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[Alpha Biz= Kim Jisun] Netflix Korea posted record-high revenues and improved profitability in 2023, nearing ₩900 billion in annual sales. In stark contrast, domestic OTT platforms Tving and Wavve are still facing steep losses as they push for a merger to achieve economies of scale.


According to disclosures filed with South Korea’s Financial Supervisory Service on Monday, Netflix Services Korea, which manages local sales operations, generated ₩899.7 billion in revenue last year, marking a 9.3% increase from the previous year. Operating profit also rose sharply to ₩17.4 billion, a 44.2% year-on-year increase.


The growth was largely fueled by strong local demand for hit Korean content such as Squid Game Season 2 and Black and White Chef. Netflix noted that since 2023, Korean productions have consistently topped global viewership among non-English content, underlining their international appeal.



However, the company’s operating profit margin remained thin at just over 1%. This was due to the ₩732.4 billion in licensing fees paid to Netflix’s U.S. headquarters—essentially the cost of acquiring the membership content from the parent company. As a result, most of the revenue generated from Korean subscribers flowed overseas.



Netflix Services Korea has also been paying out retained earnings to its headquarters in the form of interim dividends—₩28 billion in 2023 and ₩9.5 billion so far in 2024. With limited domestic profit, the company’s corporate tax contribution remained relatively low, amounting to just ₩3.9 billion last year.



Meanwhile, local OTT services remain in the red. Tving, owned by CJ ENM, saw its revenue grow 33.4% year-on-year to ₩435.5 billion, thanks in part to the popularity of Korean professional baseball broadcasts and the launch of an ad-supported subscription tier. However, it still posted an operating loss of ₩71 billion—albeit an improvement from the ₩141.9 billion loss in the previous year.



Wavve, on the other hand, experienced a decline in revenue compared to the previous year and continues to lag behind Tving in both scale and growth.

 

 

 

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