JTBC's crisis deepens Netflix dependence, threatening K-OTT's window of opportunity

The sense of crisis gripping South Korea's content industry has reached a point of no return. After months of financial deterioration, the breaking point came at JTBC. What began as a debt default ultimately spread across the entire JoongAng Group, pushing it to the brink of court receivership.

Production has already ground to a halt. Several variety programs — including "Scammers" and "Divorce Deliberation Camp" — have suspended broadcasts, and the drama series "Rediscovery of Love," set for release in the second half of the year, has halted filming. The Korea Communications Commission said it would closely review whether to renew JTBC's broadcast license, putting the channel's very existence in question.

The alarm is amplified by the fact that JTBC had been aggressively ramping up production budgets for dramas and variety shows. Industry insiders say the fallout will extend well beyond the fate of a single broadcaster. With JTBC's demand for miniseries-level dramas gone, fears are growing that competition for already-scarce broadcast slots will worsen further.

"Market conditions were already bad because of rising production costs, and fewer slots will make things even worse," said an official at a mid-sized drama production company. "Only studios under major broadcasters or large production houses will survive — smaller players will inevitably be weeded out."

Against this backdrop, industry observers are increasingly warning that the production sector will lean even more heavily on Netflix, the No. 1 streaming platform, as it is in effect the only platform capable of absorbing domestic production demand. Netflix released more than 30 Korean original titles last year alone, including 15 drama series, and has been expanding its influence further by strengthening its licensing lineup — including a partnership with SBS.

Talk of being unable to survive without Netflix as a major backer has become commonplace across the industry.

"As Netflix's influence has grown, the market has completely shifted from a content-driven structure to a platform-driven one," said an official at a variety show production company. Every decision — what to invest in, where to release it and how — now rests with the platform, the official said. "To talk about the sustainability of intellectual property, you first need to make money from your work. Variety content has long since moved beyond the realm of terrestrial and cable TV, and that trend will only accelerate," the official added.

Experts warn that deepening dependence on Netflix will ultimately hurt the entire industry. Netflix itself has limits to how much of the reduced broadcast demand it can absorb, and a market structure dominated by a single platform is not healthy for the broader ecosystem, they say. Particularly now, as global interest in K-culture is at a peak, calls are growing louder for government support to help K-OTT platforms expand internationally and lead the global spread of Korean content alongside the country's production capabilities.

The message from industry and academia alike is that South Korea cannot afford to miss the golden window for K-culture to fully establish itself as a global mainstream force.

Lee Won-hee, a professor at Hoseo University, said at a Korea Media Management Association seminar last month that "K-OTT platforms are the core infrastructure for K-content's global expansion." He argued that making K-OTT a central pillar of investment is the most efficient path to achieving policy targets of a 400 trillion won ($257 billion) K-culture market and 150 trillion won in content exports.

Kim Ji-hyun, a researcher at the Korea Creative Content Agency's Content Industry Policy Research Center, also urged that while K-content has already grown into a national strategic industry leading the global market, strengthening distribution and platform competitiveness alongside content quality is essential to keep pace with a global OTT-driven distribution landscape.

Among domestic K-OTT players, Tving stands at the forefront of that global push.

Moving beyond its domestic roots, Tving expanded into 18 regions worldwide at the end of last year, building out a K-content distribution network across North America, Europe and Southeast Asia. Its original series "Dear X," launched alongside the global rollout, topped charts in 108 countries on the global platform Rakuten Viki and ranked among the top Asian titles across 17 Asia-Pacific countries and territories on HBO Max.

Yet even as Tving demonstrates its global potential, the Tving-Wavve merger — widely seen as the last card in building a viable K-OTT ecosystem — has been adrift for three years. The two companies signed a memorandum of understanding in late 2023, raising hopes for a domestic rival to Netflix, but talks have stalled largely because KT Corp, Tving's second-largest shareholder, has remained reluctant to move forward.

Industry insiders expect that a completed merger would allow the combined platform to build a K-content value chain together with production companies and creators, driving both the self-sufficiency and global reach of the domestic content industry. Once the merger is finalized, the new platform's monthly active users are estimated to reach about 10 million, according to industry sources. Netflix's MAU currently stands at around 15 million.

"The JTBC crisis could paradoxically serve as a catalyst for broader consensus that the domestic OTT ecosystem genuinely needs to be built up," said an official in the platform industry. "If discussions around K-OTT don't pick up real momentum, the golden window for K-content will quietly pass us by. This is the last chance for homegrown OTT platforms to achieve economies of scale."