Australian Artists To Get Paid Multiple Times For Their Artwork

from the wouldn't-that-be-nice dept

Tue, Oct 7th 2008 10:04am — Mike Masnick

We've discussed in the past how various countries have been putting in place a ridiculous resale right for artists, that allow them to collect a royalty every time their artwork is sold. In other words, this removes the important right of first sale, that says when someone buys a piece of artwork, they actually own it. Instead, these "resale rights" let various artists collect a "royalty" every time the art is resold. That would be like saying you need to pay Honda a royalty after you sold your used car. Reader madlep points out that Australia has now gone down the same road and instituted a 5% fee on any resold artwork for the artist.

The Arts Minister who supported this is apparently Peter Garrett, who some of you may recognize as the lead singer of the popular rock band Midnight Oil (who I saw in concert many, many years ago). He claims that: "It's a really, really good day for Australia's artists," but that betrays a rather troubling lack of understanding of basic economics. Adding this resale right, actually serves to significantly depress the market for these artists that he's supposedly trying to protect. Because any buyer now knows that there's an additional tax on any resale, meaning that they're less willing to purchase in the first place (or only interested in purchasing for a lower price). It also makes them a lot less willing to sell the piece, because the selling price now needs to be even higher. On top of this, it will encourage more sales to be to foreign countries, where this "right" does not apply.

Garrett is also confused in saying: "Why should artists not have had the opportunity for some copyright protection of their work, or equivalent rights that writers, for example, have?" There's a very easy answer to that. Copyright protection is designed to deal with the issues of copies, not the original works. When it comes to these artists, they're selling original works. And, when I put my old Midnight Oil tapes and CDs up for sale, I'm certainly hoping that Garrett doesn't expect to get paid again for them. That would just be silly. He already received the money when I purchased them originally -- just as these artists received their money when their artwork was purchased.

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Filed Under: artists, australia, economics, first sale, midnight oil, peter garrett, resale rights

56 Comments

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bob, 7 Oct 2008 @ 10:33am

good news
This could be really good news for painters who become popular before they die. Imagine making 5% off of a resold painting that goes for a few mil at auction.

For some reason though ... I think they don't mean "artists" but "content creators".
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J.Locke, 7 Oct 2008 @ 10:34am

Join the ESA
"I'm certainly hoping that Garrett doesn't expect to get paid again for them. That would just be silly."

Activision doesnt think so?
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Anonymous Coward, 7 Oct 2008 @ 10:42am

This concept, largely derived from French law, is referred to as "Droit de Suite", and in its most general sense applies to works of "fine art" (whatever that means).

In its attempt to harmonize US law to that of other signatories to international copyright treaties, the US has made some changes to its copyright law (e.g., VARA), but to date has refused to embrace the "resale right" concept and add it to the list of rights conferred by copyright law. Not being a part of our federal law, California has jumped on the European bandwagon and instituted its own counterpart. Insofar as I am aware, California stands alone among the states.
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ChurchHatesTucker (profile), 7 Oct 2008 @ 10:56am

Re:
This is why I hate Voltaire.

OTOH, it's good "work" if you can get it.
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Buzz, 7 Oct 2008 @ 10:56am

Ugggh...
I am growing very weary of these content creators who feel they are entitled money from every individual on the planet who even slightly enjoys the content. Where are my royalties as a consumer? Perhaps we should start demanding commissions for every time we introduce a friend to product and that friend ends up buying that product. We are increasing the content creator's revenue. If we are not entitled to a referral commission, content creators are not entitled royalties for resale.

A resale is essentially a transfer. As Mike pointed out, the artist has already been paid! When I sell my purchased item to someone else, I am denying myself access to that item. That is why I get money for that resale. The content creator did nothing.
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J.Locke, 7 Oct 2008 @ 10:59am

Re: Re:
"This is why I hate Voltaire."

You sir are a dirty Monarchist!
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Your Gawd and Master, 7 Oct 2008 @ 11:05am

and this is why...
I won't be buying any used Midnight Oil albums in the future, even if I don't live in Oz.
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Anonymous Coward, 7 Oct 2008 @ 11:09am

Re: Ugggh...
Devil's Advocate would say that the resale was possible because of the value of the original works. If the original works wasn't valuable, then your ability for resale would be reduced.

