Whenever you see "de" you should assume it means either "the" or "they". Although it can also mean "formal you" nobody uses it like that anymore. I have never used "de" as the formal you in my life and the only situation where i can imagine using it is if i had to meet the queen or someone like that.
However in this sentence you can't tell if it is you or they.
I can hear it. If you can't now, you will be able to if you keep at it. Also, it might not be as clear in the Duolingo sound files as in person. Forvo has an example of each and the difference is, in my opinion, quite clear: https://forvo.com/word/aviser/#da https://forvo.com/word/avisen/#da
So, how come some questions start with "Are" ("Are they reading the newspapers?") and some with "Do"? How do I tell which is which? At the moment I just guess. Sometimes I'm right, and the question starts with "Are..." but other times, like this time, I'm wrong and it's "Do they read newspapers?"
I speak Swedish (the closest relative to Danish). I'm fairly certain there is no difference in the grammar. That is, there would not be one in Swedish (Läser de tidningar? = Are they reading newspapers? / Do they read newspapers?). The context and/or intonation would decide. However, a native Danish-speaker should answer this to confirm. Also, "aviserne" (definite plural ending) is "the newspapers" in Danish.
There are certain patterns, but that's all: http://www.statsci.org/dansk/gender.html
One thing to take into account is that "common gender" words (-n words), is a fussion of previous male/female gender, so things with sex will go there, but there are many more things in there than animals. The typical examples are sol and månen (Sun and Moon), which are common gender, but probably because in the past they were seen as deities. Others would be ild (fire), which is not a living thing, but still in the common gender.
In any case, all this arbitrary male/female/neutral probably comes from the times of Pre-Indo-European, which purportedly had two categories: animate and neuter (or inanimate), with animate splitting later into male/female. If so, it would make sense that fire (which even in poetry we make a living, moving thing) is seen as something "animate", or even a plant (plante is also common gender), which can grow. But this is all speculation, I'm no linguist...