Newspapers and commercial broadcasters have been under significant financial pressure in recent years as circulations and viewer numbers drop and advertising revenues dwindle.

But one media organisation is immune to the market: public broadcaster Danmarks Radio (DR), which can rely upon a regular income provided by the 2,436 kroner annual licence fee that every Danish household is obliged to pay.

In the spring, the government will open negotiations for DR’s next four-year budget, starting in 2015, and political parties and media organisations have already voiced their concern about the creeping reach of the state-owned media apparatus.

3.7 billion kroner budget
The licence fee raises around 4.3 billion kroner a year, of which around 3.7 billion is given to DR and the remainder to TV2 Regioner, Radio 24syv and the Danish Film Institute.

In exchange for its funding, DR must provide a wide array of programmes and services that include news, information, education, art and entertainment, with a particular focus on the Danish language and culture.

Dissenting voices accuse DR of overstepping this remit, however, and directly competing with commercial broadcasters and media organisations.

Public vs private
DR’s new youth-orientated channel DR3 has been the focus of scrutiny for showing a high proportion of imported and non-Danish entertainment programmes that critics say would be better suited to commercial broadcasters.

Television providers such as YouSee – already under pressure from popular online streaming services Netflix and HBO Nordic – have to compete with DR’s own online media player that provides hours of streamed entertainment at no additional cost.

DR’s news website also threatens newspapers such as Politiken, Jyllands-Posten and Berlingske who have all had to introduce varying forms of paywalls in order to extract money from readers to fund their original journalism.

“[DR is] ramping up [its] investments in mobile and online content in direct competition with private media that are attempting to secure their future business by charging for quality journalism on the internet and online,” Berlingske newspaper’s editor-in-chief, Lisbeth Knudsen, wrote in her blog. “In other words, it is the start of a large political test: will the future media landscape be run and dominated totally by the state’s own media, or it will be a fruitful mix of state and private media providers with a sensible division of labour?”

Abolish the licence fee
One of the proposed solutions comes from the libertarian political party Liberal Alliance, which has suggested replacing the licence fee with a voluntary subscription for DR, topped up by a minimal amount of state support.

“I really like DR and I think it is really important that we have a public service institution that makes programmes that the commercial market cannot provide,” LA’s media spokesperson Mette Bock told Politiken newspaper.

“Some say that DR would have to close if it were subsidised by a voluntary subscription, but I don’t share that pessimism. I think we are underestimating the Danish wish for quality,” Bock said, adding that DR could still provide a public service with a smaller budget.

Licence fee is transparent
But on the whole, few political parties have so far expressed support for changing DR’s funding model.

“The advantage of the current licence model is that people know exactly what their money goes to, creating an awareness of DR, TV2 Regioner and Radio 24syv, which I think is healthy,” Mogens Jensen, the media spokesperson for the ruling Socialdemokraterne, told Jyllands-Posten newspaper.

Jensen and others have expressed interest in lowering the cost of the licence fee for young people following a poll in which 45 percent of those aged between 18 and 35 said they would rather not pay it.

DR hoped that programmes like DR3’s ‘Monte Carlo elsker jøderne’ (Monte Carlo loves the Jews) would attract younger viewers but a new poll shows that young people would happily give up DR’s programming if they could stop paying the 2,436 kroner licence fee (Photo: DR / Casper Østergaard Vester)

Shift in content
The government will probably want to secure a broad political deal on DR’s budget, meaning that it will have to acquiesce to demands from lead opposition party Venstre.

Despite the party’s desire to freeze the rate of growth of the public sector, Venstre has so far not demanded any cuts to DR’s budget and is instead likely to demand that DR modify its programming – particularly on DR3 – to include more original and Danish-language content.

Henrik Søndergaard, a lecturer at the University of Copenhagen’s Department of Media, Cognition and Communication, argues that this is the most likely outcome of the negotiations.

Licence fee to stay
“The politicians may agree to reorganise DR3, but from what I can see, DR has already expressed a willingness to make changes to the channel and raise the percentage of Danish-produced programmes,” Søndergaard said.

The former Venstre-led government established a commission to investigate whether the licence fee should be abolished, and a report is expected soon.

But Søndergaard argues that a call for the end of the licence-fee system is unlikely if it meant that DR would stop being able to provide programming that is commercially nonviable for private broadcasters.

Vital role
“DR’s programming must address everyone instead of the lowest common denominator, and therefore must provide a mix of cultural, educational and children’s programming, with a high proportion of Danish programmes. Denmark’s small size makes it difficult for commercial broadcasters to provide quality programming that is attractive to the whole country,” Søndergaard said.

Another of DR’s roles is to act as a social glue and keep Denmark together, Søndergaard argues, which is achieved through high-quality – and generally quite expensive – programmes that still have mass appeal.

“DR is the only broadcaster capable of producing the popular drama productions, such as ‘The Killing’ and ‘Borgen’, because they are so expensive. The shows are widely enjoyed across the political spectrum and can help avoid social fragmentation,” Søndergaard said.

A meeting place for Denmark
DR’s director general, Maria Rørbech Holm, agrees that the public broadcaster should be a place where all Danes can meet, become informed and discuss – and with 96 percent of Danes using DR’s services at least once a week, she may be succeeding.

“It would challenge Danish democracy if we only receive content from other parts of the world and don’t have anything that brings us together as a nation,” Holm told Berlingske.

“That’s why it is important that both private and public service media make sure that Danish programming makes an impact, and that there is media based on Danish values and culture that can bring together the entire population,” Holm emphasised.