
For two consecutive weeks in March, The Glory — a 16-episode drama about a woman seeking revenge against the tormentors from her childhood — was the most-watched show on Netflix, drawing about as much viewership as the two biggest English-language series combined. It was one of Netflix’s 10 most popular series in more than 90 countries, including Argentina, France, India and South Africa.
“Korean content sells well everywhere,” said Hyun Park, a producer and adviser to Studio Dragon, the South Korean company that produced The Glory.
Netflix budgeted $500 million in South Korea in 2021 and, after the success of Squid Game and other series, increased its output to at least 34 original programs this year. It now spends close to $1 billion a year, according to Media Partners Asia. Following Netflix’s lead, some of the world’s largest media companies are scrambling to capitalize on the surging interest from viewers like Thompson. Walt Disney Co’s (DIS) Disney+ and Apple Inc’s (AAPL) Apple TV+ are among the global streaming services exploring deals that would step up their investment in the country. Amazon.com Inc. (AMZN), which doesn’t operate a streaming service in South Korea, is also buying Korean shows because of their popularity elsewhere in the world.
The success of Korean TV didn’t happen overnight.
In the 1950s, Lee Byung-chul, the founder of the Korean electronics-to-shipbuilding giant Samsung Group, created CJ CheilJedang, a food and health conglomerate. Producing TV wasn’t part of the original plan. But during the twilight of the Cold War, as the cultural and economic might of the US helped to topple the Soviet Union, the political leaders of South Korea began encouraging its largest companies to invest in entertainment. The soft power, they believed, might prove nationally advantageous.
In the 1990s, two of Lee’s grandchildren, Lee Jay-hyun and Miky Lee, dove in headlong, transforming CJ into a sprawling entertainment conglomerate. They created and acquired a handful of domestic TV networks, live-event businesses and record labels. In 1994, they invested $300 million in DreamWorks SKG, a new movie studio being formed by Steven Spielberg, Jeffrey Katzenberg and David Geffen. In 1998, the CJ Group opened the country’s first multiplex, spawning a successful cinema chain that would go on to manage theaters throughout Asia.
The Lees were initially more focused on making films than television. For years, the South Korean TV industry had been ruled by a handful of local networks that churned out popular, formulaic romance dramas — typically, love stories revolving around topsy-turvy, star-crossed courtships — while the more prestigious storytelling often landed in movie theaters.
In 2010, the Lees created a new division to produce dramas for South Korean TV networks and over time the company went on to strike deals with many of the nation’s best writers and directors. In 2016, the Lees spun out Studio Dragon from CJ ENM, their entertainment company. That same year, Studio Dragon produced Guardian: The Lonely and Great God. The series about a military general from the 10th century who is cursed with immortality became the first cable drama in Korean history to reach 20% of TV viewers with a single episode.
A few years earlier, when Netflix was first expanding into Asia, the company initially focused on making inroads in Japan, which western executives often think of as the cultural capital of the region thanks to the global appeal of Japanese anime and the achievements of auteurs such as Akira Kurosawa and Hayao Miyazaki.
But as they cultivated deeper relationships in the region, Netflix executives started to realize that it was South Korea, not Japan, that would be the key to attracting legions of new subscribers throughout Asia. TV networks in Japan, Taiwan and Hong Kong were already buying up popular Korean TV series and re-airing them on broadcast and cable networks with great fanfare. So far, nobody outside of the region had scooped up many of the streaming rights.
By all means first
Since the early days of streaming, fans of Korean dramas had often illegally downloaded episodes from sketchy websites rife with pop-up ads and malware. Or they turned to Drama Fever, a once promising US startup service owned by Warner Bros., that was losing steam amid AT&T Inc.’s tangled 2016 takeover of its parent company (Drama Fever was shut down in 2018).
Minyoung Kim and Don Kang, Netflix’s top executives in South Korea, saw an opening. Kang, who had previously worked at CJ Group, was well versed in Korean programming. “Interest in Korean content was very, very high in Asia, but there was no real demand from the businesses outside Asia,” Kang said.
In 2019, Netflix signed a deal, licensing the streaming rights to many Studio Dragon shows, and took a small stake in the company. Under the new arrangement, series like Hometown Cha-Cha-Cha, a dentist-themed romantic comedy, would debut on Korean TV and then appear hours later on Netflix. In the years that followed, millions of customers in South Korea signed up for the streaming service, helping to turn Asia into Netflix’s fastest-growing market.
By adding subtitles and dubbing to the Korean series, Netflix was soon able to introduce the programming to legions of new viewers in Latin America, Europe and the US. “We opened up an easy way for people outside Asia to get to know Korean content in the language they speak,” Kang said.
The onset of the pandemic only heightened interest from audiences overseas, as people who were stuck at home and streaming large amounts of programming started sampling shows from other parts of the world. By the fall of 2021, Korean shows, including Squid Game, All of Us Are Dead and Extraordinary Attorney Woo, were regularly popping up on the lists of Netflix’s most popular programming. Globally, Netflix users started spending more time watching shows from South Korea than from any country outside the US, including the UK.
Global streaming services have enabled the Korean drama to evolve from the more formulaic programs seen on broadcast networks, according to Kim Jey-hyun, the co-chief executive officer of Studio Dragon. Story arcs now stretch over more episodes, and characters are less one-dimensional. Shows also deal with darker themes like class, abuse and the undead. But they do so without pandering to foreign viewers. The biggest hits are still quintessentially Korean.
Now the Korean entertainment industry is hoping to keep the trend going. Studios have increased their output of drama series by more than 50% over the last three years, releasing more than 125 shows in 2022. The major producers in Seoul are hoping to prove that Korean TV can avoid the fate of Hong Kong cinema or Japanese pop, genres of Asian media had moments of heightened global success, only to see foreign interest eventually subside.
“We are wondering how long it will last,” Kim said.
CJ ENM has a long way to go to catch Western media giants. It has an enterprise value of about $4 billion, less than Lions Gate Entertainment Corp., the producer of the John Wick movie franchise. But Studio Dragon’s success is inspiring CJ ENM, its majority shareholder, to try and compete head-to-head with Western media giants on the global stage. The company has set up two new production divisions — CJ ENM Studios and Fifth Season — to increase its output. Recently, the company created a division of Studio Dragon in Japan and is also expanding into Thailand, which has a growing community of filmmakers.
About 20 miles northeast of Seoul in the town of Paju, CJ ENM has built a brand-new TV studio, the largest in the country, housing 13 sound stages, including one that is about the size of the White House. Stage two is the home of a virtual production studio modeled after the technology used on Walt Disney Co.’s The Mandalorian.
“If someone writes about the media industry, I would love for there to be three companies,” said Steve Chung, the co-CEO of CJ in the US and the company’s chief global officer. “Netflix is the top streamer, Disney is the family branded company and CJ as the most consequential non English-language media company in the world.”
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