Either way, I like the idea of referral commisions.
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Chronno S. Trigger, 7 Oct 2008 @ 11:14am

Re: Re: Ugggh...
And I would counter with the value has already been payed for by the original purchaser.
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Dosquatch, 7 Oct 2008 @ 11:16am

How do I get in on this deal?
I mean, some of us in other professional fields might like to continue to get paid for work we did years after we did it.

"That's right, $70 now to fix the computer, plus $1/day for as long as what I fixed doesn't break."
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Ima Fish, 7 Oct 2008 @ 11:17am

"That would just be silly."

Yep, attempting to sell your copy of a Midnight Oil CD would be silly. Asinine is also fitting. A waste of time also comes to mind. Because, really who would buy even a used Midnight Oil CD?!
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Colin Suttie, 7 Oct 2008 @ 11:21am

I was in Australia during the election campaign, and can testify that Peter Garrett is indeed an economic muppet. Hardly surprising considering he's a) a musician b) a former board member of Greenpeace and c) a member of the left-wing party in a country where even the supposed conservatives are quite far to the left of the US Democrats.
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Ima Fish, 7 Oct 2008 @ 11:21am

I don't know the exact language of the law, but why can't a house or car painter get in on this? If I paint your car, shouldn't I get 5% when you sell it? If a painting of a soup can can be recognized as high art, why not the paint job on a Honda?
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Killer_Tofu (profile), 7 Oct 2008 @ 11:22am

Re: Re: Ugggh...
Chronno beat me to it.
If the original work wasn't valuable, it would not have been bought in the first place. They are paid what it is worth at the time.

I am a programmer, and many people use the stuff I create and may use it for years in the future (future hasn't happened yet, hard to tell).

I do not demand such stupid rights as this.
I am paid once for my time. The time used to create the object. After that it is out of my hands. Simple. My business model is sustainable. And I actually know how to use a bank or any other form of saving money, unlike what seems more and more like most content creators around the world. I expect no continuing income for work I did years ago.

I actually see this as an incentive for artists in Austrailia to create LESS art. Now they know they can create less, and they will get more money later on because of these BS "royalties".
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Serge, 7 Oct 2008 @ 11:33am

There is something faintly ironic in reading a blog posting which mischaracterizes even a short newspaper story describing this new royalty scheme, written by someone who toutes basic first-year microeconomics as revelation (prices tend towards marginal cost? rilly rilly?), who tops it off with the conclusion that the arts minister in question has show himself to be an economics illiterate.
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Seth, 7 Oct 2008 @ 11:53am

Economics of Art
Many of these commenters assume that artists think like industrial capitalists in creating art and that art collectors consume paintings like pork bellies. The fact is that most artists don't make much money. Unlike authors and musicians they don't continue to receive any type of royalty after their work is sold, no matter how many people may walk by in a gallery admiring their work, no matter if prints are produced, re-produced and sold en masse.

I don't know of any artist who creates according to the laws of supply and demand. It is a deeper calling that has nothing to do with making a profit or getting rich.

The really valuable pieces don't become so until after the artist dies anyway. Who gets the royalty then?
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Random Techie, 7 Oct 2008 @ 12:06pm

Re: Re: Ugggh...
I think the main idea here is that resale is inhibited thus creating more original sales. As pointed out in a an earlier, similar post about EA's attempts at the same thing, the resale market serves to increase public access and awareness of artists/content creators and thus encourage more original sales as well as foster the secondary resale industry. Clear like mud....
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ChurchHatesTucker (profile), 7 Oct 2008 @ 12:08pm

Re:
"If a painting of a soup can can be recognized as high art, why not the paint job on a Honda?"

