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1 Market Structure and Media Ownership

The Danish media system is a hybrid one where strong public service broadcasters and private print and broadcast media co-exist, and where the commercial print media are subsidized by the state. The state interference in the media emanates from an understanding of editorially independent and economically sustainable news media as a catalyst for an informed citizenry and a vital democracy. This system is part of the Nordic model of “the media welfare state” (Syvertsen, Enli, Mjøs, & Moe, 2014) where the media have played and continue to play an important role in the development and renewal of the inherently Social-Democratic welfare state. What characterizes this model is, among other things, the understanding of access to information about current affairs as a public good, the institutionalized character of editorial freedom in the form of the “arm’s-length principle”, and the existence of a cultural policy that aims at ensuring diversity and quality in the news media.

Even though such diversity does exist in the Danish media market (where audiences can choose between 31 daily newspapers and many more weeklies, more than 40 Danish-language or subtitled television channels, more than 20 Danish-language radio channels, and numerous online offerings), a high level of concentration permeates the overall market structure. This chapter shows that concentration exists in all news media markets, and in some instances the same media firms operate across markets and dominate different types of media.

1.1 Newspapers

Over the last decades, the Danish newspaper market has faced the same downturn as most Western newspaper markets (Nielsen, 2012): from 1988 to 2013, the number of daily titles declined from 50 to 31 and the total circulation decreased 44.8 % from 1,903,246 daily copies on weekdays to 1,060,633. This reduction in the propagation of newspapers, however, has not (yet) resulted in equally large reductions of the journalistic workforce as 1,794 journalists worked at the daily newspapers in 2013, which is a 10.1 % decrease compared to 1,995 journalists in 1988 (The Danish Union of Journalists, 2014).Footnote 1

The newspaper market structure in Denmark is characterized by a high degree of concentration as the top four firms (CR4) accounted for more than three quarters of the total circulation in 2014. That is well above the 50 % that is usually considered the threshold for what qualifies as a concentrated media market (Albarran, 2010). As Table 1 shows, concentration has increased radically in recent years, primarily because of Tamedia’s expansion strategy of broadening the reach of Metroxpress, which increased its circulation from 184,533 daily copies in 2012 to 325,228 in 2014.

Table 1 Circulation shares (in percent) for the dominant newspaper publishers in the Danish market, 2012–2014 (weekdays, second half of years)
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Two types of ownership dominate the Danish newspaper market. The first type of ownership is the foundation. Both JP/Politikens Hus and Jysk Fynske Medier are owned by Danish foundations whose objectives are newspaper publishing; this way, the funds generated in the firms are reinvested in the development and running of the editorial activities, allowing for long-term continuity and stability in the firms as well as the market. The second type is a publicly traded company. Tamedia, Berlingske Media, and Bonnier are publicly traded companies with international ownership constellations where investors expect dividends from their investments.

However, the structures of ownership are in flux these years, and that blurs the overview of the pattern of concentration and the organizations that constitute it. The Swiss media firm Tamedia, for example, took ownership of Metroxpress in 2013; before that, Metro International owned 51 % of the shares in the newspaper, JP/Politikens Hus 24.5 %,Footnote 2 and the sale naturally decreased these firms’ shares of total circulation (Metro International no longer operates in the Danish market). More notable, in the beginning of 2015, the three regional newspaper publishers Fynske Medier, Jyske Medier, and Sydddanske Medier merged into the firm Jysk Fynske Medier, which is now one of the dominant actors in the Danish newspaper market. That position is further strengthened as, later the same year, the firm purchased six local newspapers from Berlingske Media; these local newspapers accounted for 4.1 % of the total daily circulation in Denmark in 2014. (For a longer historical perspective on developments in ownership of Danish newspapers, see Minke, 2008.)

