Sony sold Netflix the rights to “Kpop Demon Hunters” in a Pandemic Age Safety Game – and now it’s the biggest Netflix film of all time

Kpop demon hunters Do not just beat films broadcasting discs: four songs from his soundtrack are currently sitting in the Display panel HOT 100 TOP 10 at the same time, something that has never happened in the 67 years of history of the graphic. (“Golden” holds room n ° 1, “Your Idol” is at n ° 4, “Soda Pop” is at n ° 5, and “How It’s is” landed at No. 10, since you asked.) And when Netflix has decided to test the waters with a theatrical version to sing last weekend, the film won about 18 million dollars at the house Boxing about 1,700 thathers, despite the fact that the box at the box-au boxes through 1,700 Theares, is available for being available at home at the box through 1,700 thathers, despite the fact that Le Foyer au box-au boxes through 1,700 thathers, is available.

The success was so overwhelming Netflix and Sony are already in first talks for a suite. For Netflix, this represents the type of franchise animated in small groups that the company has been pursuing for years. But for Sony Pictures Animation, which created the film, the story is more complicated – and potentially represents one of the greatest missed opportunities in the recent Hollywood history.

The manufacture of Kpop demon hunters phenomenon

Sony Pictures animation has developed Kpop demon hunters With a production budget reported about $ 100 million, positioning it as a major bet on the global attraction of K-Pop culture and supernatural adventure. Directed by Maggie Kang and Chris Appehans, the film follows the group of fictitious girls Huntr / X while they fight demons while retaining their pop-star career. There is a group of boys Rival called Saja Boys … You can imagine where it is going.

The creative game, so far, has paid off in a surprising way. The soundtrack of the film has not only completed the story-it has become a real musical phenomenon, with “Golden” becoming the eighth song of K-Pop to strike the n ° 1 on the hot 100, the first time that a song of an animated film has reached this place since “We Don’t Talk About Bruno” Disney’s from Disney’s Charm, And the first to present female artists.

So far, the film has supported its momentum. Kpop demon hunters Now spent 10 consecutive weeks in n ° 1 in the prize list of films in Netflix, adding 25.4 million views during the most recent week. This kind of stay is rare for any original Netflix, not to mention an obscure animated film which is not an established IP.

Sony’s agreement – and with what he left

Obviously, Kpop demon hunters is massive for Netflix. And Sony made the film, so it should be just as massive for them too, right? Well, not so much. Despite its expenses of around $ 100 million to create what has become a global phenomenon, Sony Pictures should only bring about $ 20 million in profits from what is potentially a billion dollars franchise Kpop demon hunters; Basically, a fraction of the increase. The reason lies in a distribution agreement in 2021 that Sony concluded with Netflix, designed to guarantee yields during the uncertain pandemic era.

According to Matthew Belloni of Puck, Sony accepted a “direct to the platform” arrangement where Netflix would reimburse the production budget for the film plus additional costs capped at $ 20 million per project. In exchange, Netflix has kept all property rights and has no participation in additional profit, even if the film becomes a massive success. It was not Sony who was shopping around a finished film; Netflix has mainly financed production while Sony managed creative work.

At the time, the agreement made sense. Theaters were still recovering from pandemic closures, animated films struggled at the box office and Sony did not have its own major streaming platform. The arrangement guaranteed that Sony would make a profit without risking a theatrical flop. But no one – not even the managers of Netflix – said Kpop demon hunters would become as great as it was.

To understand the magnitude of what Netflix has acquired, think about this Red opinion represented for the platform. This action film in 2021 featuring Dwayne “The Rock” Johnson, Ryan Reynolds and Gal Gadot held the first place of Netflix for almost four years, its 230.9 million views becoming the reference of Netflix’s success.

Kpop demon hunters blowed this number, but it has also demonstrated something Red opinion Impossible to realize: franchise potential. The success of the film’s soundtrack alone opens up the sources of income that most Netflix originals cannot touch. A reminder: four simultaneous Display panel Top 10 strokes. And the success of the singer theatrical experience provides another data point for Netflix (and Netflix likes its data points). The report of 18 to 20 million dollars in a single weekend in 1,700 theaters – about half of the number of theaters that a blockbuster version would obtain – arouses a real audience demand for community experiences around the franchise, which is promising if Netflix plans to develop in more physical space.

The missed opportunity for Sony

Sony had he kept the rights to Kpop Demon Hunters, The company would be seated on something that is potentially worth billions. But what acts really like salt in the injury, and perhaps a form of cruel irony, is that last September, the own financial director of Sony, Hiroki Totoki, said that in an interview with the Financial time::

“Whether for games, films or anime, we don’t have much IP that we encouraged from the start. We lack early phase [of IP]And that’s a problem for us. “”

Sony was frank on its difficulties in developing sustainable entertainment franchises beyond Spider-man. The managers of the company recognized that the studio needs a more original intellectual property favored from the start – Kpop demon hunters represents. Instead, Sony is now looking at Netflix Lever on the property for the suites, the goods and much more. (Sony, for what it’s worth, says Fortune He will share some of the profits, including album sales. Netflix made no other comment.)

The figures make the opportunity to be missed even more starker. For the context, Netflix would have paid $ 465 million to acquire the rights to Seinfeld reruns. Kpop demon hunters is an original property that has already proven its global appeal, has demonstrated theatrical viability and has created real musical successes. The $ 20 million that Sony will win seems to be modest in this backdrop.

The first talks in a row and what is the next step

The speed at which Netflix and Sony entered discussions on follows tell his own story. When a property beats the platform recordings, generates music at the top of the graphics and proves theatrical demand within two months, the economy becomes clear quickly. Netflix wants to strike while the iron is hot, and there is a lot of potential for a Kpop demon hunters universe.

For Sony, the sequel represents both justification and frustration. The studio has proven that it could create worldwide success, but the upward financier is mainly flowing for Netflix. While Sony retains the right to produce future payments, the terms of any new transaction remain to be negotiated – and Netflix now holds most of the lever effect.

The wider lesson extends beyond this single film. In an industry where intellectual property is increasingly leading to long -term value, the difference between possession of success and the creation of one for someone else can be measured in billions. Kpop demon hunters Probably generates income for Netflix on several films, series, consumer products and live experiences for years to come. Sony, on the other hand, will go to the next project, hoping that Lightning strikes twice.

For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.