To many of our international readers, the concept of a large state-funded media giant evokes thoughts of Cold War propaganda machines. The 3.8 billion kroner budget of Danmarks Radio (DR) has enabled it to dominate a wide range of media including radio, TV and the internet, causing private broadcasters to grumble that their territory is being invaded by a state-run entity that is unaffected by turbulent advertising revenue and declining newspaper circulations.

In the spring, the government will open negotiations about DR’s next four-year budget. The debate has already started, with some demanding that young people should be offered a discounted licence fee – which is currently 2,436 kroner a year – while others argue that the licence should be abolished and replaced with a voluntary subscription fee.

There are legitimate reasons to question the licence fee model. Should Danes really pay almost 2,500 kroner per household per year for news, TV and radio that private broadcasters are perfectly able to provide? And should foreigners also be obliged to pay the fee, given that very little of DR’s content is produced in a language other than Danish?

Democracies powered by free markets pride themselves on choice, but when the choice is taken away – few households can avoid the licence fee – resentment inevitably builds. This resentment is only compounded when tax-funded state services do not work. And DR is not immune. Just look at how its much-touted exit ‘prognoses’ during the local elections ended up being way off the mark.

But DR does produce some excellent work. DR journalists won the Cavling Award (the Danish equivalent of the Pulitzer Prize) for their reporting on the use of tax havens, while DR dramas ‘The Killing’ and ‘Borgen’ have been sold across the world.

The question is whether Denmark needs DR? If private media and broadcasters were up to the job of providing high-quality Danish-language news and media, why not leave the job to them? Especially if it opens the market to private companies who are unrestricted by Danish public service laws.

While DR has secure funding, newspapers have slashed budgets for vital investigative journalism as their circulations dwindle, and broadcasters have no incentive to provide entertainment for residents with niche interests, given the scarcity of advertising funding.

At the same time, the same newspapers complaining about DR’s unfair advantage are given enormous subsidies. Given the enormously successful and relatively cheap streaming entertainment available from suppliers like Netflix, DR’s days as a media tour de force may ultimately be numbered. Until then, the government needs to find a balance that provides enough space for entrepreneurs, while also allowing DR to produce the kinds of services only it can provide. (PS)