Why Netflix is closing in Denmark
Copenhagen backdrop: hit series “Borgen”
Source: Mike Kolloffel/Netflix
Netflix has just produced the fourth season of the legendary political series “Borgen” in Denmark. But now an example is being made: the Danish Netflix branch is closing. Because Denmark has plans that streaming services do not like.
ZQuite a lot is flying around Netflix’s ears right now. The declining number of subscribers, the declining stock prices, the growing dissatisfaction with the range of films. And now the Danes. There seemed so much harmony between the Danes and Netflix. The streamer bought the rights to the Borgen series from public television and produced a fourth season. Everyone was excited.
But now, from one day to the next, Netflix Denmark has closed, interrupted all ongoing productions and mothballed all preparations for new films. It is a concerted effort by all streamers operating in Denmark, including Viaplay and TV2 play.
The reason is an agreement between the umbrella organization of Danish film authors and actors and the Danish Producers’ Association on appropriate remuneration for streaming. This contract provides that not only – as is usual with streamers – a flat rate is paid as a fee (plus, perhaps, a small profit share), but a fee depending on the territory and number of subscribers.
This Agreement is based on applicable EU law. However, according to the streamers, it makes production in Denmark too expensive, not to mention the new streaming tax there. That could – who knows – even be true. But that’s the point: we don’t know. Everything is a state secret for the streamers: production costs, viewership, revenue. There is no basis for negotiation.
A scenario that some saw coming
That’s why the Danes are demanding disclosure of the numbers, they no longer want to be made do with a lump sum for which they give up all rights to their films forever. A lump sum that was once quite generous but is shrinking.
Europe’s producers were warned early on about a scenario like the one now unfolding in Denmark, and yet no one wanted to imagine such a brutal use of market power. Everyone followed the streamer calls like lemmings. Netflix sees the example it is setting in Denmark as a red flag. We should take it more as a wake-up call.