Korean Soaps in Crisis

Korean soaps, once at the crest of the Korean Wave all across East Asia, are facing a crisis.
The pay scale of stars is going through the roof, with production firms complaining they are on the verge of going bust. More seriously still, there are signs that overseas demand is dropping while domestic viewers are turning their backs.

The Corea Drama Production Association (CODA), a group of some 40 major drama production firms including industry leaders KimJongHak Production, Olive Nine and Chorokbaem Media, scheduled a press conference at the Korean Broadcasters Association in Yangcheon-gu on Friday where it is to announce concerted action. The assumption is clear: the Korean TV drama industry will wither if current conditions prevail.

CODA secretary-general Kim Seung-soo said, "Terrestrial broadcasters pay drama production firms just 40 to 60 percent of the actual production costs. And salaries for actors and writers are skyrocketing, so production costs are rising. There are no experimental dramas any longer."

The firms say star actors and writers get approximately W30 million (US$1=W939) per episode. With this, the average production cost per episode has skyrocketed to W150 million from W90 million four or five years ago.

"These days, making dramas inevitably brings in a loss on production,” one executive producer said. “And what’s worse, the terrestrial broadcasters in most cases get the copyright of dramas, taking full advantage of their prominent position."

"Even a drama with an average viewer rating above 30 percent makes a loss,” said another. “The pay scale for writers and actors has doubled from three years ago, but the share the terrestrial broadcasters pay production firms has changed little."

Now exports are sharply down too. According to the Korean Broadcasting Institute, exports of Korean soaps fetched US$101.62 million in 2005, but that shrank to $85.891 million in 2006 - the first time that drama exports dropped since 2000.

In Korea, they rarely attract viewer ratings above 20 percent. According to an AGB Nielsen Media Research survey, there were 11 dramas with average viewer ratings above 20 percent in 2004 and 2005, but only six in 2006 and seven in 2007.

KBI Researcher Kim Young-duk said, "Due to increased costs, Korean dramas are more expensive than U.S. dramas in Japan, and as a result they can’t stay competitive. Soaps starring the original Korean Wave celebrities have been all consumed in East Asia over the last few years, so it’s likely that drama exports will continue dropping."