Netflix Korea’s revenue reached 1 trillion won, with 81% going to headquarters

In South Korea, 1,000,000,000,000 won (1 trillion won) was distributed, and the question is why most of it went to the headquarters.

At Netflix Korea, the first Korean entity to exceed 1,000,000,000,000 won in annual revenue, 853,900,000,000 won out of the total 1,054,200,000,000 won was remitted to the U.S. headquarters. Looking at the figures alone, a significant portion of the revenue earned in Korea was transferred across borders. This represents 81.0% of the total revenue.

The figures released by the office of Democratic Party of Korea member Han Jun-ho are based on an analysis of Netflix Services Korea’s 2025 fiscal year audit report. The operating profit of Netflix Korea was 20,300,000,000 won, and the operating profit margin was only 1.9%. While revenue increased, the profit remaining with the domestic entity was relatively small. It appears that while a feast of revenue was set up in Korea, the bill was taken elsewhere.

I do not believe that this situation should be simply summarized as “money flowed overseas.” Nor should the figure of 81.0% be treated as mere decoration. The key issue is how the money paid by subscribers is distributed through various contracts and accounting structures, ultimately divided into amounts paid to the headquarters, profits of the domestic subsidiary, and the content ecosystem.

Can a subscriber know where the money from their subscription goes?

Netflix Services Korea’s domestic revenue increased from 631,700,000,000 won in 2021 to 1,054,200,000,000 won in 2025. The fact that the Korean market is a significant market for Netflix no longer needs to be explicitly stated. According to the Broadcasting Media and Communications Commission’s 2025 survey of media usage behavior, the paid usage rate of Netflix was 46.7%, while that of TVing was 13.0%.

A service with a usage rate approaching half generated revenue in the 1-trillion-won range in South Korea. The subscription fee each of you readers pays every month is one piece of what makes up this figure. Therefore, the question of “where does the money I pay go?” is not a concern solely for accounting experts. It is an everyday question that anyone who receives a payment notification next month can ask.

According to the audit report, the 853,900,000,000 won paid to the U.S. headquarters is classified under names such as “consideration for the purchase of subscription memberships.” This amount may include various transaction elements, such as global service operation, content usage rights, and technology and platform provision. Therefore, it is not appropriate to directly refer to the amount paid to the headquarters as the total subscription fees of Korean users, nor to definitively conclude that it constitutes illegal profit transfer and tax evasion.

However, the fact that something can be explained and the fact that the explanation is sufficient are different issues. Readers still want to know why this amount was calculated, which contracts and standards were applied, and how the Korean entity’s profits and taxes were determined. The information released this time does not sufficiently reveal the headquarters’ payment structure and the basis for transfer pricing. When the numbers are large, the explanations must also be substantial.

Korean content has gone global, but how much of that success has returned to Korea?

If there is one force that has made Netflix what it is today—a global media giant and Korea’s number-one platform—it would, in the words of lawmaker Han Jun-ho, be “above all, the power of K-content.” Korean dramas and variety shows have reached viewers around the world through Netflix, and Netflix has become a gateway for domestically produced content to enter overseas markets. This is an undeniable achievement. The fact that there is now a broader opportunity to show works to viewers who would have been difficult to reach through domestic platforms alone should not be taken lightly.

However, the size of success and the size of the reward for that success do not always move together. Representative Han Jun-ho mentioned in a Netflix investment project that the profit margin for domestic production companies is around 3-10%, and argued that appropriate additional compensation is necessary for the production team when a work achieves global commercial success. However, this does not mean that all works have the same contract terms. There may be contracts where Netflix handles intellectual property rights and global distribution in exchange for securing production costs and a certain profit margin, and this should be evaluated by considering both the securing of production costs and the burden of risk.

In my opinion, the core of the debate is not about whether “Netflix is right” or “the production company is right,” but rather who bore the risk when the work achieved commercial success, who created the value, and what criteria should be used to distribute the additional profits that arise after success. If creators must relinquish all rights after a work becomes successful simply because they received production costs, then success for creators will only result in applause. Applause is wonderful, but it doesn’t go into the bank account.

Representative Han Jun-ho stated, “In line with the global commercial success of the work, appropriate additional compensation after the fact should be provided to the production team, and efforts should be made to achieve mutual benefit and fulfill social responsibility in proportion to its market influence.” This demand is not simply about increasing appearance fees, but rather it raises questions about the contractual practices within the content industry. If Korean works have achieved increased global revenue and platform influence, then how the benefits of that growth are distributed to production companies and creators should also be made public.

