On the one hand, Sony Pictures should be happy because they have arguably the biggest hit movie of the summer on their hands. No, we’re not talking about “Lilo & Stitch” or even “Superman.” We’re talking about “KPop Demon Hunters,” which has been tearing it up on Netflix’s streaming charts for weeks now. On the other hand, as mentioned, all of this success is falling on Netflix’s shoulders, with Sony getting a surprisingly small fee — relatively speaking — for generating such a massive hit.
According to Puck News, even though director Maggie Kang and Chris Appelhans’ “KPop Demon Hunters” originated at Sony Pictures as an original idea from the studio, they are getting just $20 million with Netflix under no obligation to pay additional royalties. Thanks to a deal between the studio and the streamer, Netflix shoulders the lion’s share of the $100 million production budget. Sony got cold feet and feared the big bet might not pay off if they were to release it in theaters.
On Netflix, however, the film has exploded. It has amassed an astounding 184.6 million viewers, becoming the company’s second-most-watched movie ever behind “Red Notice.” It is expected to take over the top spot sometime in the coming weeks. That is an astounding achievement, to put it mildly. Somewhat ironically, “KPop Demon Hunters” is getting a limited sing-along release in theaters thanks to its success on Netflix.
The film centers on K-pop superstars Rumi, Mira, and Zoey, who use their secret identities as demon hunters to protect their fans from supernatural threats. Together, they must face their biggest enemy yet, a rival boy band made up of demons in disguise.
Sony seemingly lost out on a fortune with KPop Demon Hunters
Now, $20 million is nothing to sneeze at, but as Puck points out, Sony is the only major studio to not release a movie this summer that cleared $500 million at the box office. Its biggest hit was “28 Years Later,” which topped out at $150 million. While it’s impossible to say what would have happened had Sony rolled the dice on this one without going to Netflix as a financial partner, it’s safe to say there was major upside potential in a full-blown theatrical release. $20 million is nothing compared to what his movie is going to generate in the long run.
The soundtrack alone has seven songs in the top 20 on Spotify’s global Top 50, with “Golden” reaching #1 on the Billboard Hot 100 chart. Between the inevitable sequels, spin-offs, merchandise, and music rights, it’s not crazy to think this will become a $1 billion franchise at some point. That’s why that $20 million seems so small in retrospect. Those two “Red Notice” sequels we were promised never happened. Rest assured, “KPop Demon Hunters” will get a sequel.
To that end, Sony has the right to produce any sequels or spinoffs, with negotiations currently underway for a follow-up. Unfortunately, the studio will make no additional money from the success of the first. They do have the chance to release it in China, but the Chinese box office isn’t what it once was for Hollywood productions. Netflix also has no obligation to renegotiate its deal with Sony on any future films. The deal is what it is.
In an age when the box office is on uncertain ground, particularly as it relates to original movies, it’s not hard to see why Sony blinked here. At the same time, family-friendly movies have been making the most consistent bank. This could have spawned a new franchise for Sony that could thrive for years to come. Instead, Netflix will get the lion’s share of the credit, and Sony will collect its fee and nothing more. Perhaps this can serve as a cautionary tale for Hollywood’s future. Mitigating risk can be smart, but bet small and you’ll win small.
“KPop Demon Hunters” is streaming now on Netflix.
