The Queen of Tears paid a salary of 90 billion to Kim Soo Hyun, how did the producer make a profit?

The Korean drama " Queen of Tears" produced by Studio Dragon is currently creating a global fever. Because this work invested up to 40 billion won in production costs for 16 episodes, its success is of great interest to the audience.

Recently, news about male lead Kim Soo Hyun's salary became a controversial topic. There is information that Kim Soo Hyun proactively asked to reduce his salary to 300 million won/episode (total of 16 episodes is about 88 billion VND) to reduce the burden on producers, in the context of the Korean film industry. are having difficulty.

But there are still many people who are upset because A-list stars receive too high salaries, causing production costs to increase.

In particular, discussion broke out after a report said that Kim Soo Hyun, often considered the highest-paid K-Drama actor, received 300 million won (about 222,000 USD) in appearance fees per episode for tvN 's viral drama Queen of Tears .

One netizen reacted to this report, noting that, in comparison, Japanese actors are paid a lot less. They highlight some figures, such as that in 2022, famous actor Oguri Shun received about 5 million won (about 3,700 USD) per episode for an NHK drama - the leading television network in Japan.

Similarly, another famous Japanese actor - Aragaki Yui - was paid about 3 million won, and Suda Masaki received 2 million won per episode in their most recent projects.

The OP ended the post adding that they feel Korea overpays its actors and should adopt Japan's structure instead. Many netizens agree with this point of view, demanding changes in the domestic manufacturing industry.

However, according to The Bell: "From the perspective of manufacturing companies, such large-scale investments do not cause as much burden as common concerns. As production costs increase, the scale of revenue and profits The profits earned by the manufacturing company also increased."

In this case, Studio Dragon completed the recovery of investment capital even before the film aired.

The profit structure from the television film business stipulates that the production company can recover part of the production costs before releasing the film, through revenue from television stations (broadcasting fees) or revenue. advertisement.

However, with the emergence of global OTT (streaming platforms) like Netflix and the "simultaneous broadcasting" model, the profit structure has changed.

5 years ago, the production cost of each Korean television episode was about 500-700 million won, a total of 16 episodes could hardly exceed 10 billion won. If production costs increase, the capital recovery rate will certainly decrease. Because movies are only broadcast on television, there will be limits on broadcasting fees and advertising revenue.

However, nowadays, due to competition between OTTs, many big-budget blockbusters (big IPs) are released, up to billions of won per episode. This means that the production company has another large source of revenue coming from OTT.

In the case of a movie with "huge" production costs like "Queen of Tears", the capital recovery rate through tvN broadcasting fees is estimated at about 50%. Studio Dragon aims to return capital and earn remaining profits from Netflix.

In general, blockbuster films are produced with almost confirmed pre-sale of rights. Studio Dragon has signed a contract to provide content for Netflix from 2020 to 2022 with 6 movies at the same time, and 2 original movies each year.

According to the contract terms at the time, the capital recovery rate through Netflix was 60% of production costs. IP giants are said to have higher premiums than that.

Considering that Netflix bought the movie rights to "Mr. Sunshine" (2018) and "The King: Eternal Monarch" (2020) with a 70% return rate, "Queen of Tears" is estimated to have guaranteed at least 70% of its costs. production fees from Netflix. In other words, the broadcast fee (50%) and pre-sale fee from Netflix (70%) exceeded the break-even point (BEP) for the producer.

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