Denmark’s stand-off between creatives and streamers such as Netflix, Amazon Prime Video and TV2 Play has left the country’s production industry “completely screwed”, leaving one of the country’s biggest execs urging Create Denmark to compromise to avoid the industry going under.
Lars Hermann, the former DR exec who now works for Blackwater producer Apple Tree Productions, told the MIA Conference in Rome that “greed” and an overestimation of the demand for Danish shows lay at the root cause of the problem.
Almost 2,000 leading names in the Danish content business yesterday published a letter urging the situation to be resolved, as the industry braces itself for losses of up to €200m ($200m) with the stalemate over rights payments from streamers showing no signs of abating.
The stand-off between streamers including Disney+, Amazon Prime Video, TV2 Play and Netflix, among others, has been ongoing since January, causing more than 50 titles to be stopped at either development or production stage.
Actor and director union Create Denmark had initially put forward a new raft of proposals around rights payments, which included changing the payment based on a show’s popularity, whether the commissioning streamer grew in size and how many years the show’s rights remained with the platform.
These were swiftly refused by commissioners largely because prices soared and, as Hermann pointed out, there was no fixed cost to a show.
Hermann said Create Denmark had misjudged how much streamers would be willing to pay for Danish content, adding that they “didn’t think they had reached a ceiling on payments – we should have been harder on those discussions but we are talking about a situation where we thought streamers would grow. We thought the sky was the limit, but it’s not.”
Hermann continued: “The problem is that we have completely overestimated – us and [Create Denmark], we have our share of responsibility – how much people like Danish content and that many [streamers] can do without Danish content. And furthermore, there’s the war in Ukraine, inflation, supply problems, our economy is heading to recession and platform subscriptions.”
Hermann admitted that producers and Create Denmark had “over-reached” but said it has become abundantly clear that the actor and director union must “compromise” urgently to stop yet further damage to the industry.
The Apple Tree exec added that the proposed 6% levy on streamers would place further pressure on the industry, describing the tax as “absolutely bonkers”.
“It’s the worst deal made in Europe. It has no relationship to the business of being a streaming platform,” he said, adding that it made no sense to tax a companies such as TV2Play and Netflix – both previously regular commissioners in Denmark – at the same rate as companies such as Amazon Prime Video that do not invest in local shows.
“There are also no published rules on how tax will be carried out,” he added. “It’s a real shitstorm.”
Nordic streamer Viaplay has struck an interim agreement that has allowed some shows to be produced and TV2Play has an annual commissioning commitment because of its government ownership.
However, global streamers look unlikely to order local shows soon, with Hermann adding that while there have been talks with TV2 and Netflix, there are currently no discussions taking place with Amazon Prime Video and other platforms.
Netflix, Denmark’s TV2, Viaplay, HBO Max and the other streamers have been estimated to contribute around DKK1bn ($140m) annually.