Netflix, Tving to bear brunt of depleting film fund

The Netflix logo is seen on one of the company's buildings in Hollywood, Los Angeles, California, U.S. Reuters-Yonhap

Netflix and Tving may have to supplement the fast-depleting film fund, pending a government decision to charge over-the-top (OTT) media service providers hefty fees to create a more sustainable content generation system. 

Behind the move are concerns over the plunging number of moviegoers over the past few years. Currently, 3 percent of admission fees are sourced for the fund. In 2022, the film development fund was able to raise 17.9 billion won ($13.3 million), only a third of the 54.6 billion won figure raised in 2019, shortly before the onset of the COVID-19 pandemic. Many have stayed home, consuming content provided by OTT service providers, fueling criticism that the new, pandemic-aided market players thrive at the expense of the fund.

Whether and by how much the government will be able to make OTTs pay remains to be seen, since a rise in financial costs shouldered by the service providers will almost certainly translate into higher user fees for consumers.

According to sources in the Ministry of Strategy and Finance and the Ministry of Culture, Sports and Tourism, they may  consider mandating a monetary contribution by the OTTs.

The finance-ministry-commissioned fund evaluation team made the recommendation last year that Korea should look at France as a case study when raising funds to be paid by OTTs. 

The recommendation came as the film development fund had to borrow 80 billion won from the state-run fund management fund in 2022. 

Calls are mounting for an overhaul of the fund's structure so as to reduce the current reliance on movie ticket sales.

The film development fund was created to promote the creation, production and export of locally made films as well as small-niche independent and artistic films.