SEOUL, - The South Korean government has announced a comprehensive plan to support and expand the country's thriving video content industry, despite challenges like monopolization and financial strains. This initiative comes as the industry faces a critical crossroads, despite the global success of Korean productions on streaming platforms such as Netflix.
According to Yonhap News Agency, the Ministry of Culture, Sports and Tourism unveiled the ambitious plan on Tuesday, aiming to increase the industry's value to 40 trillion won ($30.7 billion) by 2027. Additionally, a significant fund of 1 trillion won is set to be established by 2028 to aid in the production of globally competitive content.
Culture Minister Yu In-chon, in a press briefing in Seoul, emphasized the potential of Korea's video content industry and the urgency of addressing its challenges. The government's rapid response to these issues reflects the critical nature of the situation facing the industry.
To achieve the set target of a 40 trillion won industry value and $1.8 billion in exports by 2027, the industry needs to grow annually by 6.1 percent and 11.9 percent, respectively, from its 2021 figures of 28 trillion won in size and $920 million in exports. The Ministry's goal includes creating at least five globally recognized hits, such as those awarded at the Emmys and Oscars, within the next five years.
The new civilian-government fund, focusing on "killer content" and intellectual property with high global success potential, marks a shift from the government's current support for smaller content creators. This fund will concentrate on larger-scale projects.
Moreover, the government plans to introduce tax benefits to stimulate the industry further. Starting next year, up to a 30 percent tax deduction will be offered for video content production, and the costs associated with content planning may also become eligible for these incentives.
The Ministry is also considering income tax deductions for subscription fees to local streaming services, in response to the rising trend of "streamflation," where households face increased prices for streaming services.
While the government's announcement is a positive step for content producers and local streaming platforms, it also addresses the issue of content rights. Korean content producers often relinquish full rights to global streaming companies in exchange for production costs. The Ministry aims to implement measures to help Korean producers retain their content rights and generate more income from successful content.
However, the government's top-down approach, including setting ambitious targets like producing five global hits in five years, may have limitations. Industry stakeholders, ranging from creators and producers to streaming platforms, need to be involved in fine-tuning growth-oriented policies and ensuring transparency in fund allocation. This collaborative effort is crucial to avoid hasty or misguided investment decisions and to effectively address the challenges facing South Korea's video content industry.