For that matter, why doesn't Campbell's get paid when the soup painting gets sold?
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Vincent Clement, 7 Oct 2008 @ 12:14pm

Re: Re: Ugggh...
Does that mean that if the value of the original work declines, that I can ask for a refund from the artist?
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Howard, 7 Oct 2008 @ 12:15pm

works of art will have no value
In the past this type of tax has been bypassed by charging for the container, the contents are free. So would anyone like to buy the very expensive frame? It comes with this nice painting.
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MAtt, 7 Oct 2008 @ 12:15pm

Re:
and in its most general sense applies to works of "fine art" (whatever that means)

http://en.wikipedia.org/wiki/Fine_Arts

As opposed to industrial arts like drafting. At university one may obtain a Bachelor's or Master's in Fine Arts.
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Mike (profile), 7 Oct 2008 @ 12:25pm

Re:
There is something faintly ironic in reading a blog posting which mischaracterizes even a short newspaper story

Serge, let me explain how this works. If you believe I have stated something incorrectly, then rather than just declaring it, you actually are supposed to explain *what* I got wrong and *why* it is wrong, so that I can either correct the mistake, or respond if I believe you are wrong.

Otherwise, we will simply conclude that I have no mischaracterized it at all, but that you just don't like what I have said.

written by someone who toutes basic first-year microeconomics as revelation (prices tend towards marginal cost? rilly rilly?)

Actually, I have never (not once) suggested that this is a "revelation." In fact, I have pointed out, time and time again, that this is just applying very basic economics to the issue in order to explain it. You can also apply much more complicated higher level economics to the problem, but that's a separate issue.

But for you to accuse me of claiming that price tending towards marginal cost is a "revelation," is simply incorrect. I have repeatedly stated that this is fundamental basic 1st year econ.

who tops it off with the conclusion that the arts minister in question has show himself to be an economics illiterate.

Again, if you believe Garrett's scheme is economically sensible, you would then be asked to actually show why.

You have chosen not to, and instead just thrown (incorrect) insults towards me.

The obvious conclusion, unless you respond with more detail, is to conclude that you do not actually have a basis for your statements here.
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Anonymous Coward, 7 Oct 2008 @ 12:30pm

Another Welfare System
Ah, just another welfare system for those who are too impressed with their own creativity. I think the end result of this will be a lot fewer sales of "fine art," except on the black market. Just the introduction of this sort of welfare automatically reduces the value of any piece of fine art in Australia by 10%. Will the artists be handing back .5% of the original sale price?
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Vincent Clement, 7 Oct 2008 @ 12:32pm

Re: Economics of Art
Plenty of artists create work according to the laws of supply and demand.

Ever heard of commissioned works?

A person, organization or business wants a painting, sculpture, etc (aka demand). An artist offers to create the work for some fee (aka supply).

Supply and demand at work.
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ChurchHatesTucker (profile), 7 Oct 2008 @ 12:33pm

Re: works of art will have no value
"In the past this type of tax has been bypassed by charging for the container, the contents are free. So would anyone like to buy the very expensive frame? It comes with this nice painting."

OK, that's funny. But now that I think about it, I've seen others (usually musicians) do similar end-runs (Buy my ten dollar sticker, get this cd with uncleared samples for FREE!)
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Anonymous Coward, 7 Oct 2008 @ 12:34pm

Missing the point
Since none of this "fine art" is worth crap until the artist dies, who is the royalty going to be paid too?
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Vincent Clement, 7 Oct 2008 @ 12:42pm

Re: Missing the point
The estate silly. No different from current copyright law that extends beyond the life of the original content creator.
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jmzrbnsn, 7 Oct 2008 @ 12:51pm

Re:
And , yes, it's great to live in such a country!
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ChurchHatesTucker (profile), 7 Oct 2008 @ 12:51pm

Re: Economics of Art
"Many of these commenters assume that artists think like industrial capitalists in creating art ..."

Well, they're starting to.

"... and that art collectors consume paintings like pork bellies."

That part is spot-on for the big spenders.
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jmzrbnsn, 7 Oct 2008 @ 1:13pm

Re: Re:
that is ... "the left-wing party in a country where even the supposed conservatives are quite far to the left of the US Democrats."
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Dosquatch, 7 Oct 2008 @ 1:36pm

Re: Re: Missing the point
You'll understand if I'm not terribly supportive of laws making sure dead people get paid while I'm having trouble covering bills for living folks.

I find the entire concept of "royalty" repugnant. Do your job. Get paid. Bug off.
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Jesse, 7 Oct 2008 @ 2:34pm

I wanna get paid for work I did in the past too!

