K-Drama Stocks Plummet after Netflix Slashes Film Funding over Huge User Loss

Shares of Korean drama production studios plunged on Wednesday after Netflix Inc. announced a cutback on financing films and TV shows following a huge user loss of 200,000 subscribers in the first quarter.

According to Bloomberg News, regional K-drama production companies’ shares dipped by 2% on Wednesday, driving the Kosdaq Index, which comprises nearly a dozen such stocks, to a low. This comes after Netflix Inc.’s shares plummeted by 26% after it projected an additional 2 million subscriber loss after being dropped by 200,000 users for the first time in a decade.

Studio Dragon Corp. and Jcontentree Corp. were among the South Korean studios to sustain major losses at 6.3% and 5.2% respectively, reported Bloomberg News.

However, analysts contend that the current fall in stock prices will not last for long as the streaming giant is unlikely to slash funding in Asia which has earned Netflix a significant number of subscribers spurred by hit shows such as the South Korean dramas “All of Us Are Dead” and “Squid Game”.

Instead, Netflix will be instituting cutbacks in the U.S. and in places outside Asia. Hana Financial Investment Co.’s Lee Kihoon contended, “Netflix will increase spending in South Korea because Asia is the only place where it is seeing growth.”

©Photo: Netflix