NRK’s funding model changes while Norway pushes VoD platforms to invest in local content
- The national pubcaster will now be financed through a tax instead of a licence, and the Minister of Culture is looking at forcing global streaming platforms to invest locally
From 1 January 2020, the Norwegian Broadcasting Corporation’s (NRK’s) financing model will change from being licence fee-based to being tax-based, as announced last week by Norway’s Minister of Culture and Equality, Trine Skei Grande, as part of the government’s 2020 state budget discussion. Also, the minister introduced some ideas that are intended to force global VoD platforms to invest in Norwegian content.
In detail, the previous NRK licence fee will be replaced with a public grant, which will match the previous amount and stand at NOK 5.7 billion (€566.4 million); after adding the extra VAT contributions, this reaches a total of NOK 6.4 billion (€635.9 million). This is the beginning of a four-year plan for NRK’s financial framework, and for the first half of that period, until 2022, the government has proposed that said framework should be adjusted annually in accordance with inflation and wage growth, but 0.5% in efficiency requirements will be deducted.
Trine Skei Grande added: “This is important to ensure a forward-looking financing model for an independent NRK. This model will have a social profile to a greater extent than the licensing scheme did.” Also, NRK’s director-general, Thor Gjermund Eriksen, stated: “I am satisfied that there are no surprises in store. At the same time, it is a fact that NRK is encountering stronger global competition and expectations of increased quality, and with the budget for 2020, it means that NRK must improve its efficiency next year.”
Another proposal by the minister is to ensure that streaming platforms such as Netflix, HBO and Amazon will be forced to support the production of Norwegian films and series, and this will be done by introducing a co-financing obligation. Through such a scheme, the platforms will have to invest a part of their profits in the Norwegian market and back into local content, and they will be free to channel these funds into productions they want to show. The exact level of investment and any further details will have to be presented and discussed next year. Netflix has already been active in Norway by co-producing, alongside NRK, the successful gangster series Lilyhammer, while HBO’s first original Norwegian series, Beforeigners, directed by Jens Lien (see the news), premiered in August this year.
The proposal was well received by Norwegian producers. “My first reaction is, ‘Finally!’ We have been working on this and asking for it for several years, so this is a positive thing. We look forward to collaborating with the ministry to find the best level of investment obligation, and we hope this will be put in place quickly. This measure will, in fact, help us to produce top-notch Norwegian films and series in the future,” said Åse Kringstad, director of the Norwegian Producers' Association, after the announcement.
According to the Ministry of Culture, ten other European countries have introduced similar co-financing obligations via different schemes. Previously, NOK 3.5 (€0.35) from every DVD sold in Norway went to the state and the producers, but this contribution is almost non-existent now, as more than NOK 2 billion (€198.7 million) have been diverted from DVD sales to streaming services over the last ten years.
Finally, the government announced that the 2020 budget for the Norwegian Film Institute will remain the same, at around NOK 713 million (€71 million), and the regional film centres will receive an extra NOK 7 million (€695,000) boost. Meanwhile, the regional funds will be supported with an additional NOK 10.5 million (€1.043 million), and the International Sámi Film Institute will get NOK 2.5 million (€248,000).
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