In spite of this structural concentration of the newspaper market, a high degree of external pluralism exists since the newspapers have different profiles and target audiences, represent different political and social perspectives, and cover a wide selection of issues (cf. Hallin & Mancini, 2004). For example, the 18.2 % of the total circulation that JP/Politikens Hus accounts for consists of the functional market segmentation constituted by the national-conservative morning newspaper Jyllands-Posten, left-wing/elitist morning newspaper Politiken, and tabloid Ekstra Bladet (all three national newspapers) as well as a number of local newspapers. Furthermore, the newspapers generally subscribe to the internally pluralistic “omnibus principle” of representing different sides of stories (cf. Thomsen & Søllinge, 1991).

1.2 Television

Two structural conditions characterize the Danish television market: a consistently high degree of market concentration (see Table 2) and a high degree of state intervention.

Table 2 Rating shares (in percent) for the dominant television broadcasters in the Danish market, 2012–2014
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The state intervention exists in the form of the Danish state’s ownership of the two dominant television broadcasters—Danmarks Radio (DR) and TV 2 Danmark—which, combined, accounted for almost 70 % of total television viewing in Denmark 2012–2014 (see Table 2). The remainder of the viewing takes place on, predominantly, Danish editions of channels owned by international media firms Modern Times Group and Discovery, while non-commercial local television channels not affiliated to TV 2 Denmark only assume a marginal position in the viewing habits of the Danes (throughout the first quarter of 2015, for example, the average viewing of this type of television amounted to only 5 min per person; cf. The Danish Agency for Culture, 2015).

A small number of television channels are “must carry” channels that all television providers must include in the channel packages free of charge. The “must carry” channels are The Folketing TV Channel (live broadcasts from the floor of the Parliament), sign-language translated news broadcasts from DR and TV 2 Danmark, and audio described programs from DR’s channels DR1 and DR2.

Building upon the model of the BBC, DR is a state-owned firm that operates within the legislative framework of a “public service contract”, which is an agreement between DR’s board of directors and the Minister of Culture that typically runs for 4 years and must then be renegotiated (there will, however, sometimes be added appendixes throughout the 4-years period). The contract stipulates the conditions and obligations associated with DR’s permission to broadcast public service television in Denmark; these obligations include specific demands regarding the extent of news, culture, drama, children’s programming, etc., in the broadcasting schedule as well as DR’s other activities. DR gets funding from license fees, which all Danish households with a device that can receive and play audiovisual content broadcast to the public (i.e., a radio, a television set, or a computer, tablet, or smartphone with an internet connection) are obliged to pay. The rates of the license fee are decided upon by the Parliament for a perennial period that overlaps with the term of the public service contract. This way, it is the state that outlines the financial framework for DR, but it is not the state directly that finances DR. In 2015, DR generated 3673 billion DKK (492.36 billion euros) from the license fee (The Danish Agency for Culture, 2014a). So, DR does not operate in the commercial market, even though it obviously pays attention to ratings and navigates with an eye on the other actors in the television market as it does take part in the competition over audiences’ attention (Søndergaard, 2003).

DR broadcasts six different television channels: DR1 (the main channel with a broad program selection), DR2 (broad channel with particular focus on current affairs), DR3 (specialized channel that targets young audiences), DR K (specialized channel with programs about culture, history, and music), DR Ramasjang (specialized channel that targets 3–6 years old children), and DR Ultra (specialized channel that targets 7–12 years old children).Footnote 3 In addition to these television activities, DR has a number of radio channels (see below) and a strong online presence that consists of both audiovisual and written content. Especially the online news section of DR’s has been subject to intense debate through the 2010s as the private newspapers accuse it of unfair state-subsidized distortion of competition (Søndergaard, 2014).

