South Korea's knowledge services deficit hits second-worst on record as Netflix, ChatGPT spending surges

Surging spending on overseas streaming services and AI platforms pushed South Korea's knowledge services trade deficit to its second-largest on record for any half-year period in the first half of this year.

According to the Bank of Korea's "2026 First-Half Knowledge Services Trade Statistics" released Thursday, the knowledge services deficit came to $6.44 billion in the first half of the year, widening by $1 billion from $5.44 billion in the second half of last year. The figure is the second-largest half-year deficit since the second half of 2010, when it reached $7 billion.

Breaking down the figures by category, the intellectual property royalties deficit grew by $900 million — from $4 billion in the second half of last year to $4.9 billion in the first half of this year. Multimedia copyright fees, which include streaming subscription costs, swung from a $290 million surplus to a $40 million deficit. The deficit in computer and mobile software copyright fees, which cover AI service charges, widened from $2.31 billion to $2.84 billion, hitting a record high.

On the surplus side, the cultural and leisure services surplus expanded from $530 million to $720 million. The surplus in performance and exhibition services, which reflects K-pop concert revenues, rose from $240 million to $330 million. The surplus in multimedia production services — covering dramas produced for overseas streaming platforms — also grew from $290 million to $380 million.

Park Seong-gon, head of the Bank of Korea's balance of payments team, said the intellectual property royalties deficit widened as payments for overseas industrial software related to semiconductors and digital services such as games increased. "The consistent growth in purchases and subscriptions to online services such as overseas streaming platforms and AI has also contributed to the widening deficit," he added.

Park said that while the absolute amounts tied to AI remain relatively modest, the pace of growth is extraordinary. "Based on simple card transaction data, the category that includes AI has doubled compared to a year ago," he said.

Park also said the continued global success of K-content drove cultural and leisure services exports to record highs for two consecutive half-year periods. "Exports of performance and exhibition-related services set records for four consecutive half-year periods starting from the second half of 2024, and multimedia production service exports ranked second-highest on record," he said.

The information and communications services surplus narrowed from $2.87 billion to $2.42 billion over the six-month period, while the professional and business services deficit shrank from $4.84 billion to $4.67 billion.

The contraction in the information and communications services surplus was partly due to a base effect from the record surplus posted in the second half of last year. Even so, the first-half surplus this year ranked second-highest on record for any half-year period.

By region, South Korea posted a surplus of $2.62 billion with Asia, while recording deficits of $3.32 billion with North America and $2.25 billion with Europe.