State Broadcaster Wins Denmark Radio License Auction

Michael Hedges - August 28, 2006

Reports from the scene tell of a brief, rather dull auction for the Danish national radio license formerly known as Sky Radio. The five qualified bidders had already narrowed to three. State-owned commercial broadcaster TV2 took the prize.

State owned commercial television broadcaster TV2 agreed to pay DKK 23 million (€3 million) annually for a license recently abandoned by News International. The broadcaster’s specific plans were not disclosed though the general direction will be similar to that of TV2’s television offering: big, popular and entertaining.

“We've been at eye-level with people. Now we'll be at ear-level with them,” said TV2 General Manager Per Mikael Jensen, quoted in the Copenhagen Post. The mid-August weekly TNS Gallup television audience survey showed TV2 with 52% market share.

In many ways TV2 is to Danish public broadcaster DR as ITV was once to the BBC in the UK: commercial television channel with public service remit set up by the government to take advantage of commercial opportunities. That changed in the UK, but not in Denmark.

The Danish Parliament in 2003 decided to put TV2 on the road to privatization, with the Ministry of Culture to decide when and how. The European Commission got into that discussion when it ruled that TV2 had received overabundant government subsidies, some €86 million between 1996 and 2002. Still, nothing has happened.

Three summers ago a radio auction offered two channels with national coverage, opening competition with public service broadcaster Danmarks Radio (DR), operator of four national channels. Sky Radio of the Netherlands, also known as News International Corporation, won what would become Sky Radio in Denmark for an annual fee of DKK 54 million (€7 million). That would be Mr. Murdoch’s money.

Talpa International - that would be Mr. de Mol – purchased the other new channel for an annual fee of DKK 22.5 million. TV2 was a bidder in the 2003 auction but not a winner.

Both new radio channels took to the air the same November day in 2003.  At the time a News International executive gleefully predicted a million listeners and “hundreds of millions” in ad revenue.

It never happened.  News International angrily walked away from the license last year, accusing the government of not fulfilling its obligation to provide sufficient coverage. Both sides are now enjoying the company of lawyers.

The Talpa owned station – now called 100FM – is still on the air.

In dramatic fashion erasing Sky Radio from Danish radio listeners’ shelf space benefited DR. Recently released 2nd quarter TNS Gallup radio survey shows the total DR market share at 70.6%, up from 66.3% a year earlier when Sky Radio posted a 5.9% market share. Radio 100FM, the Talpa International station, also increased to 7.1% from 6.4% market share year on year. 

Modern Times Group (MTG), SBS Broadcasting (SBS), Talpa International and Berlingske Officin qualified with TV2 for the recent auction, which took place August 23rd. SBS owns three TV channels and four radio stations in Denmark acquired from Clear Channel International when that company vacated radio investments in Europe. Berlingske Officin is a major publishing house in Denmark, also owning local radio stations and internet portals. It in turn is owned by Oslo-based Orkla Media.

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