Korean Film & Drama Industry in Crisis—Is Scaling Down the Only Way to Survive?

The Korean film and drama industry is at a turning point, grappling with falling ticket sales, shifting audience behavior, and the growing influence of OTT platforms. Amid rising concerns, industry experts suggest cutting production costs may be the only way forward.

According to the Korean Film Council’s 2024 report, the average movie ticket price paid by audiences fell to ₩9,702, marking a 3.8% drop from the previous year. While multiplexes set their weekend adult ticket prices at ₩15,000, actual consumer spending covered only 64.7% of that cost.

The decline in premium screenings (IMAX, 4D, ScreenX) has also played a role, with revenue in that category plummeting 32.5% YoY to ₩75.9 billion. Despite these challenges, some films still crossed their break-even points, proving that leaner production budgets are key to box office success.

Hitman 2 (₩8.5 billion budget) attracted 2.3 million viewers. Dark Nuns (₩10.3 billion budget) sold 1.6 million tickets, leveraging global pre-sales across 160 countries—helped by Song Hye-kyo’s international appeal. This trend suggests that lower production costs can help films remain profitable, even in a struggling theatrical market.

Despite lower ticket prices, theaters are failing to win back audiences in large numbers. Instead, OTT platforms are becoming the preferred choice, offering flexibility, affordability, and convenience.

Professor Lee Eun-hee (Inha University, Consumer Studies) predicts that this trend is here to stay: “Once consumer habits form, they rarely change. OTT platforms offer better pricing and accessibility, making them the preferred choice for smaller-scale films.” She even suggested that theaters should repurpose their spaces into entertainment hubs, reducing screen counts and integrating alternative experiences to remain viable.

Meanwhile, Netflix continues to dominate in Korea. According to WiseApp Retail, its monthly active users (MAU) reached 14.16 million, setting a new record. Its content library expansion—with hits like Squid Game Season 2 and The Trauma Code: Heroes on Call—has kept engagement levels high.

By contrast, domestic platforms struggle:

Coupang Play: 7.6M MAU

TVING: 6.26M MAU

Wavve: 2.72M MAU

Disney+ Korea: 2.36M MAU

Watcha: 690K MAU

With SBS and MBC now licensing content directly to Netflix and Disney+, local streaming platforms face a tougher battle ahead.

Can Korean OTT Platforms Compete?

To fight back, TVING is expanding its library through a KBS partnership, bringing back classics like Descendants of the Sun and Love in the Moonlight. The platform also scored a breakout hit with the historical drama The Queen Who Crowns, offering a dual-rating strategy: PG-15 version on tvN and R-rated version on TVING.

Meanwhile, Wavve is tapping into the survival genre, increasing investment in shows like The Bloody Game. Additionally, the school-set genre drama Study Group has been praised for leveraging OTT platforms’ strengths, enhancing dialogue and direction to achieve high production quality. While primarily a school drama, the series has unexpectedly resonated with middle-aged viewers in their 40s and older, gaining significant popularity among that demographic.

Budget Cuts & the Future of Casting

As production budgets shrink, filmmakers are turning to rookie actors—often from independent films or theater—to cut costs while maintaining strong performances. However, star-driven films remain a challenge. Without big-name leads, initial marketing hurdles can be difficult to overcome. To balance cost and appeal, studios are increasingly casting K-pop idols in lead roles to attract international fan bases.

One example is TWICE’s Dahyun, who is making her big-screen debut in You Are the Apple of My Eye (premiering Feb 21). Co-starring B1A4’s Jinyoung, the remake of the Taiwanese classic taps into nostalgia-driven storytelling.

However, industry experts caution that idol casting comes with risks: “If an idol lacks acting experience, audiences struggle to immerse themselves in the story. Casting decisions should prioritize acting skills over fandom appeal,” Professor Lee emphasized.

The Road Ahead

With audiences gravitating toward OTT, shrinking budgets, and evolving casting trends, the Korean film and drama industry is facing a critical transformation.

Going forward, leaner budgets, digital-first releases, and strategic casting may be essential for survival in this new entertainment landscape.