DramaFever, one of the two leading Korean drama streaming services in the world, has shut down.
While DramaFever had shown signs of slow-down in the UK, with fewer new titles made available in the past two years, the streamer had however shown ambition to roll-out into new markets such as India and the rest of Europe. It was so far available in North America, South America, Oceania and the United Kingdom.
However, the rising licensing cost for K-dramas had become a major issue, with even independent Korean producers easily asking for over $100,000 in minimum guarantees (MGs) for the U.S. only. Other sources also claim premium Korean dramas commanding $1 million per season, versus $800 thousands previously. This is particularly true in the case of Korean dramas from Korea’s two largest cable channel operators, CJ E&M and jTBC, with whom Netflix closed exclusive global deals, making DramaFever reliant on Korean public broadcasters’ output, which had not delivered a hit for in the last year or two.
With Viki, already the leader in ad-funded Korean drama streaming (DF had an AVOD tier in the U.S.), moving into ad-free subscription with a more competitive price ($2.99 per month, vs. $4.99), DramaFever was already put under pressure in its native market, the U.S. Despite ex-CEO Seung Bak claiming DramaFever had reached 15 million users in 2014, it started discounting its subscription fee aggressively, even offering a $0.99 monthly fee for international subscribers in 2015, and then putting up episodes for free on YouTube to drive “new audiences.”
As such, with low ad revenues in the U.S. and challenged subscription revenues globally, it only took Netflix a few months to break the camel’s back, all the more as public broadcasters KBS and MBC have halted most productions since staff went on strike last September.
Although AT&T announced it would be pooling content from the former Warner Digital Networks’ ventures for its upcoming direct-to-consumer (D2C) offering, it is very unlikely consumers will get to watch Korean dramas on there. The departure of executives in charge of Korean content acquisitions, such as Tim Lee, would confirm that.