Sony Pictures is currently in discussions with Netflix regarding the creation of an animated sequel to the successful film KPop Demon Hunters, according to sources familiar with the situation. This fantasy musical has emerged as a remarkable cultural phenomenon, something studios and streaming services typically invest significant resources to replicate but seldom achieve.
Recent developments have reignited conversations about the strategic decision made by Sony in 2021 when it transferred distribution rights of the film to Netflix. During the weekend of August 22-24, Netflix released a surprise sing-along version of KPop Demon Hunters in theaters, which contributed to the film becoming the most-watched English-language title on the streaming platform, amassing 236 million views overall.
Industry insiders are divided over whether Sony erred in handing over the film to Netflix rather than risking a major theatrical release, especially given the challenges original animated films have faced in box office performance post-pandemic. While some feel that the decision was cautious, others argue it was a missed opportunity. “It was certainly a mistake for Sony to give it up,” stated a source from the exhibition side of the industry. They noted that this new intellectual property may have been underestimated, calling it “bad luck” for Sony.
On a positive note, KPop Demon Hunters is projected to yield impressive profit margins for Sony, potentially between 20 percent to 30 percent, surpassing the typical studio expectation of 10 percent to 12 percent. The initial deal signed in the pandemic’s depths had Netflix cover the film’s full $100 million budget, in addition to a $25 million fee, which amounted to 25 percent of the budget and associated costs. Sony also benefits from soundtrack sales and music publishing royalties.
Netflix’s recent announcement highlighted KPop Demon Hunters’ ranking as the top English-language film, overtaking Red Notice, which featured prominent stars like Dwayne Johnson and Ryan Reynolds. This feat is particularly significant given KPop’s family-oriented and female-focused target audience. Furthermore, the film’s soundtrack achieved a milestone by producing four simultaneous Top 10 hits on the Billboard Hot 100, led by Huntrix’s single “Golden.”
Sony is also set to receive a share of the revenue from Netflix’s compensation to its animation company, Imageworks, which worked on the visually acclaimed Oscar-winning Spider-Verse films. The success of KPop Demon Hunters is crucial for the streaming giant, as it underscores the importance of attracting and retaining family audiences — a core aspect of Netflix’s strategy to maintain subscriber satisfaction. Reports suggest that children are watching the film repeatedly, with averages ranging from six to eight viewings.
Both Sony and Netflix describe their collaboration as smooth. This relationship is fortified by Hannah Minghella, Netflix’s head of animation, who has an extensive background at Sony, and Kristine Belson, the studio’s current animation head. In a recent statement, Netflix’s film chief, Dan Lin, expressed appreciation for Sony and their partnership, emphasizing support for directors Maggie Kang and Chris Appelhans. Lin also noted that Netflix’s model allows films to grow organically over time, thereby contributing to KPop Demon Hunters’ cultural impact.
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While Kang and Appelhans have hinted at the potential for a sequel, the more immediate concern is finalizing an agreement between Sony and Netflix. The industry remains watchful for updates on this development.