I am a lifeguard and I save lives. Perhaps I should get a percentage of a would-be drowner's income for every day after the day I saved their life. After all, they wouldn't be here if I hadn't saved them.
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Anonymous Coward, 7 Oct 2008 @ 3:23pm

I've just read this article, and most of the comments, and I can safely say that none of you dimwitted yanky dickheads have a clue.

Yes, I'm from Australia, and that is probably why I'm the only one here that seems to understand this law. Yes, it may seem stupid at first glance, but the idea is that creators of 'fine art' are entitled to royalties because their creations are 'one-off' and hence in the future, their name can assist with a sale.

Here's an example. I'm a painter (not really), and I create a painting that I sell at an art fair for say, $100 (quality of the painting aside). In 10 years I become the most famous painter in the world and someone sells that same photo for $1 million. The painting hasn't changed, but someone has just made a profit of $9,999,900 purely off my name. Is that fair? Would you like it if someone went around making large sums of money off your name?

Do you all get it now? Or is that too much for you gun toting hicks to understand?
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kiba, 7 Oct 2008 @ 3:35pm

Re:
So what?
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Lutomes, 7 Oct 2008 @ 3:45pm

Re:
Yes the $100 you got was fair. They made the profit off your name because they took the economic risk of outlaying $100 for your painting. You accepted the $100 at the time of sale, that was your side of the deal. If you thought you were going to get famous in the future you should tell the buyer that, and negotiated a higher price. You would have been laughed at, but thats how the business goes.
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Kiba, 7 Oct 2008 @ 3:47pm

Re:
Ok, I'll bite now.

Well, if you got famous, wouldn't it mean that your earning potential is higher now?

If there is a sale that generate headline, you might get more exposure? Maybe it is that royalty fee would actually lower the sale of artwork and thus less potential to earn in the future.

Not everything is a zero-sum game, yo!

In a way this sound like a lot like anti-gouging law or the minimum wage law in the USA.

Sound good and is intended to protect the average Joe Sixpack, but actually make the situation worse.

For example, I can't force employers who discriminate to pay a price for not hiring me through more expensive employees.

Or after hurricane, merchants can't raise price which will preserve gas and other essential supplies. If they do, they get punished and presumably their supply confiscated and stored in a government warehouse undistributed.
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Anonymous Coward, 7 Oct 2008 @ 4:06pm

I actually love this idea. Now I will be able to collect lots more money coming up with schemes to tranfer works of art other then by "selling" them. And I will be able to charge wealthy clients to conduct these transactions.
For example, Art work leases, with rights to sublet, for 100 years, or until certain contingencies occur, at which point the title vests in the lessee. However, since it has not been "sold."
Or "Art Trusts" which own a collection of works, and people bid on the right to display this art. And further transfers go through the trust, so that it is never actually sold.

Or Forieg trusts owned by austrialians to actually buy and sell the work.
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Anonymous Coward, 7 Oct 2008 @ 4:33pm

Re:
WORK FOR YOUR MONEY. Who cares if someone else makes money off your name? They got lucky. You want to get lucky? Play the lotto.
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Dosquatch, 7 Oct 2008 @ 4:52pm

Re:
I can safely say that none of you dimwitted yanky dickheads have a clue.

Damn straight. We don't let things like that stop us from talking, though...

I create a painting that I sell at an art fair for say, $100 (quality of the painting aside). In 10 years I become the most famous painter in the world and someone sells that same [painting] for $1 million. The painting hasn't changed, but someone has just made a profit of $9,999,900 purely off my name. Is that fair?

Hells yeah it is. You want to know why? That purchaser bought from you while you were "nobody". He presumably got a quality product for a fair price - roughly the same price he'd still pay some "anybody" for a similar quality work. That you have become a rockstar with an inflated ego in the meantime does not undo that original, fair, transaction.

You became a rockstar painter, incidentally, because folks like that original purchaser took enough of a liking to your work to buy it in the first place. Say he never spent that $100 and 10 years on you're still nobody, and somebody else got your rockstar shot from his hundred bucks. Is that fair to you? To the other artist?

Life is like that. You appreciate those early purchasers. It's called "knowing your roots". That grit is the essence of life, life is the essence of art.

And, presumably, in those 10 years, while becoming a rockstar, you've been selling subsequent paintings for ever-increasing sums of money. Your ego is being sufficiently compensated for your fame. There's just no justifiable reason to go back and mug your earliest fans.

