The art of the deal
Artists call for cut of the profits in ‘bloodthirsty’ resale market
Artists could get a share of the spoils each time their works are bought and sold if a law that has divided the art world is finally adopted here. Normally, when someone sells something they own, that is the end of their economic interest in the item.
But the Paris-based International Confederation of Societies of Authors and Composers (Cisac) is calling for the Government to join more than 80 countries by including an ‘‘artist’s resale right’’ in the Copyright Act, which is currently being reviewed by officials.
That would entitle artists to a royalty payment each time their works were commercially resold, resurrecting a plan that was first mooted in New Zealand in 2007 only to be shelved two years later.
Cisac director-general Gadi Oron, who was guest of honour at a parliamentary reception hosted by Commerce Minister Kris Faafoi in December, said artists’ resale rights were about ‘‘fairness’’.
‘‘In music, if a piece of work is successful you have more downloads, streams and broadcasts and the creator will get more money,’’ Oron said.
‘‘But if a work of art increases in value, it is because there is only one copy and the reputation of the artist has increased and it is only fair the creator should benefit from that.’’
Dunedin street art advocate Bruce Mahalski is among the artists who believe resale rights would be long overdue.
Many of the country’s most famous artists, including painter Rita Angus, were not recognised in their lifetimes and were instead supported by their families, he said.
‘‘The resale value of her works is now enormous and there are people in her family who should be benefiting from that.
‘‘Art is in a realm of its own in that it is often appraised very differently with the hindsight of history.
‘‘The phenomenon of artists only becoming successful when they die is so well known that most people would accept that.’’
Mahalski said that this compounded separate injustices, such as advertising agencies making free use of street art in commercial campaigns.
‘‘It is particularly galling when that happens. There is really no comeback . . . so as an artist you are slammed every which way.
‘‘It is hard to get famous and there are so many people trying to do it . . . dealers mostly take 50 per cent now, and there are people ripping off your work wholesale as soon as you put it on the internet.’’
Artists’ resale rights were first enshrined in law in France in 1920 following a debate that was spurred by the publication of a cartoon that depicted a ‘‘fat auctioneer’’ presiding over the sale of a painting while the artists’ impoverished children looked on.
Within the European Union, artists are entitled to a royalty payment of between 0.25 per cent and 5 per cent of the gross sale price of artworks they originally created, when they are resold by their owners through an auction house or art dealer.
That is so long as that sale price is above a minimum threshold, which varies from €250 (NZ$416) to €3000 between EU states, and the artist has not been dead for more than 70 years.
Royalty payments are capped at €12,500 for any single sale.
The policy has been given fresh impetus by a belief it can help protect indigenous artists, in particular, from exploitation.
Since 2010, Australia has applied a 5 per cent royalty on artworks including sculptures, weavings, photographs and fine jewellery that are resold for more than A$1000 (NZ$1030), during the 70-year post-death period where copyright still applies.
A significant caveat is that the right does not apply to the first resale of artworks acquired before 2010 and – as in the EU – the royalty does not apply to private sales.
Nevertheless, the Australian Copyright Agency says payments totalling A$7.7 million have been made to 1880 artists since the law was introduced.
‘‘Over 63 per cent of the artists receiving royalties are Aboriginal or Torres Strait Islander artists and they have received 38 per cent of the total royalties.’’
Mahalski said a resale royalty rate of 10 to 20 per cent might be more reasonable.
But not all artists are in favour. Influential contemporary artist Dick Frizzell said he would not expect a cut of the profit from the resale of his works from dealers, as it didn’t make sense to him.
‘‘I think it would add another layer of bureaucracy and complication to a very peculiar industry. The sort of prices that make a ‘divvy’ significant mean it would only benefit a tiny handful of artists anyway.
‘‘The story about the young artist fading away and seeing their works going for millions is a bit of a myth – it doesn’t really happen any more.’’
Frizzell acknowledged not all artists felt the same way.
