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K-Dramas are taking the world by storm and in recent years have seen a rise in popularity as more and more people discover Hallyu (the Korean wave). As such, more production companies are trying to come up with even better K-Dramas that will grab the audience's attention and long-term focus more. One of the ways that they do this is by increasing their production costs to deliver a higher quality show.
We're sure you must've noticed the increase in scale when it comes to K-Drama productions recently, too. Today we're going to look at the ways that K-Drama production costs are changing and some evident examples.
The skyrocketing cost of K-Drama production due to shifting trends and the influence of OTT streaming
Then: High-budget broadcast dramas and trends
Before OTT streaming platforms became the order of the day, K-Drama viewers were mostly accustomed to K-Dramas produced by broadcasting companies such as SBS, MBC, tvN, KBS, JTBC, and many more.
Some of the highest-budget broadcast dramas that have been released include "Arthdal Chronicles" (2019, tvN - about 54 billion Korean won)...
..."The Legend" (2007, MBC - about 43 billion Korean won)...
... and "Bulgasal: Immortal Souls" (2021, tvN - about 40 billion Korean won)
Some other broadcast titles with high budgets include the "Penthouse: War In Life" franchise (from 2020, SBS - about 32 billion Korean won), "Snowdrop" (2021, JTBC - about 32 billion Korean won), and "The King: Eternal Monarch" (2020, SBS - about 30 billion Korean won).
These are just a few of the K-Dramas known for having a high production cost.
You might notice a trend when looking at these dramas collectively. Many of the dramas feature famous Hallyu actors and actresses, which means a high pay budget. A lot of the dramas also feature a lot of visual effects and fancy set production, which can also be linked to their genres. As you may have noticed, many of the dramas are either related to fantasy or history in some way. You might be able to argue that these types of dramas need a high budget in order to accurately portray their story.
Now: The shift in high-budget K-Drama trends and rise in OTT popularity
While it is true that the production of any audiovisual art form can cost a lot of money, viewers have noticed that ever since OTT streaming became the trend, the production cost of dramas in general has increased tenfold.
To understand why, let's take a look at some of the trend shifts we have noticed lately.
One source recently took a deep dive into how dramas such as "Extraordinary Attorney Woo" reflect the impact of OTT drama creation on K-Drama productions and their production costs.
The hit OTT K-Drama "Extraordinary Attorney Woo" showcased both the light and the shadows of K-Content.
"It showed that as long as the content is good, it doesn't matter how or through which platform the content is shared; the drama will grab viewers' interest. This gave hope to many production companies. However, it also showed the heated market reality caused by the noisy process of switching the broadcasting rights from SBS to ENA." - KT Studio Genie
Many were impressed with the drama's storyline, the actors' performances, and the CGI aspects of "Extraordinary Attorney Woo". The drama cost between 15-20 billion Korean won to make.
Just 5-6 years ago, a big project was considered to cost 10 billion won (about 6.9 million US dollars - as of Sep 2022), but now that is no longer considered a big budget.
It is also interesting to note that dramas like "Extraordinary Attorney Woo" are being made with a big budget but unlike some of the trends we identified earlier, it has no historical background and no need for intense visual effects. In fact, you might be able to argue that the drama does not show a necessity for a high budget as it is largely focused on daily life and a modern city setting where most things are already set in place. However, the use of budget on things like adding whale graphics (for example) into the drama is part of what made it so special to many viewers.
From a production company's perspective, if a large amount of money is invested, it can be expected to help diversify the genre of dramas, such as creating more opportunities for science fiction dramas and increasing the level of completeness felt by watching any drama in general.
Concerns about stiff competition in K-Drama production
However, there are also concerns that this type of investment will lead to excessive competition among streaming platform companies and could cause production cost bubbles, which will lead to aftereffects.
For example, currently, in the content industry scene, mega-dramas that cost more than 40 billion won are being produced one after the other.
One of these dramas includes "Narco-Saints" released in September, which tells the story of a civilian who is falsely accused and framed by the druglords who are taking control of the South American country, Suriname, then accepts the NIS' secret mission. Chungmuro's leading actors Hwang JungMin and Ha JungWoo appear and 40 billion won was spent on the production. (Netflix)
Additionally, as the factors of rising production costs increase, works worth more than 20 billion won will be released one after another starting in the second half of this year, too. tvN's "Alchemy of Souls" will release season 2, KBS' "Curtain Call" will also be released along with JTBC's "Reborn Rich". At the beginning of next year, Kong HyoJin and Lee MinHo's 40 billion won tvN drama "Ask the Stars", which takes place in a space backdrop, is expected to air, as well.
