The European VOD Coalition has expressed concern about a levy set to be imposed on streaming services in Denmark.
In a statement issued today, the Coalition – whose members include Netflix, Disney, Warner Bros Discovery and Viaplay – said it is “concerned about the unintended consequences” of the Danish government’s revised Cultural Contribution Act.
On June 14, the government announced that political agreement had been reached on a cultural levy on streaming service providers’ revenues generated in Denmark.
A basic rate of 2% of the Danish revenues will apply to all on-demand streaming companies, while a 3% surcharge will also apply to companies that invest less than 5% of their Danish revenues in Danish content. For many streamers, this means the total levy rate will be 5%. Conservative estimates suggest the levy will raise around €8.5m (DKK 100m).
A bill is expected to be presented later in 2023 that will implement the new levy. The new levy will replace a previous proposal for a 6% cultural levy.
The proceeds from the levy are expected to be administered by the Danish Film Institute, with 80% going to fiction and documentary films and the remaining 20% being spent on public service programming including TV dramas and documentaries and also podcasts.
The proposed levy has been broadly welcomed by Danish filmmakers and institutions.
However, the European VOD Coalition said in its statement: “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.
“We need a fair and proportionate regulatory regime that supports investment, rewards the risk for ambitious productions and incentivises partnerships.”
The levy is Denmark’s implementation of the EU’s Audiovisual Media Services Directive (AVMSD), which allows for each EU member state to impose financial obligations on providers who target audiences in their jurisdiction.
A number of countries have opted for levies, which are usually administered official funding organisations. In Germany, the levy amount is 1.8-2.5% and is administered by the German Federal Film Board (FFA). In Poland the figure is 1.5%, while it is 4% in Romania.
Other countries have instead imposed investment obligations on streamers, mandating that they spend a proportion on their turnover directly on local content. In Spain, the figure is 5% while in Italy it is 20%. Earlier this month, the Dutch Parliament approved a bill that requires streamers which generate more than €10m to invest at least 5% of revenues directly in Dutch films, series and documentaries. The Dutch government estimates that the law will generate at least €40m in funding.
France demands the highest rate of contributions from streamers for local and European productions. It mandates both investment obligations – ranging from 15-25% of turnover – and a levy of 5.15%.
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