An estimated one billion people around the world witnessed the universally acclaimed Opening Ceremony of the London 2012 Olympics on July 27.

But if you were in Denmark and only relied on its public service broadcaster, DR, you were deprived of this much-praised spectacle, as it was exclusively screened on pay-TV channel TV2.

Among Danish viewers, only those in households that pay a special subscription fee for TV2 were able to witness the event masterminded by Slumdog Millionaire director Danny Boyle. It was watched by a total audience of 990,000 on a channel that has been encoded since the start of 2012. DR went on to broadcast the Closing Ceremony however, drawing a smaller audience of 740,000.

According to DR’s Anne Stig Christensen, this was due to the agreement passed between the two channels over their shared ownership of the broadcasting rights for the Olympics. “TV2 had first choice on the Opening Ceremony, so we had the Closing Ceremony.”

DR and TV2 shared the rights because they are Denmark’s only two members of the European Broadcasters Union (EBU), a Geneva-based TV rights holder whose active members consist of 85 European broadcasting corporations, television channels and radio stations.

In the past, the EBU has enabled its members to acquire the rights for the world’s most popular sporting events for uncompetitive prices – at best, pay-TV channels can only bid for the crumbs off the table. And while the price of the rights for broadcasting events like football’s World Cup or the European Championship has increased since the late 1990s – particularly for the big European nations – they are still acquired at a significant discount.

The exact price paid is unknown and tends to reflect the size of the potential audience. The price also includes other services (logistical assistance such as locations for interviews or live studio transmissions, facilities to broadcast live etc), and it was, along with the exact role of the EBU in these transactions, deemed “confidential” by the EBU’s press office.

TV2 is one of just two pay-TV members in the EBU – the other is French channel Canal +, which did not broadcast the Olympics this year. This low number would appear to suggest that TV2’s move to become a pay-only station might have put it at odds with the EBU statutes.

However, the statutes do not directly prohibit pay-TV broadcasters from being a member. The closest they come to addressing the matter is the stipulation that “virtually all of the national radio and/or television households are in a position and technically equipped to receive the entirety of their major radio and/or television programme service with satisfactory technical quality”.

Experts agree that as long as TV2 continues to comply with the EBU’s stipulation that its members must fulfil a “public service”, it will hold onto its membership.

According to Henrik Søndergaard, an associate professor in the University of Copenhagen’s media and communications department, the conformity of TV2’s new status with the EBU’s criteria is blurry.

“TV2 is still considered to be performing a public service,” he said. “In Denmark, it is a political decision that establishes which station is carrying out a public service – like DR or TV2 are – and which is not”. According to Søndergaard, there is no previous example of an EBU member being kicked out of the organisation either.

In several European countries, such as the United Kingdom or France, free-to-air channels are guaranteed the right to broadcast events like the Olympics due to a law introduced by the European Commission in the late 1990s. The law protects free-to-air channels’ rights to broadcast ‘crown jewel’ events – major sporting or cultural events deemed to be “of importance to society” – to their national audiences, regardless of other exclusivity agreements between event organisers and private pay-only stations.

However, only nine European nations, including Denmark, drew up lists in 1999. The original Danish list included the Olympic Games “in their entirety”, the finals and semi-finals of football’s World Cup and European Championship, as well as any games involving the Danish national side. The same provisions all applied to major handball championships.

However, Denmark revoked these measures in 2002, thus reverting to a situation where a pay-TV station could theoretically hold the sole rights to broadcast any of these events … providing they are able to acquire them.

Factfile | TV2’s viewers are in decline

Since becoming a pay-only station in January 2012, TV2 has lost part of its audience share. In 2011, its average weekly percentage was 27.36 per cent of all Danish viewers, according to weekly figures collected by audiovisual pollster TNS-Gallup, which are based on the TV consumption habits of 1,047 households. These same figures reveal that, over the first 33 weeks of the current year, the share has dropped to 24.12 per cent. Nevertheless, the fall has not benefited its main competitor, DR 1. According to the figures, DR 1’s viewership in 2012 has so far been 18.51 percent  – exactly the same as it was in 2011.

DR is a public broadcasting corporation funded by direct licence fee payments whose amount is set each year by the Danish parliament. The fees, which grant access to television, radio and the Internet, currently stand at 196 kroner per month for each household.