As the market grows due to the entry of global OTT platforms such as Netflix and Disney+ into Korea, the production cost of dramas has also spiked. Disney+ spent 50 billion won on the drama "Moving" which is a superhero action. After recruiting top stars such as Ryu SeungRyong and Zo InSung one after the other, they finished filming and are considering the timing of the release.
With the rise in high-budget drama production, it makes it a lot harder for smaller-budget K-Dramas to get the same appreciation and spotlight.
Contributing factors to K-Dramas' high production costs
Cast, location, and other contributing factors
Other than settings and visual effects, there are various factors that cause production costs to increase. For instance, actors' performance fees and things such as manual staff labor costs to improve the working environment are contributing factors. The cost of post-production has also increased due to the strengthening of computer graphics (CG).
In the past, it cost an average of 12-13 billion won to produce K-Dramas when big Hallyu stars appeared in them and the drama was filmed overseas.
For comparison, "Extraordinary Attorney Woo" was broadcast on a lesser-known channel such as ENA, yet it was born as a 'silver spoon' drama. According to officials in the drama production industry, "Extraordinary Attorney Woo" had a production cost that exceeds the average production cost of 12 billion won (about 750 million won per episode, for 16 episodes).
Including advertisements of Woo YoungWoo (played by actress Park EunBin) running to you when you call a taxi through your cellphone in Korea, the total production cost is expected to be higher if you consider these types of proactive marketing techniques and the costs thereof.
This is more than the drama "Descendants of the Sun" (which cost 13 billion won in 2016), where Hallyu stars such as Song HyeKyo and Song JoongKi were cast and it was filmed overseas (including in Greece).
The cost is also similar to the movie "Hunt" (which cost 20.5 billion won to make) starring the legendary actors Lee JungJae and Jung WooSung.
A high-ranking official from a mid-sized production company said, "Some Hallyu stars ask for 700 million to 800 million won per episode when they appear in OTT productions." This makes the pay for actors one of the bigger costs in a typical K-Drama budget.
All things considered, the 20 billion won production cost is an amount that can exceed the breakeven point if 5 million viewers watch a movie. An industry official who plans dramas said, "The drama "Extraordinary Attorney Woo" doesn't feature Hallyu stars with a fee of hundreds of millions (won) per episode," adding, "In other words, this shows that the overall cost of producing a drama has risen a lot these days."
Where broadcasting companies stand amidst the rise in OTT popularity
As drama production costs rise and platform competition to secure dramas intensifies, terrestrial broadcasters (also known as OTA (over-the-air) broadcasters) are on alert.
According to recent minutes of the KBS Viewers Committee, Kim DeokJae (the vice-president of KBS) said, "The drama "Extraordinary Attorney Woo" is a big hit, but we can't produce such a drama. It's so expensive that I've heard even SBS turned it away."
The number of mini-series produced by OTA broadcasters, which was about 12 a year, has been halved recently. For OTA broadcasters suffering from worsening management, buying expensive dramas could disrupt securing other dramas, which could dampen the viewers' universal viewing rights.
"Extraordinary Attorney Woo" was originally set for broadcast on SBS but was finally organized by the cable channel ENA. It is reported that KT (the parent company of ENA) bid 13.2 billion won (825 million won per session) to buy "Extraordinary Attorney Woo". As KT's bidding is considered a great success, the trend of rising drama production costs is expected to continue for the time being.
However, some in the industry are also worried about a sharp rise in drama prices. A senior official at the drama bureau of an OTA broadcaster said, "Production company A called the cost of drama broadcasting rights too high, so it can be seen that it is inevitable due to capitalist logic. However, we need to consider whether the market price is appropriate and acceptable to the domestic market."
A large studio official said, "The production cost of dramas in Korea is less than one-fifth of that of the United States. In order to grow the pie in the market, we need to treat good content and actively produce it."
Fan opinions on K-Drama production value
The perspective of production and broadcast companies is quite different while viewers may simply consume the various K-Drama content made available to them.
Many fans have stated that they are not as attached to the production cost in the same way that they are to the story, cast, OST, or other production elements.
In a Reddit forum discussing whether the production value of a K-Drama matters, this fan listed the aspects that matter more to them than the cost of the drama. Even if it has a low production value due to budget restraints, the fan is willing to overlook those aspects if the drama in itself is good.
Reddit Screenshot
While production companies might be feeling pressure due to production costs these days, it is important that they remember to consider the opinions of fans.
What do you think of the current production costs incurred in creating K-Dramas? Do you appreciate K-Dramas with a high budget? Is it a factor that you consider when watching them? Let us know your thoughts in the comments.
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