As Netflix grows, the space for domestic OTT services is shrinking.

Netflix’s increase in revenue in South Korea is not limited to the growth of a single company. In the same market, TVing recorded 69,800,000,000 won in operating losses in 2025, while Wavve recorded 12,200,000,000 won in operating losses. While Netflix significantly surpasses TVing with a paid subscription rate of 46.7% compared to TVing’s 13.0%, domestic OTT services are simultaneously facing demands for increased content investment and improved profitability. It appears to be a competition between those carrying heavy loads on both hands and those who have already secured a wider path.

If this disparity continues, it is highly likely that changes will occur for users as well. If the number of platforms decreases, the range of content choices may actually become more concentrated on specific platforms, rather than expanding. In a market with weakened competition, it becomes difficult for users to influence pricing and content provision conditions in the direction they desire. It has not been confirmed whether Netflix’s headquarters payment structure directly influenced the increase in subscription fees. However, as market dominance increases, it is important to consider both the range of services that users can choose from and the investment capacity of domestic businesses.

Attributing the losses of domestic OTT services directly to Netflix is not entirely accurate. Each domestic company has different content strategies and cost structures, and Netflix has also had the effect of providing Korean and global content to Korean users while expanding the overseas reach of Korean productions. While competition can sometimes foster industry growth, excessive imbalance can render competition merely superficial. I believe that the Korean OTT market is now at a critical juncture where it needs to carefully examine this balance.

Now, what needs to be verified is not the size of the sales, but the structure of the contract.

The figures presented represent the accounting scope of Netflix Korea. This is not the same as the total revenue that the entire Netflix group generates from Korean content in the global market. Therefore, one cannot calculate the total economic value that Netflix derives from Korea based solely on the domestic subsidiary’s operating profit of 20,300,000,000 won.

Conversely, due to these limitations, it is not possible to simply pass over the 853,900,000,000 won paid to headquarters without any explanation. The 1,054,200,000,000 won in domestic revenue and the 81.0% headquarters payment ratio represent the starting point for examining the contract structure, taxation, and the platform’s social responsibility. Readers should be able to verify the amount of corporate tax paid by the Korean entity, the relationship between the headquarters payment and global content production costs, and how additional compensation for successful works is determined.

The official rebuttal from Netflix or the details of the contract have not been sufficiently confirmed based solely on the information released this time. However, it is necessary to be cautious about amplifying suspicions as if they were facts. This is especially true for those who dislike fraud or deception. The moment one claims to know something they do not, criticism transforms from oversight into another form of deception.

However, demanding transparency is entirely different from issuing a guilty verdict. As Netflix’s revenue and content influence have grown in the Korean market, the demand for a more detailed explanation of its headquarters’ payment structure and the criteria for compensating production companies is entirely justified. As the platform expands globally, the contracts should be readable by those who remain in the country.

Netflix recorded revenue in the 1 trillion won range in South Korea. Now, the questions that the industry and users must ask no longer stop at “how much was earned.” They are who made that money through their efforts, according to what rules it was divided, and who will receive a fairer share of the next success. The ending of good content comes with applause, but the ending of a good industry is only complete when it also shows a fair settlement statement.

Frequently Asked Questions.

What is the revenue of Netflix Korea in 2025?

Netflix Services Korea’s domestic revenue for 2025 is 1,054,200,000,000 won. This is the first time that the company has exceeded 1,000,000,000,000 won in the South Korean market.

What is the reason that 81.0% of the revenue was paid to the U.S. headquarters?

In 2025, 853,900,000,000 won of the total revenue was paid to Netflix, the US headquarters, under the designation of “consideration for the purchase of subscription memberships,” among other items. However, the detailed calculation methods and contract details were not fully disclosed.

What is the operating profit of the Netflix Korean entity?

The operating profit for 2025 is 20,300,000,000 won, and the operating profit margin is 1.9%.

Do Korean production companies and creators receive additional compensation due to the commercial success of Netflix productions?

It has not been confirmed that all the contract terms for each work have been confirmed. Representative Han Jun-ho stated that the profit margin for domestic production companies is around 3% to 10%, and argued that additional compensation is necessary after global commercial success.

Is Netflix more frequently used than domestic OTT services?

In the 2025 broadcast media usage behavior survey, the paid usage rate for Netflix was 46.7%, and for TVING, it was 13.0%.

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