JTBC's financial troubles raise alarm for K-drama industry

Actor Lee Sung-min in a scene from the JTBC drama "Reborn Rich (2022)"/ Courtesy of JTBC

JTBC, once hailed as the broadcaster that transformed Korea's television drama industry, has entered court-led rehabilitation proceedings, sending shockwaves through the entertainment business and raising concerns about the future of the country's drama production ecosystem.

The network, which produced hit series such as "Itaewon Class," "The World of the Married," "SKY Castle" and "Reborn Rich," had long been regarded as the standard-bearer for premium Korean dramas and a driving force behind the success of the country's general programming cable channels.

Earlier this month, JTBC declared a default after failing to repay 20.6 billion won ($15 million) in asset-backed borrowings that had reached maturity. Industry observers say the immediate cause was its failure to refinance asset-backed securities (ABS) amid prolonged financial difficulties.

The crisis quickly spread across the broader JoongAng Group. Listed media company ContentreeJoongAng and cinema operator Megabox JoongAng also entered rehabilitation proceedings, exposing wider liquidity problems within the conglomerate.

JoongAng Group Vice Chairman Hong Jeong-do leaves Seoul Bankruptcy Court in Seocho District, Seoul, Tuesday, after attending a court hearing for representatives of five JoongAng Group affiliates, including JTBC, that have filed for court rehabilitation. Yonhap

Hong Jeong-do, vice chairman of JoongAng Group, publicly apologized at a press conference.

"JoongAng Holdings and several affiliates have applied for court rehabilitation," he said. "I sincerely apologize for causing concern with the situation we face today."

For many in the industry, however, the issue goes beyond financial restructuring. The bigger question is what JTBC's troubles mean for Korea's drama industry and its creative workforce.

From industry disruptor to financial distress

Beginning in the mid-2010s, JTBC reshaped Korea's television landscape with a string of critically acclaimed and commercially successful dramas, including "Secret Affair," "The Lady in Dignity," "SKY Castle," "Itaewon Class," "The World of the Married" and "Reborn Rich."

Posters for JTBC dramas "The World of the Married (2020)," left, and "SKY Castle (2018)" / Courtesy of JTBC

The network earned praise for challenging the dominance of terrestrial broadcasters by investing aggressively in high-quality productions and exploring more diverse and sophisticated storytelling.

But the media landscape has changed dramatically.

As global streaming platforms such as Netflix expanded their presence in Korea, traditional broadcasters found it increasingly difficult to compete. In the past, production costs could largely be recovered through television advertising and scheduled broadcasts. Today, audiences have shifted their viewing habits toward streaming services, while the traditional TV advertising market has steadily contracted.

A smartphone with the Netflix logo lies in front of the words "streaming service" in this illustration, March 24. Reuters-Yonhap

At the same time, production costs have soared. Fees for top actors and writers have climbed sharply, while expenses for filming equipment, computer-generated visual effects and large-scale sets have all increased. Big-budget Korean dramas costing several hundred billion won are no longer unusual. Projects that once would have been considered lavish with budgets of around 10 billion won are now often eclipsed by productions costing 50 billion won or more.

Domestic broadcasters, meanwhile, remain heavily dependent on advertising revenue and content licensing, leaving them at a structural disadvantage in the escalating battle over production budgets — a challenge that extends well beyond JTBC.

Ripple effects across industry

JTBC's financial troubles are drawing particular attention because of the broadcaster's central role in Korea's drama production ecosystem.

The network serves as more than just a broadcaster. It is a key investor and commissioning partner for numerous production companies, writers, directors and actors. Production companies affiliated with JTBC and ContentreeJoongAng account for a significant share of the country's drama output.

From left, actors Jin Goo, Lee Joo-myung, Jeon Hye-jin and Lee Jun-young pose during the press conference for JTBC's upcoming weekend drama "Reborn Rookie" at The Link Hotel in Guro District, Seoul, May 28. Yonhap

Industry insiders now fear a further decline in drama production.

Broadcasters have already been reducing the number of original series they commission as advertising revenues weaken and production costs continue to rise. If JTBC's investment capacity shrinks further, more projects could face delays, downsizing or cancellation.

Smaller production companies are expected to be particularly vulnerable.

Companies without partnerships with major broadcasters or global streaming platforms may find it increasingly difficult to secure financing. With the industry already under financial pressure, the instability of a major broadcaster could further worsen conditions throughout the sector.

Concerns for freelance production workers

The crisis has also heightened concerns over employment in the broadcasting industry.

On June 19, the Hanbit Media Labor Rights Center issued a statement urging JTBC to introduce measures to protect freelance writers, producers, assistant directors and other production staff working under contract with the broadcaster.

The organization noted that Korea's broadcasting industry relies heavily on outsourced production and freelance labor, warning that the financial burden of corporate restructuring is often passed on first to workers in the field.

The concern comes as the drama industry has already experienced a growing number of project cancellations, postponements and reductions in annual production, resulting in fewer job opportunities for production crews.

Should JTBC's rehabilitation process further disrupt commissioning and investment, uncertainty across the production sector is expected to deepen.

While it remains unclear how the court-supervised restructuring will unfold, industry observers say the consequences are likely to extend far beyond a single broadcaster, with lasting implications for Korea's television drama industry as a whole.

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.