As a result of a failed privatization process in the 2000s (see, e.g., Mortensen, 2006), the structure in market orientation and public service obligations are more complex for TV 2 Danmark than for DR. This firm is, namely, a publicly traded company where the Danish state owns 100 % of the shares, and it predominantly operates on market terms like any other commercial media firm. TV 2 Danmark’s portfolio consists of six television channels: TV 2 (the main channel with a broad program selection), TV 2 News (24-h news channel), TV 2 Charlie (specialized channel that targets senior citizens), TV 2 Zulu (specialized channel that targets young audiences), TV 2 Fri (specialized channel with programs about lifestyle and outdoor recreation), and TV 2 Sport (sports channel). While all these channels are purely commercial entities that are financed through a combination of advertisements and subscription fees, the main channel TV 2 also is subject to public service obligations imposed by the state; for example, the channel must have at least one daily prime time news broadcast and pay special attention to Danish culture (The Ministry of Culture, 2014). Furthermore, TV 2 Danmark has eight regional channels that operate as independent subsidiaries (within the legislative framework of TV 2 Danmark). They have news broadcasts on the main channel TV 2 as well as round-the-clock transmissions on distinct regional channels dedicated to first and foremost current affairs and culture. These regional channels are financed through the same license fees as DR and are also subject to public service obligations. TV 2 Danmark also offers its programs online on its TV 2 Play streaming service, which had more than 200,000 subscribers as of October 2015 (Madsen, 2015).

In addition to DR and TV 2 Danmark, the Danish television market consists of international actors such as Viasat (owned by Modern Times Group) and SBS Discovery Media as well as a large number of smaller channels that often operate on very local scales. Except of the condition that television channels broadcasting from Denmark must be authorized by the Radio and Television Board to use broadcast frequencies (channels broadcasting cable or internet need only be registered), state intervention is fairly limited for these actors.

1.3 Radio Broadcasting

The market for radio broadcasting is highly concentrated, but while both the newspaper and television markets are concentrated around a number of actors, a situation that borders to a de facto monopoly exist in the case of radio since DR accounts for almost three quarters of the total radio listening (Table 3). DR has eight radio channels, which are also regulated by the public service contract and have individual profiles that cater to specific audience segments: P1 (current affairs), P2 (classical music), P3 (pop music and current affairs aimed at younger audiences), P4 (10 regional channels with easy listening music and current affairs), P5 (music channel aimed at senior audiences), P6 (beat music), P7 (pop music channel), and P8 (jazz). The main competitors to DR are the commercial firm Bauer Media, which broadcasts contemporary music and minimal news broadcasts on, among other channels, NOVA FM and POP FM, and Radio 24syv. The latter is owned by newspaper publisher Berlingske Media and media firm PeopleGroup, which are commercial actors, but it operates on public service conditions as it is finances through the license fee and has obligations similar to the ones of DR. Radio 24syv was established as the result of a political ambition to break DR’s monopoly in national talk radio (The Ministry of Culture, 2010) and started broadcasting in 2011. The current framework of financing and broadcast license for Radio 24syv expires in 2019.

Table 3 Rating shares (in percent) for the dominant radio broadcasters in the Danish market, 2012–2014
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In addition to the CR4 actors mentioned in Table 3, 65 organizations (which range in size from one-man enterprises to larger commercial entities) got permission to broadcast local radio in 2012 when the Radio and Television Board last allocated rights to use the frequency bands for radio.

2 Regulations

As the review illustrates, media ownership across markets is a widespread phenomenon in the Danish news media industry: DR operates across television and radio, and Berlingske Media is a private newspaper publisher but also runs the public service funded Radio 24syv. Furthermore, JP/Politikens Hus’ tabloid Ekstra Bladet launched a digital radio channel in 2015 and broadcasts a large extent of online video, and newspaper publisher Jysk Fynske Medier has owned the commercial radio station Klubben, which serves the Funen region only, since 2008.

Media ownership across markets is allowed in Denmark, and in the case of DR it is even part of the public service contract. This organization must have a presence on television, digital and analogous radio, and online (The Danish Agency for Culture 2014a, 2014b). While there is no particular legislation about media concentration and cross-media ownership, the news media markets are regulated by the general competition legislation, which prohibits firms from abusing dominant positions (Act no. 869).

