Studio Dragon turns to AI actors as soaring production costs send share price tumbling

Studio Dragon's share price, which once topped 120,000 won ($86), has fallen to around 20,000 won.

Studio Dragon, South Korea's leading drama production company, is expanding its use of AI in drama production as it seeks to escape a deficit caused by runaway production costs. AI actors are expected to appear in K-dramas before long.

Per-episode production costs, which stood at just 300 million to 400 million won only a few years ago, have since surged to as much as 2 billion won.

Lead actors' per-episode fees — widely cited as the main driver of the cost surge — now reach 300 million to 500 million won. Even when a drama becomes a hit, production companies are failing to turn a profit because of the cost burden, and share prices have collapsed as a result.

Studio Dragon is expected to cut production costs by 30 percent through AI-driven efficiency measures. The company swung to a second-quarter operating profit of 15.4 billion won from a loss in the same period a year earlier.

Studio Dragon rode a string of hit titles to a share price that once exceeded 120,000 won. Its catalog includes "Crash Landing on You" (2019–20), "Sweet Home" (2020), "Vincenzo" (2021), "The Glory" (2022–23), "Marry My Husband" (2024), "Queen of Tears" (2024) and "The Tyrant's Chef," as well as this year's second-quarter hits "Becoming a Legend as a Mess Sergeant," "Yumi's Cells 3" and "See You at the Office Tomorrow."

Content stocks used to rise alongside a drama's success. That dynamic has changed. Most production companies are no longer making money, and share prices have fallen sharply — from 120,000 won to around 20,000 won.

Cutting production costs through AI actors has shifted from an option to a necessity.

"Director Kim," considered the biggest drama hit of the year, also made use of AI technology. A roughly three-minute sequence depicting the backstory of the protagonist, Director Kim (played by So Ji-sub), a former special agent, was produced entirely with AI.

Shooting that sequence through conventional means would have been costly. The production instead used AI to create the extended scene, cutting costs by more than 60 percent.

AI actors have already made their debut in China. Chinese content company Yaoke Media drew attention after releasing a drama featuring an AI actor in the lead role, according to Chinese media reports. Top Chinese actors command per-episode fees exceeding 100 million won, and production companies have turned to AI actors to reduce the burden of talent costs that can run into the tens of billions of won per project. The absence of risk from unexpected on-set accidents is also cited as an appealing factor.

With lead actors' per-episode fees reaching 400 million to 500 million won and production costs surging, AI has emerged as a viable alternative for keeping drama budgets in check.