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Denmark’s new streaming levy could have “unintended consequences,” claims a European video-on-demand body.
Earlier this month, Denmark’s political parties broadly agreed the basis of the ‘Cultural Contribution Act.’ This confirmed streaming such as Netflix and Viaplay would be subject to a basic levy rate of 2% of their Danish revenues, with a 3% surplus applying to those who do invest less than 5% of the local turnover on content. That replaced an initial plan to charge a flat 6% rate.
The cash raised will go towards financing new Danish films and TV shows through the Danish Film Institute and another public body.
The bill will be presented later this year, but the European VOD Coalition warned that its members are “concerned about the unintended consequences of the Danish government’s revised Cultural Contribution Act.”
The Coalition represents the European interests of Disney, NBCUniversal, Netflix, Sky, Lionsgate, Roku, Warner Bros Discovery and Viaplay among others.
“A levy will make it harder for streaming companies to deliver a compelling and attractive offering to Danish viewers in an already highly competitive media market,” its statement added.
“We need a fair and proportionate regulatory regime that supports investment, rewards the risk for ambitious productions and incentivises partnerships.”
Denmark’s creative community are broadly in agreement the country’s needs a streaming levy to stay competitive and ensure the likes of Netflix, Prime Video and Viaplay continue to invest in local productions. The streamers have been accepting of a tax while not supporting it, but the reality will only become known once the law is in place.
“We believe that a streaming levy will harm Danish content creation, instead of strengthening the sector as intended,” Filippa Wallestam, Viaplay’s Group Chief Commercial Officer for the Nordics told Deadline recently. “It will lead to fewer investments, increased uncertainty and reduced content diversity.”
In a statement issued after the levy plan was announced, Viaplay issued a statement to Deadline saying: “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% levy.
“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.”
Last year, the country experienced a damaging streamer commissioning freeze after the Creative Denmark union, which represents directors, actors and others, demanded a new countrywide framework for digital rights. Producers, who initially supported the union, later admitted “greed” had derailed the negotiations and it took most of the year for the issue to be resolved. Netflix, TV2 and Viaplay, the key streamers involved in the two, have now signed new contracts but commissioning is estimated to be down by as much as 50% overall.
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