Danish Media Agreement, including min. 2% streamers levy gets overall industry favour

Wednesday June 14, the much-awaited Danish Media Agreement covering 2023-26 was announced by the Danish Culture Minister Jakob Engel-Schmidt.

The most eye-catching measure is a new streaming levy or cultural contribution of a minimum 2% and maximum 5% that all streamers will be obliged to dish out from their revenues on local commissions.

On-demand platforms that already invest 5% or more in Danish content won’t have to pay an additional contribution, while those investing less than 5% will be asked to contribute 3% on top of the fixed 2% minimum rate..

The bulk of the net proceeds from the streaming levy - ie 80% - will be earmarked towards Danish fiction and non-fiction films, with the remaining 20% going towards TV series and TV documentaries via the Public Service Fund, also administered by the Danish Film Institute.

Before implementing the bill into law, the government said it will check if the proposed streaming levy abides by EU legislation - including the Audiovisual Media Services (AVMS) Directive, state aid rules and the OECD rules on taxation of the digital economy.

In his official statement, Engel-Schmidt said that the new broad media agreement, will both “oblige streaming services to contribute to Danish production and cater to the services that actually invest in Danish content.”

Other new measures to be introduced include a modernisation of the Public Service Fund (which will cover as well Danish content on radio and podcast), obligations for public service broadcasters DR an TV2 to up their investment in Danish content and for DR to maintain its output of kids animation production.

Overall reactions from institutions, film producers and major film groups were positive.

“We are happy that we finally have a broad political agreement securing the framework for investments in Denmark,” Jørgen Ramskov, Director of the Danish Producers Association told us. “We find the agreement balanced since it includes a small obligation for the streaming services to contribute to the financing of Danish films, and at the same time, an incentive to keep investing in Danish content.”

Claus Ladegaard, CEO of the Danish Film Institute (DFI) said he welcomed the new Media Agreement, in particular the 80% proceeds from the streaming levy which “will go to films. This will be a very important contribution, when it comes to addressing the financial challenge for Danish films,” he said.

The head of the DFI however underlined that the maximum 5% cultural contribution is lower than the 6% rate proposed by the last coalition government in 2022, which received strong industry criticism for possibly deterring streamers from investing in local content.

Reactions however from streamers were either nuanced or negative.

In a statement sent by email, Jenny Stjernströmer Björk, Vice President, Content, Nordics said: “Netflix is currently investing in Danish productions, and we are committed to continuing this. For us, it’s crucial to have a fair and proportionate legal framework in place, in order to do so. We will follow the implementation process to understand the impact of the media agreement and look forward to contributing to further discussions.”

Filippa Wallestam, Viaplay Group Chief Commercial Officer was much more critical.
“We are still analysing the political agreement and its potential consequences in full, but we can already say that we are disappointed with the proposed 2 percent levy,” she told us.

“Viaplay Group is one of the largest investors in Danish content, and we have made significant contributions to the local creative industry over the past 30 years. Every krona paid on a levy will mean a krona less invested in diverse, high-quality content that Danish audiences love, and it will significantly increase the costs of our planned projects.

"This comes at a time when the Danish production sector is already under pressure and many talented people in all parts of the industry are facing financial challenges. It should also be noted that Denmark continues to lack any production incentive schemes,” she noted, before adding:

“We hope that during formulation of the legislation, there will be opportunities for constructive dialogue between politicians and market stakeholders, to ensure the proposal does not weaken the Danish production environment further, and result in Viaplay producing less Danish content than we would like, which we currently see as a high-risk and is of course the opposite of what the legislation wants to achieve.”

The Danish levy on streamers to boost the production of local content is the first of its kind in the Nordic countries.
To read the full Media Agreement (in Danish), CLICK HERE.