Nordic Film and Egmont Praise New Media Agreement

The government (Social Democrats, Liberal Party, and Moderates) has just announced a broad media agreement with the Danish People's Party, the Social Liberal Party, Socialist People's Party, and the Red-Green Alliance, which is good news for both Danish cinema and media. 

The agreement includes, among other things, a cultural contribution of two percent for everyone. Companies investing more than five percent of their turnover in Danish content do not have additional obligations, while streaming services investing less in Danish content will continue to pay a total cultural contribution of five percent. Eighty percent of the revenue will go to Danish cinema, and twenty percent to the Public Service Fund. 

Nordisk Film, owned by Egmont, is pleased, noting that this is very close to the model Nordisk Film itself proposed (see appendix), and that there has been consideration for a modernization of the Public Service Fund and increasing TV stations' engagement. The media agreement thus balances the attention to especially create Danish films while making it attractive for streaming services to continue investing in Danish content. 

"Thanks to Culture Minister Jakob Engel-Schmidt and the Moderates, Social Democrats, Liberal Party, Danish People's Party, Social Liberal Party, Socialist People's Party, and Red-Green Alliance for being receptive, constructive, and responsible. We are very happy with the broad media agreement that can create stability for the conditions in the Danish film industry. The agreement contains a good and realistic compromise that balances the global media market with the development of Danish culture. The agreement means that 80 percent goes to Danish film production. Now it's important to make sure that the extra support funds will benefit Danish producers. The crisis in Danish cinema is deeply serious and prolonged," says Nordisk Film's CEO, Allan Mathson Hansen. 

He points out that the media agreement means that the support amount from the Danish Film Institute for the first time since 2011 is being adjusted for cost development, thereby addressing 12 years of backlog for the film industry. It is still uncertain how much the deal will yield, and it is crucial that Danish cinema is boosted by at least 100 million kroner in order to produce 20-25 films that can unite Danes. 

"This media agreement provides a solid foundation for also landing a good and broad film agreement in the fall. We and the rest of the film industry will know how to put the extra support funds on the screen to the benefit of all Danes," says Allan Mathson Hansen. 
 

The Fund Meets the Magazines  

The media agreement also recognizes that "magazines with editorial content contribute to public debate and democratic conversation" and proposes establishing a fund for magazines with editorial content of societal relevance that currently do not receive media support or are covered by zero VAT. It also aims to address entrenched subsidy structures in Danish media support and historically conditioned distribution mechanisms. 

Parties have set aside a fund of 30 million kroner for this purpose, thus meeting several media houses, including Egmont's division, Story House Egmont. 

"We are very pleased that the Liberal Party, Social Democrats, and Moderates, along with the Social Liberal Party, Socialist People's Party, Red-Green Alliance, and Danish People's Party, have listened to us in the magazine industry and are now opening up to equalize journalistic media and recognize their importance. I am also glad they are set to tackle entrenched subsidy structures. Now it's crucial that the fund strengthens releases from magazine houses that today do not receive media support or are covered by zero VAT, to ensure real equality in the industry. I look forward to further dialogue on the implementation of the fund," says Frank Vilstrup, director of Consumer Magazines at Story House Egmont. 

 
He is also very pleased that they are set to establish a new, private audio universe for children, something Story House Egmont has strong experience with, but which has proven difficult to finance under market conditions. 

"We specialize in producing good content for children in books, magazines, and audio. However, it is extremely difficult to produce, for example, podcasts for children on purely commercial sustainable terms, so we will look closely at the conditions for the upcoming private audio universe for children," says Frank Vilstrup. 

Egmont is Denmark's largest media group and is behind Nordisk Film, Story House Egmont, and Lindhardt og Ringhof as well as Cappelen Damm and TV 2 in Norway. 
 

Appendix: Nordic Film's Proposal for Adjusting the Cultural Contribution 

The cultural contribution was a crucial subsidy from streaming services to support Danish film, but an unfortunate combination of the Create-conflict, the economic crisis with inflation and higher prices, as well as the introduction of the highest cultural contribution in Europe – at the same time as Denmark does not have tax incentives like the rest of Europe – has made it unattractive to invest in Denmark and has had significant, damaging consequences for the industry. 

Nordic Film thus believes that it is necessary to adjust the cultural contribution with a discount for investments and create a model more in line with that introduced by 12 other European countries - and several more on the way in Ireland, Norway, and Finland – to create balanced production conditions at the Nordic and global level and to maintain Denmark as an attractive place to produce. 

The cultural contribution is absolutely crucial for especially films, content for children and youth, and documentaries, while series to a greater extent can be financed without support except for the large, particularly Danish series such as "Lykke Per", which does not have an international market but is an important national story. 

Therefore, Nordic Film proposes that a reduced cultural contribution should primarily go to the DFI's support funds for film, documentary, and children and youth, and a smaller portion to the Public Service Fund. 

On this basis, Nordic Film proposes a contribution of 2 percent for everyone, after which deductions for investments up to 5 percent can be made. Services that do not invest should pay the full contribution of 5 percent. 

With an estimated turnover of 4 billion DKK from the streaming services (Source: Wilke and the Producers' Association), this would yield revenue of just over 109 million DKK. It is proposed that films, children and youth, and documentaries be favored with 85-100 million DKK through DFI’s support schemes, while the remaining funds are allocated to the PS Fund targeted at special national TV series. 

To obtain a deduction for investments, the investment must be multiplied by a factor of 3. For example, if a contribution amounts to 20 million DKK, an investment of 60 million DKK must be made to obtain a full deduction. 

• Nordic Film proposes a 2 percent cultural contribution for everyone, a discount for investment with a factor of 3 – that is, you must invest three times the amount of the contribution. 

• Streaming services that do not wish to produce in Denmark should still pay a cultural contribution of 5 percent. 

• The combination is estimated to potentially add up to 100 million DKK to film support schemes. At the same time, a significant incentive is created to invest in Danish content and an additional turnover of 600-700 million DKK. 

• The turnover of the streaming services is highly uncertain. Services might close in Denmark, and citizens may continuously subscribe and unsubscribe to save money. It is also reasonable that only content production is covered, not sports and entertainment and not transactional platforms which do not produce themselves, for example, Blockbuster.