Ryoo Seungwan Directs Shin Se Kyung in New Film

The film "Humint" was released on Netflix 49 days after its theatrical release, achieving a turnaround by ranking in the TOP 10 in over 80 countries worldwide and securing the number one spot globally in the film category. This outcome comes after the film recorded a loss of approximately 20 billion won against a total production cost of 27 billion won, with 1.98 million viewers and 17.8 billion won in revenue during its theatrical run. The investment distributor, NEXT ENTERTAINMENT WORLD (NEW), had to compensate for this loss through overseas sales, but to resolve its cash flow issues, it chose a drastic measure: selling all ancillary market distribution rights to Netflix in exchange for a lump sum payment.

By covering "Humint's" losses and pushing for its global release, Netflix has secured "killer content" essential for maintaining the annual 1 trillion won subscription economy in the Korean market. Furthermore, it has contributed to gaining an advantage in the competition against Disney+ and Coupang, and to increasing its global subscriber base. Additionally, it has paved the way for director Ryoo Seung-wan to enter the global stage and, following collaborations with directors Park Chan-wook and Lee Chang-dong, has gained strategic benefits by strengthening "informant-like" partnerships with domestic creators.

"Humint" was released in a "quasi-original" format, a hybrid of Netflix licensing and original production. This differs from originals, where Netflix exclusively owns all rights, and from licensing, where Netflix purchases broadcast rights for a film from the production company. Netflix is already expanding its influence in the Korean film industry by producing director Park Chan-wook's "The Whirlwind" and director Lee Chang-dong's "Possible Love" as originals.

The Netflix release of "Humint" has reignited the debate over "hold-back" periods within the film industry. Hold-back refers to the system that determines the period during which a film moves from theatrical release to other platforms like IPTV, VOD, and OTT, in order to maximize theatrical revenue. The current bill pending in the National Assembly to mandate a 6-month hold-back period is intensifying the conflict of opinions between theaters and non-theatrical entities (investors, production companies, distributors). The IPTV industry, in particular, is concerned about the collapse of its intermediate paid service system if films move directly from theaters to OTT.

In this situation, the market is expected to find a compromise. The three major telecommunications companies are likely to increase direct investment in Korean films to strengthen IP ownership, potentially intensifying competition between IPTV and Netflix. Theaters will likely adopt strategies to maximize space efficiency by increasing screenings of box office hits like "King and the Clown" and holding various events. Netflix may explore ways to increase support for Korean film production, similar to the case in France, which could mark a turning point in the market structure.