Securing a deal isn’t always simple — but this time, it was.
For the sequel to the cultural hit KPop Demon Hunters, Netflix chose the smoother path and granted Sony — the studio behind the acclaimed animated film — a $15 million bonus in recognition of the movie’s extraordinary performance, according to a source familiar with the streamer’s negotiations.
Produced by Sony Pictures Animation, KPop Demon Hunters rapidly became the most-watched film in Netflix history this summer.
The cash bonus served as a mutually agreed concession designed to help Netflix’s film executives reach a sequel agreement more quickly with Sony Pictures chair Tom Rothman and his team.
With the bonus added, Sony’s earnings from the first film now total $40 million, up from the original $25 million package. That initial amount consisted of a $20 million fee plus $5 million for Netflix’s first-option rights to keep the movie on the service. Netflix also fully financed the film’s $100 million production budget.
And Sony’s revenue doesn’t stop there. The studio also receives a margin from the production budget because Netflix is paying Sony-owned Imageworks — the same animation house behind the Spider-Verse franchise — for its work on the project. Sony additionally earns from soundtrack sales and music publishing on selected tracks. Merchandising rights, however, rest entirely with Netflix.
Financial specifics for the KPop Demon Hunters sequel remain under wraps, but sources say nearly every category includes increases, along with performance-based bonuses tied to success metrics.
Still, the arrangement is a win for Netflix, which can leverage a sequel to keep the KPop-driven franchise active and high-profile.
Both Sony and Netflix declined to comment, consistent with their long-standing preference not to discuss deal numbers publicly.
The original Demon Hunters agreement — part of a larger multi-title deal — was completed in 2021 during the height of the pandemic.
Following the film’s breakout earlier this year, some industry observers argued Sony might have benefited more from a traditional theatrical release despite the risks. Others disagreed, noting the film flourished because Netflix gave it the time and space to find its audience.Regardless, Sony couldn’t reclaim the film even if it wanted to; Netflix holds the distribution rights outright.
And in theaters, earning $40 million in profit from a $100 million production — before adding another substantial global marketing spend — would have been challenging. Typical studio profit expectations hover around 10 to 12 percent, making Netflix’s deal an attractive path.