‘‘Some have very strong views to the contrary. Maybe I’m being unfair, because I’ve been successful.’’
Richard Thomson, director of International Art Centre in Parnell which deals in fine arts, said artist resale rights were a nice fairytale, but ‘‘did not work’’, in part because of the administration costs. ‘‘The most successful artists in Australia are the ones benefiting and they are not the ones that are needing these royalties.’’
Artist resale rights could dissuade investors from buying art, or result in art buyers trading works privately or overseas in countries where the royalties did not apply, he said.
‘‘Why would you buy artworks in the first place if you knew 5 per cent of the profits would go back to the artist who you have already paid?’’
International Art Centre had private arrangements with some artists under which it paid them when works went through its auction house, for example to promote its service or to add their signatures to works.
But those arrangements would go out the window if the royalty rights were brought in, Thomson said.
‘‘We’d be following legislation at that point.’’ The costs of setting up a body to administer royalties would be ‘‘ridiculous’’ and the ongoing costs of maintaining it would swallow up any returns for the artists, he said.
‘‘I believe artists would lose out in the long term.’’
Charles Ninow, head of art at auction house Webb’s, said he had advised officials who are reviewing the Copyright Act to think carefully before following in the footsteps of the EU and Australia.
‘‘It is a tough job being an artist and I know it is hard for them to see works they might have sold for a sum that looks relatively insignificant resold
for reasonably significant sums down the line, and on the surface that doesn’t seem fair.’’
But royalty payments of a few percent would generally not be life-changing amounts, and more of a gesture, he said.
‘‘I can’t see a meaningful amount of money would return to those who really need it.
‘‘The most valuable works we sell on the secondary market are all by artists who are deceased.’’
While there might be something to be said for families of artists receiving such payments, they would generally own artworks by their family member and might be more likely to profit from their reputation from that, he said.
A more effective way for the Government to support artists might be through a fund that subsidised studio space for young artists.
‘‘That is a huge expense for artists graduating out of art school.’’
Mahalski said it was not surprising that dealers were opposed to resale royalties, and the issue of support for younger artists was a completely different matter.
Most dealers were family-run operations that were not making a lot of money, but the top ones were ‘‘doing very nicely, thank you’’, he said.
Resale rights would give them more stature and they should be embracing the idea.
Frizzell said he didn’t think art was in the ‘‘nursery’’ business.
‘‘It is a bloodthirsty competition, this racket. It is not a socialist system.’’
But the Arts Council was ‘‘doing its job’’ dishing out money to people who had proved their commitment, he said.
‘‘Some people think that if you gave them the money now, they would prove the commitment – but it doesn’t work like that.’’
The debates may be destined to fester a while longer.
Industry sources said the overall review of the Copyright Act appeared to be proceeding very slowly and might not prove a political priority during the election year.
The act has not been materially updated since 1994 when the use of the internet was in its infancy and officials are grappling with the thorny, broader issue of how to balance the interests of content creators and those of internet giants such as Google.
Oron hoped the Government would also amend the Copyright Act to include rules similar to the controversial ‘‘article 17’’ in the EU’s copyright directive.
Once implemented by member states, article 17 could make it much easier for content creators to hold internet companies liable for hosting material that was uploaded by the public in breach of their copyright.
The objective of the article is to create an additional revenue stream for content creators and media businesses by persuading internet firms to enter into more agreements to buy licences to useruploaded material.
‘‘It is about protecting the creative sector,’’ Oron said, referring to that wider controversy.
‘‘It is also about encouraging, I believe, more competition in digital services.’’
Oron said he was optimistic.
‘‘The impression I have from documents released so far is this Government is prepared to achieve a very careful balance so the creative sector will be supported.’’
Such a balance was also in the interests of internet businesses, he said.
‘‘Digital services are nothing without us, and we won’t make a living if they don’t pay.’’
‘‘It is a bloodthirsty competition, this racket [art]. It is not a socialist system.’’
Dick Frizzell, left