3 Media Innovation Policies

In the 1920s and 1950s, public funding underwrote the establishment of broadcasting networks as well as experiments and innovation in radio and television within the framework of a public broadcaster (today’s DR). After this funding for introducing broadcast on the Danish market, media subsidies have, however, primarily been instruments for supporting and regulating the activities of existing media firms whereas the development of new initiatives and media innovation have, instead, fallen within the commerce legislation concerned with the general establishing of firms. So, in a Danish context, media innovation has traditionally been a matter for media organizations to deal with and not something that the state has interfered in. The exception is national broadcasting, which has been and continue to be available on a limited band of frequencies and therefore requires some degree of regulation.

Even though the newspapers in Denmark are private enterprises, public subsidies play an important role in their financing. The subsidies are both direct and indirect; that is, they exist in the forms of both funds transferred directly from the state to the newspaper publishers and funds that the publishers do not have to transfer to the state because revenues from sales of printed newspapers are exempted from VAT (see also Hjarvard & Kammer, 2015). In 2010, the year of the most recent survey, the newspapers received 1393.9 million DKK (186.9 million eurosFootnote 4) in public subsidies in total; 417 million DKK (55.9 million euros) were in the form of direct subsidies while indirect subsidies, in the form of VAT exemption on newspaper sales, accounted for 976.9 million DKK (130.95 million euros) (The Agency for Libraries and Media, 2011: 90). Given the 5.5 million Danish citizens in 2010, the Danish newspapers were subsidized with 251.83 DKK (33.76 euros) per citizen.

New legislation supports media innovation and adaptation to the digital era in, especially, the written media more actively. Restructuring the press subsidy system in 2013, the Danish parliament enacted legislation that included a number of new measures to make it contemporary in a digital context and with the explicit aim of supporting media innovation (Act no. 1604). The law is effective of January 1, 2014, and it builds upon preparatory work by Professor Anker Brink Lund (Rambøll, 2009) and the so-called Dyremose committee (named after the chair, former Minister of Finance Henning Dyremose; The Agency for Libraries and Media, 2011).

First and foremost, the underlying principle for the granting of subsidies changed with this legislative revision: prior, the exact rates of subsidies were calculated on the basis of circulation (and it was in reality subsidies for print and the distribution of news), but now the subsidies are calculated on the basis of editorial work (i.e., journalistic production). This way, legislation for the first time allows for other media types than printed newspapers to receive press subsidies, thereby adapting to the structural changes in a news media market where online activities are increasingly prominent. It is a core element of the revised legislation that it is “platform neutral” rather than concentrated on one type of media and allows for supporting journalistic production regardless of how it reaches its audiences. However, similar to the situation in many other European countries (cf. Colbjørnsen, 2014), revenues from sales of digital news are not tax exempt in the same manner as those on print.

Of the total framework for subsidizing the press, 6 million DKK (0.8 million euros) is earmarked to “written internet-based news media” (Bill no. L 20) that must, in all regards, follow the same procedures and meet the same criteria in applying for subsidies as the traditional news publishers. In 2014, the first year where this type of news media was eligible for press subsidies, digital publishers received a total of 15.9 million DKK (2.13 million euros), which is equivalent to approximately 4 % of the total press subsidies that year and more than 2.5 times the basic earmarked amount.

In addition to the earmarked funding for digital-only publishers, the legislation has a specific pool for media innovation subsidies. This pool consists of 20 million DKK (2.68 million euros) that is allocated as “supplements to the establishing of new, independent printed news media or written internet-based news media or as supplements to conversion or development of already existing print news media or internet-based news media” (Executive Order no. 1653, para 14, translated by the author). The bill, drafted by the Minister of Culture, emphasizes that the innovation pool must be ready to take risks (Bill no. L 20); in this type of context, risk typically comes in the form of granting subsidies to news organizations with limited manpower and uncertain prospects of success and even survival. Furthermore, the law stipulates that the members of the seven-person council that processes applications for press subsidies (The Media Board) must represent expertise within, among other things, “journalistic innovation” (Act no. 1604, para 12).

