Netflix’s revenue in South Korea exceeded $700 million last year, but more than 80% of that amount was paid to its U.S. headquarters, according to newly disclosed figures. While the success of Korean content has rapidly expanded Netflix’s local business, production companies generally receive margins of only 3% to 10% of production costs, prompting calls to expand revenue-sharing arrangements tied to a show’s performance.
Rep. Han Jun-ho of the Democratic Party of Korea, a member of the National Assembly’s Science, ICT, Broadcasting and Communications Committee, said on the 14th that Netflix’s South Korean revenue reached 1.0542 trillion won in 2025, up 1.7 times from 631.7 billion won in 2021.
According to Han’s office, most of that revenue went to Netflix’s U.S. headquarters. Of the 1.0542 trillion won generated in South Korea in 2025, 853.9 billion won, or 81%, was paid to the U.S. parent company under the category of “consideration for subscription membership purchases.” As a result, Netflix’s South Korean entity recorded operating profit of 20.3 billion won, with an operating margin of just 1.9%.
Korean content has been a key driver of Netflix’s growth, but the production companies behind it receive a limited share of the returns. Netflix often secures ownership of much of the intellectual property for its original productions. Squid Game, which ranked No. 1 among Netflix’s TV titles of all time with a combined 600.36 million views across Seasons 1 through 3, is also entirely owned by Netflix in terms of intellectual property rights.
The revenue structure is also largely tied to production costs. In exchange for covering the full production budget, Netflix typically pays production companies a margin of around 3% to 10% on top of those costs. This structure makes it difficult for production companies to benefit financially even when a show becomes a major hit. Industry voices have therefore called for wider adoption of performance-based revenue-sharing arrangements that provide additional compensation based on a production’s success.
Han said, “Netflix has become a service that nearly half the population pays to watch, yet it sends 80% of its 1 trillion won in domestic revenue to its headquarters, leaving its South Korean entity with operating profit of just 20.3 billion won.”
He added, “Production companies that create the content receive margins of only 3% to 10% of production costs, regardless of how successful their work becomes.” He stressed that Netflix should take on responsibilities commensurate with its influence, including providing additional compensation based on a title’s performance.