Sony CEO regrets selling Netflix’s biggest hit ever

Sony Pictures CEO Ravi Ahuja expressed regret about selling animated film “KPop Demon Hunters” to Netflix in 2021, after the movie became the streaming platform’s most-watched title ever with 266 million views.
The K-pop themed animated musical surpassed the previous record holder “Squid Game” and generated unprecedented success with its soundtrack placing four songs simultaneously in Billboard’s Hot 100 top 10.
Under the 2021 pandemic-era deal, Netflix paid Sony’s entire $100 million production budget plus a $25 million profit premium, while retaining all franchise rights including sequels and merchandise.
Despite being freely available for streaming, Netflix’s limited theatrical release of a sing-along version topped the North American box office with $19.2 million over a weekend.
Ahuja acknowledged that while the deal “made sense” at the time, the film’s massive success suggests it “could have been theatrical,” representing a potential billion-dollar franchise Sony handed to Netflix.

Sony Pictures Entertainment CEO Ravi Ahuja expressed cautious reflections on the studio’s decision to sell “KPop Demon Hunters” to Netflix, even as the animated musical shattered viewing records to become the streaming platform’s most-watched title of all time. The admission came as the film reached 266 million views, surpassing the previous record holder “Squid Game” by just 800,000 views.joins

Speaking at the Bank of America conference on Thursday, Ahuja acknowledged the unexpected magnitude of the film’s success. “Obviously, in hindsight, it’s such a big hit,” he said, referring to the 2021 deal where Netflix paid Sony’s $100 million production budget plus a $20 million profit premium. “Netflix paid the whole cost, plus a profit premium. At the time, it made sense. But now you look at the success and think maybe it could have been theatrical”.yahoo

Record-Breaking Success Creates Industry Buzz

“KPop Demon Hunters” has defied typical streaming patterns since its June 20 release, maintaining consistent growth rather than the usual initial spike followed by decline. The film accumulated 30.1 million views during the week of August 25-31, demonstrating remarkable staying power 10 weeks after its premiere.bbc

The soundtrack has achieved unprecedented success, with four songs simultaneously occupying the Billboard Hot 100’s top 10 positions for the first time in the chart’s 67-year history. “Golden” has held the number one spot for three consecutive weeks, marking the first time a fictional K-pop girl group has topped the chart.forbes

Netflix capitalized on the film’s popularity by releasing a sing-along version in theaters across the United States, United Kingdom, Ireland, and New Zealand, which earned an estimated $18-20 million during its limited weekend run. This theatrical success occurred despite the film being freely available for streaming at home.fortune

The Pandemic-Era Deal’s Consequences

The financial arrangement between Sony and Netflix stems from a 2021 “direct-to-platform” deal designed to provide guaranteed returns during the uncertainty of the pandemic era. Under the agreement, Netflix covered the entire production budget and paid Sony a maximum fee of $20 million per project, while retaining all rights to the property.fortune

According to industry reports, Sony will earn approximately $20 million from what analysts now consider a potential billion-dollar franchise. This modest return contrasts sharply with Netflix’s acquisition, which reportedly paid $465 million for “Seinfeld” reruns, while “KPop Demon Hunters” represents original intellectual property with proven global appeal.primetimer

The irony is particularly sharp given Sony CFO Hiroki Totoki’s September 2024 statement to the Financial Times that the company lacked original IP fostered from the beginning, exactly what “KPop Demon Hunters” represents.fortune

Looking Forward Despite Regrets

Despite acknowledging the missed opportunity, Ahuja maintained that Netflix provided the appropriate platform for the film. “I think it was in the right home,” he said during the conference. “Our mission is to make great content and find the right home. And I think ‘KPop Demon Hunters’ right home was Netflix”.fortressofsolitude

Sony and Netflix have reportedly entered early sequel discussions, with original directors Maggie Kang and Chris Appelhans expected to return. However, under the existing agreement terms, Netflix retains all franchise rights, including merchandise and future installments, while Sony maintains production capabilities.bbc

The success of “KPop Demon Hunters” highlights the evolving landscape of entertainment distribution, where pandemic-era safety deals can transform into missed billion-dollar opportunities, leaving studios to balance immediate financial security against long-term franchise potential.