Domestic Films Are Struggling... "Actor Inflation" Caused by Streamers Like Netflix and Disney+

The cost of hundreds of millions of dollars per episode for actors these days is no longer surprising. There are many cases where the cost of a leading actor accounts for half of the total production cost of a drama. The reality is that it costs billions of won to cast an actor with a name value, and the burden falls on the production company.

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In the performing arts industry, there is a constant stream of criticism that "casting with stars is still considered a box office guarantee check, but excessive performance fees are shaking the entire content production".

The biggest reason for the rise in actors' fee is the expansion of the streaming market. streaming platforms have attracted a large number of actors by offering higher performance fees than broadcasters to attract actors. Even before the streaming market established itself in the domestic market, the trend has continued until now, and actors' fee have continued to rise.

Even before the streaming service began in earnest, the average drama production cost was around 500 million won per episode. Since Netflix and others entered streaming, the production cost per episode has increased by hundreds of millions of won, increasing the overall production cost burden. This is the result of a surge in price tags as well as the movement of famous actors to streaming.

Lee Jung-jae, who is known to have been paid approximately 1 billion won per episode, mentioned himself, "There have been talks about whether the pay is appropriate", he said. "I think everyone should find the right line. The content industry should not be pushed back by that. It's hard to blame anyone, and everything is intertwined. I think there will be a new solution", Lee Jung-jae said.

Unlike streaming, which is on a booming road, the theater district is cast only by a grim reality.

"It's a big deal because actors' pay has skyrocketed", a Korean movie producer said. "The market is small, but the prices are too high. It is too small for Korean broadcasters and movie companies to handle because it is not suitable for the size of the market. Casting and production costs also have many concerns".

According to the Korea Communications Commission's "evaluation of competitive conditions in the broadcasting market", released in May, streaming operators' production demand increased, but domestic streaming operators and broadcasters' production demand decreased due to the contraction of the broadcasting advertisement market and worsening profitability. It was found that 141 films were made in 2022, 123 films in 2023, 100 films last year, and 80 films this year. The burden of increasing content production costs eventually led to a decrease in the number of productions.

According to the industry, Netflix has reportedly set a ceiling of up to 400 million won per episode for actors. In response, Netflix explained, "Netflix is calculating a budget that fits the 'ambitious size' that the creator wants to reach in each work".

"Netflix's cap of 400 million per episode is a good idea. However, 400 million won is also a huge amount of money. Korean producers cannot afford the same amount of money. Actors and actresses prefer streaming services such as Netflix and Disney+, which have a great global impact. If it is a Korean production company's work, I also consider going with Netflix", the CEO of a Korean film production company said. "Young male actors' preference for appearing in movies is declining because it is more expensive to appear on TV or streaming once than to appear in a movie once. This creates a phenomenon of concentration".