4 Summary and Best Practices

To summarize: the Danish news media markets are all highly concentrated, and while the level of concentration is fairly stable for television and radio, it has increased for newspapers in recent years due to mergers and strategic expansions. Furthermore, the news media markets are characterized by a large extent of state intervention; while the newspapers are privately owned and operate on a commercial basis, they are nonetheless heavily subsidized by the state, and in both the television and the radio markets state-owned media firms account for approximately 70 % of the total viewing and listening. DR, the state-owned and license-financed public service broadcaster, assumes a particularly prominent position across broadcasting markets.

Policy solutions to stimulate innovation in the news media industry remain a recent phenomenon as they were not introduced until 2014 (with the exception of the establishment of broadcasters in the 1920s and 1950s). As something new, the current legislation (Act no. 1604) has earmarked subsidies to digital news and to innovation, and that will likely improve the long-term sustainability and development of the news media industry. However, since the legislation is only a few years old while this chapter is written, it is still too early to judge whether it will have a lasting impact in improving the conditions for the Danish news media industry in the digital age or not and to identify best practices from it.

5 Innovation Policy Recommendations

Storsul and Krumsvik (2013: 14, emphasis in original) say that “innovation implies introducing something new into the socioeconomic system”, and if the aim of the most recent revision of the press subsidy legislation is to support media innovation, it is somewhat successful. Something new has indeed been introduced to the news media industry, where digital publishers received more funds in subsidies than the amount that was earmarked to them in 2014 and, thereby, became more sustainable in an increasingly digital economy.

The actual implementation of the innovation pool, however, shows a more ambiguous development. From an innovation perspective, the 20 million DKK (2.68 million euros) pool for subsidizing news media innovation is a welcomed initiative since it can help new (predominantly digital) actors enter the media market and increase diversity in the news. However, only 10.4 million DKK (1.39 million euros) were granted to the applying news organizations in 2014 in contrast to the full 20 million DKK (2.68 million euros) in 2015. That distributed amount of subsidy funding suggests that there is sufficient funding for the activities which the legislation aims at supporting—but the 2014 distribution of subsidies also raises the question whether the eligibility criteria might be too narrow to properly support real innovation in the news media market (see also the critique raised by, e.g., Poulsen, 2014). For example, the legislation stipulates that the subsidized media must cover “political, societal, and cultural themes” (Act no. 1604, para 3), but since applicants for the innovation subsidies will often be sparsely staffed start-ups they might have difficulties in covering all three fields simultaneously, and that will disqualify them for subsidies. Furthermore, the subsidies are specifically aimed at written news media. From an administrative perspective, such a specification of concrete criteria is reasonable, but one consequence of it is that it excludes actors that operate with other journalistic genres than news and other modalities than text even though they can also have an impact with regards to informing the citizenry. So, to the extent that the ambition of the legislation is to improve the condition for new, innovative initiatives in the media market, legislators could consider broadening the scope regarding which types of journalistic initiatives are eligible for innovation subsidies.

The framework for indirect subsidies to news organizations is one other area where the legislature could consider future adjustments to further support media innovation. If part of the ambition of the recent revision of the press subsidy legislation was to make the position of digital and printed news more equal businesswise, the current VAT system is inexpedient because it places digital news at a disadvantage since it is subject to 25 % VAT while print news is VAT exempt. So, digital news gets no indirect subsidies, and newspaper publishers have an economic incentive to proceed with a focus on print media rather than prioritizing online editions and innovation of new practices for presenting and distributing news. Direct subsidies are granted to print and digital news on equal terms, and if legislators want to improve conditions for media innovation and sustainability in the future, one recommendation would be that the same could be the case for digital news.