(Reuters) -Netflix Inc said on Tuesday it will invest $2.5 billion in South Korea over the next four years to produce Korean TV series, movies and unscripted shows, doubling its investment in the market since 2016.
The U.S. streaming service made the announcement after a meeting between South Korean President Yoon Suk Yeol and Netflix (NASDAQ:NFLX) co-CEO Ted Sarandos. Yoon arrived in Washington on Monday for a six-day state visit.
President Yoon welcomed the investment as a “major opportunity” Netflix and the content industry of South Korea as the latter seeks to boost its cultural exports and influence.
Shares of South Korean production and entertainment companies rallied, with Showbox and Studio Dragon up 8.75% and 2.26%, respectively, compared to the country’s smaller Kosdaq index’s 2.21% drop.
Known as the “Korean Wave” or Hallyu, South Korea’s entertainment industry has enjoyed a global boom in recent years. Its music market, led by K-pop groups such as BTS and Blackpink, have been leading the charge.
In 2021, exports of content including music, video games and films reached a record high of $12.4 billion, according to government data, eclipsing the export volume of home appliances and rechargeable batteries.
“We were able to make this decision because we have great confidence that the Korean creative industry will continue to tell great stories,” Sarandos said in a statement, citing the streaming platform’s global hits produced by South Korean creators such as “Squid Game”, “The Glory” and “Physical:100”.
“Squid Game”, a 2021 release, remains Netflix’s most-watched series of all-time, having racked up 1.65 billion hours of streaming in the first 28 days.
Pop culture critic Jung Duk-hyun said South Korean content and Netflix enjoy a mutually beneficial relationship.
“It’s currently a win-win situation. Netflix is maintaining its position in the global market with the help of cost-effective Korean content.
“At the same time, Korean content has enjoyed elevated global status through Netflix’s platform in recent years,” he said.
Netflix offered a lighter-than-expected forecast last week, as it looked to crack down on unsanctioned password sharing into the second quarter to make improvements, delaying some financial benefits.
