Local unit Netflix Services Korea revealed 2020 sales of $356 million (KRW416 billion) and operating profits of $7.54 million (KRW8.82 billion). Both figures are sharply up compared with 2019. Year-on-year revenues grew by 125%, while operating profits increased nearly threefold.
The announcement on Monday was the first time that Netflix has publicly revealed profit and loss statements in Korea, and the move follows a change in the law.
Although part of a larger U.S.-listed public corporation, Netflix Services Korea operates as a private limited company in Korea. The External Audit Act, which became law in November 2019, however, requires limited companies with assets or annual sales of $43 million (KRW50 billion) or greater to make figures public.
The disclosure may also help Netflix push back against misinformation in government circles. Last year the company was criticized in the National Assembly’s National Assembly Audit Committee of Science and Technology Information Broadcasting.
Despite the experience of other U.S. media firms in Korea, Netflix is growing fast and has taken a leading position in the country’s streaming sector. The company has previously disclosed that it ended 2020 with 3.8 million subscribers in Korea.
Monthly active users on Netflix exceeded 10 million in February 2020, compared with 4.7 million in January last year, according to local data tracker IGAWorks, cited by the Yonhap news agency. Industry consultancy Media Partners Asia forecasts that Netflix could end 2021 with 5.3m subscribers in Korea this year and $575m of total revenue.
Given the strong local and international appetite for Korean film and TV shows, Netflix has committed to spending close to $500 million on Korean content this year. It has also leased two studio facilities to allow production at scale.
“In compliance with the External Audit Law, Netflix has filed our financial statements for the year ended 31 December 2020. We continue to be deeply committed to the Korean creative community and plan to spend nearly KRW 550 billion in 2021,” said a company spokesman.