Broadcast networks, streaming sites join forces amid shifting industry dynamics

SBS to supply content to Netflix for six years

By KTimes

Broadcast networks and global streaming platforms are actively collaborating, marking a shift from the past when domestic broadcasters exclusively provided content to their own platforms with little interaction with international services.

As global streaming platforms face stagnating subscriber growth and broadcasters struggle with financial losses, these entities are increasingly finding common ground.

In December, MBC began airing two episodes of the Disney+ drama "Moving" every Sunday night. This marks the first instance of a domestic broadcast network airing content produced by a streaming platform.

At the same time, SBS recently entered a partnership with Netflix, offering dramas like "The Sandglass" and "Stove League," along with variety and current affairs programs such as "Running Man" and "Unanswered Questions."

Under the agreement, Netflix will stream SBS’ flagship programs for the next six years.

The collaboration between broadcasters and streaming platforms brings several advantages. For SBS, supplying its past content to Netflix facilitates international expansion and secures investment for producing new dramas.

Market analysts predict that SBS’ distribution revenue could increase its annual operating profit by 30 to 50 billion won ($23 to $38 million). This has also led to a sharp rise in SBS’ stock price, with its global visibility expected to grow significantly.

An SBS official said, “Just as the BBC enhanced its global competitiveness through its partnership with Netflix, SBS has decided to take this step to strengthen its market position.”

The collaboration is part of SBS’ strategy to overcome challenges such as rising production costs and declining ad revenues.

For Netflix, the partnership enables the platform to provide diverse, high-quality content to its subscribers at a relatively low cost, giving it an edge in the competitive streaming market.

Although the anticipated merger between domestic platforms Tving and Wavve was expected to challenge Netflix’s dominance, acquiring SBS' content may reduce the synergy originally expected from the merger.

Concerns about overdependence on Netflix

Strategic alliances between broadcasters and streaming platforms are expected to become more prevalent in the future. However, there are growing concerns that such collaborations could weaken the momentum of domestic content production.

Yoo Geon-sik, an adjunct professor at Sungkyunkwan University’s Graduate School of Media and Culture, said, “If MBC and KBS, following CJ ENM, JTBC and SBS, also begin supplying content to Netflix, the oversupply could lead to Netflix paying broadcasters less, which could further strain the domestic content production market in the long term.”

Since Netflix entered the Korean market a decade ago, drama production costs have surged, leading domestic broadcasters to scale back on drama production and programming.

Industry experts emphasize the need for long-term strategies beyond short-term profit generation, such as securing intellectual property (IP) rights.

Kang Kyung-seok, head of the Industrial Policy Team at the Korea Creative Content Agency, said, “Due to the underdeveloped domestic investment environment, it’s difficult for producers to assert strong IP rights. For the sustainable growth of Korea’s content industry, there must be increased investment and fair profit-sharing in the content market.”

This article from the Hankook Ilbo, the sister publication of The Korea Times, is translated by a generative AI system and edited by The Korea Times.