Denmark leads the way in the Nordics with 6% tax on streaming services

In a ground-breaking move, the Danish government has agreed with other political parties on a 6% levy that streamers must pay from their revenues in Denmark to support the local audiovisual sector.

The measure announced May 21, is part of the new Danish Media Agreement 2022-2025 and Denmark’s contribution to the implementation of the EU’s Audiovisual Media Services Directive (AVMSD).

The new cash injection derived from the streaming tax, will be administered by the Danish Film Institute and split equally between film subsidies and the DFI's Public Service Fund, supporting mainly series and documentaries. According to media analysts, the Danish audiovisual sector will benefit from a massive injection estimated at around DKK 150 to 200 million (€20-27 million) extra per year.

“Media consumption in Denmark has changed,” said Denmark’s Minister of Culture Ane Halsboe-Jørgensen in a statement. “International streaming services are taking up more and more space, and therefore it is absolutely necessary that they contribute to our cultural community. With a cultural contribution of 6%, we ensure that we also in the future have Danish-language films, series and documentaries of high quality, which can bring us together and challenge us,’ she observed.

The move received different responses by the different parties concerned.

Positive reactions were voiced by public funding bodies such as the Danish Film Institute’s CEO Claus Ladegaard (see here) as well as DR’s CEO Maria Rørbye Rønn who welcomed the government’s efforts to “strengthened democratic control of tech giants”.

Jørgen Ramskov, Head of the Danish Producers Association also reacted positively, underscoring that through the 6% streaming tax, VOD services ”will in the future, contribute even more to talent development and content production based on Danish culture”.

Asked to comment on the streaming tax, Netflix’s Director of Original Series in the Nordics Jenny Stjernstromer Björk said cautiously: “We need a fair and predictable legal framework to continue innovating and investing in Danish storytelling. We will now review the media agreement thoroughly to understand its impact.”

However Anders Jensen, President and CEO of the fast-expanding Nordic streamer Viaplay which has made Nordic original content a cornerstone of its yearly output of 70+ Originals, issued a highly-negative response on LinkedIn.

“At Viaplay Group, we love to produce content in Denmark. A fantastic, creative market with some of the best talent to be found. It is therefore very sad to see how Danish government intervention may change this, for the worse, with the implementation of the so-called cultural contribution, commonly known as the ’streaming tax.”

Expanding on his criticism, Jensen said: “This tax is ill-considered and an unnecessary and misguided government intervention to tax the future in an attempt to preserve the past. It will ultimately lead to less investment in Danish TV content and to higher consumer prices. This is the exact opposite of what the government should be aiming for at a time when the demand for Danish content is higher than ever before.”

“Viaplay Group already invest hundreds of millions of kroner in local Danish productions each year, and we have a substantial slate of upcoming productions”, he said, before warning of his group’s possible U-turn.

“Now we must revise our plans because of this unnecessary tax, and the same is likely true for the other streaming service providers. A consequence of this new tax could be that streamers immediately redirect investments to financially more attractive markets, where investment is encouraged rather than taxed”….”We will now immediately implement further measures to control the costs of any Danish production we do, which will put pressure on the negotiations with producers and their associations,” he said before urging the Danish government to “seriously listen to the criticism and to possibly reconsider its decision.”

Negotiations with streamers are likely to be heated in the coming months.

At press time, the new EU VOD Coalition set up last month to give a voice to the global streamers in Europe (including NBCUniversal, Netflix, Viaplay, StarzPlay, and Warner Bros.Discovery) and to engage with EU policy makers, was still to make a statement. “The EU VOD Coalition is extremely interested in all levies/investment obligation developments, but we do not have a statement ready yet on Denmark, although we are discussing it,” said Julia Maxwell Vice-President of Regulatory and Public Affairs at Viaplay, on behalf of the VOD Coalition.

Several other EU countries have implemented streaming taxes or investment obligations starting with France, which has led the way and most recently Switzerland with its 4% streaming levy approved by Swiss voters.

In the rest of the Nordics, Finland is currently investigating how to implement the AVMSD. According to Lasse Saarinen, Head of the Finnish Film Foundation, conclusions from a working group involving the Ministry of Communications and Ministry of Culture will be announced in the fall, but “nothing will happen before we have a new government in Spring 2023, after Parliament elections,” he said.
No decision is expected either before later this year in Sweden, Norway or Iceland.

In addition to the 6% streaming levy, the Danish Media Agreement specified that the public broadcasters DR and TV2 must increase their commitment to the production of Danish feature and documentary films, with obligations to be detailed in the next Film Agreement, starting in 2024.