After nine years of bringing the best Korean, Chinese, and Japanese dramas to the American viewers, Warner Brothers decided to shut down DramaFever. The closure came hastily and has left 20 percent of the unit's 110 employees out of job.
Last week, users who tuned in to the DramaFever platform were surprised to find a message saying that all new episodes were suspended until further notice.
There had also been no single activity across its social media accounts for the past few days. On Oct 14, its YouTube channel with more than 4 million subscribers was suddenly void of any content.
DramaFever was officially shut down on Oct. 16 based on the message posted on its official website.
The team emotionally bid goodbye to their viewers, explaining that the decision was difficult. It said there were varieties of business reasons that have led to the decision, adding that subscribers will be issued refunds as applicable. The subscribers that would qualify for the refund will receive an email in the coming days, the team assured.
While its parent company Warner Brothers remained mum about the specifics, a source familiar with the decision told Variety that licensing costs for Asian content to be distributed to the United States, particularly K-Drama, have rapidly increased in the recent years. For instance, the licensing for a K-Drama content that used to cost $800,000 now costs about $1 million per season.
The source said one of the triggers for high licensing costs are bids coming from Netflix and Amazon.
K-Drama has become the staple of DramaFever through the nine years.
In a statement given to Forbes, Warner Bros Digital Networks only mentioned "business reasons" behind its decision. The statement added that the rapid change in the marketplace for K-Drama content contributed to the decision. Employees not affected by the issue will continue to work as tech personnel for the Warner Bros. Digital Labs., the statement said.
Interestingly, the seemingly hurried decision to close the DramaFever streaming service coincided with the recent acquisition of Time Warner by AT&T and the establishment of WarnerMedia thereafter.
WarnerMedia CEO John Stankey announced last week that the newly minted company would launch a streaming entertainment service connected with HBO. To realize this launching, the executive said a consolidation from sub-scale units is needed. Variety noted that the shutting down of DramaFever is included in that said consolidation.
DramaFever was founded in 2008 and was acquired by Warner Bros in 2016 from Japan's SoftBank Group.
The streaming service also provided the best of Latin American telenovelas. All shows were translated into English, Spanish, and Portuguese to accommodate viewers.
