ExplainerHow much do K-dramas cost to make? Budgets keep growing, hastened by Netflix’s entry with Kingdom and Sweet Home
- K-dramas are hugely popular and, over the past 20 years, have become a lot more expensive to produce
- With star salaries, special effects and overseas shoots, each episode can cost more than US$2.6 million
How much do Korean drama series cost to make? It’s a simple question, but over time the answer has grown more complicated.
Two decades ago, when there were only three major broadcasters – KBS, SBS and MBC – in South Korea, the answer was 36.5 million Korean won per episode. Fast forward to today and by some metrics that figure has risen to 700 million won (US$615,000), a staggering leap, but if we include streaming services, the real average may be even higher.
In the year 2000, the Korean drama landscape was far less complicated than today. Variety was limited, with romantic dramas, family dramas and a few more expensive period dramas dominating schedules. Cast members’ salaries accounted for only 10 per cent of budgets, competition was relatively low, and productions were straightforward.
Today’s environment is vastly different. Stars command a higher percentage of overall production budgets, series have grown more ambitious, with foreign shoots and visual effects demands, and the wider range of distribution channels has increased both the variety of Korean shows and their international audience.
The average cost of an episode leapt to over 100 million won by 2008. By the time the cable networks tvN, JTBC and OCN had become major players in 2015, that figure had shot up to 400 million won.
Competition led to some big spending, with the cost of pricier productions easily topping 1 billion per episode. Mr. Sunshine on tvN set a new benchmark in 2018 with its 1.67 billion won per episode price tag.
That per-episode cost has been matched since by other shows, such as Netflix’s horror action series Sweet Home. However, upcoming projects are aiming higher once again, with Netflix’s Suriname, a six-part period crime series from director Yoon Jong-bin, reportedly commanding a staggering 5.8 billion won per episode, a 160-fold increase over the average cost of a primetime show 21 years ago.
International demand and the streaming market have raised the value but also the expectation for quality, both creative and technical. To compete on the global stage, production values had to play catch-up over the last decade or so.
Korean films have long been lauded for their sophisticated visuals, but for most of that time the technical gap between TV and film was considerable.
Not so today, as most Korean shows evince a cinematic atmosphere. This has come at a significant cost, but one which has been offset by the global demand for Korean content.
Also likely to raise production costs are standard labour contracts which are designed to combat the notorious working conditions on drama sets, after a similar law was successfully applied to the film sector a few years ago. Working under extreme conditions, staff members have suffered from exhaustion and psychological trauma, while a few well-documented cases have resulted in fatalities.
These include an assistant producer on tvN’s Drinking Solo who committed suicide, pointing the finger at his work environment in a suicide note, and a props department member who died from a brain aneurysm caused by overwork on Kingdom.
Negotiations for the standardised contracts took place in 2019 and stipulated, among other things, a 52-hour work week, but the practice has yet to fully implemented. When this much needed mandate does take effect, dramas will have to adjust their shooting schedules accordingly, which will add to their current costs.
With Disney, Apple TV+ and Coupang Play now joining the fray, it seems clear that over the next few years production costs on shows will rise ever further. But what does this mean for the future of the industry?
Certain cable networks, like JTBC and tvN, can currently fund their expensive production contracts through lucrative output deals with the likes of Netflix, but the trio of terrestrial broadcasters which pioneered the drama industry are struggling to keep up.
KBS, SBS and MBC produced 16, 13 and 11 dramas, respectively, last year, but those numbers are being slashed to between six and 10 this year. As these broadcasters find success with cheaper reality TV shows, which cost around 120 million won to produce, the ballooning price tags of dramas are becoming increasingly hard to justify.
Even without these broadcasters, there isn’t likely to be any shortage of content, but if production costs reach the point where local distributors are essentially priced out, will that be a tenable situation? If and when the market does one day cool and high-spending streaming companies, which have no obligation to the market, begin to exit, the cost crunch that could ensue might be devastating for the industry.
But for now, it’s all blue skies as we scale the steepening slopes of Korean dramas, their dizzying peaks reaching ever higher.
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