Do you all get it now? Or is that too much for you gun toting hicks to understand?

Bang bang, baby!
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Dosquatch, 7 Oct 2008 @ 5:01pm

Re:
(sorry, I tried to resist, but I just can't)

I sell for $100

Yah...

someone sells that same for $1 million

Yah...

just made a profit of $9,999,900

Yah.... no. Really? Goddamn, I want in on that sale...

You know what they teach dimwitted yankee dickheads?

Math ;-D
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Anonymous Coward, 7 Oct 2008 @ 5:56pm

Re: Re:
Dosquatch -> You know what they teach dimwitted yankee dickheads?

Math ;-D

That's too funny !
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Anonymous Coward, 7 Oct 2008 @ 7:31pm

This will just encourage export
This will just encourage the sale of the artworks outside Australia.
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on its head, 7 Oct 2008 @ 7:58pm

Hey mate

Look at this way:

You sell a dude a painting for $100. Ten years later, He becomes a rockstar, celebrated the world over, while you are in the dumps, probably painting houses. Suddenly rockstar announces to the whole wide world your painting was the one that inspired him to write all those great songs that made him an icon. Would you go and demand your "fair share" of his profits?
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Mike (profile), 7 Oct 2008 @ 9:26pm

Re:
I've just read this article, and most of the comments, and I can safely say that none of you dimwitted yanky dickheads have a clue.

Rule # 1 when you have no argument: insult the people you're going to pretend to be smarter than.

Here's an example. I'm a painter (not really), and I create a painting that I sell at an art fair for say, $100 (quality of the painting aside).

Good for you. You made a deal for what you believed was the fair value of the paining at the time. The buyer took a risk that the price would increase.

In 10 years I become the most famous painter in the world and someone sells that same photo for $1 million.

Good for him. His risk paid off. What's the problem?

The painting hasn't changed, but someone has just made a profit of $9,999,900 purely off my name.

This is simply wrong. It wasn't *purely* off of your name. It was the RISK that the guy took on you in buying your painting in the first place. For all he knows it could have been worth $0 10 years later. At that point, if he came back and demanded his $100 from you, by your reasoning, you should give it to him.

Is that fair?

Indeed. It's quite fair. Those were all fair transactions, and as others noted, with such a sale, your new works must be in high demand so you should be able to sell them for much more as well -- and keep all those profits. It's win-win.

Would you like it if someone went around making large sums of money off your name?

Again, you ignore the other party here and the risk that he took on you. And you ignore the flip side, that the investment loses value.

Do you all get it now? Or is that too much for you gun toting hicks to understand?

I understand that you might want to learn some basic economics. Am I missing something else?
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LBD, 7 Oct 2008 @ 11:11pm

Re: Insulting us
Really, how is insulting us supposed to change our opinion you beer swigging Australian who tries to bring fists and a bad attitude to a shootout? I always bring a bulletproof vest and a gun to a shoot out.

Yes, that is 100% fair that they make such a large profit. You wouldn't have been famous if you had NOT sold the paintings that you sold at lower prices, and any painting you sell after getting famous will sell for a suitably inflated price.
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JPFife, 8 Oct 2008 @ 2:02am

God Bless the Aussies, they're going to create one hell of a cluster f*ck. If artists can get money from resales why can't authors, or musicians, or anyone else? Ye verily even unto me selling my house to someone and getting a cut when they sell it. You think other people and professions wont be looking at this and saying "me too"?

As has been pointed out games companies are already trying, and didn't a record company get kicked out of court recently for asking for something similar? I'm sure it was reported here on techdirt.
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Killer_Tofu (profile), 8 Oct 2008 @ 7:12am

Re:
I do recall a company getting smacked down for trying to prevent sale of its promo discs that some guy picked out of the trash.
Is that the one you are asking about?
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JPFife, 8 Oct 2008 @ 8:19am

Re: Re:
Yeah I think that was it. I recall that they tried to claim copyright on them, Mike had a link to something about reselling. Judge told them where to go.
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Ronald J Riley (profile), 8 Oct 2008 @ 3:06pm

How about this.
Lets say that I am a struggling artist (not really, because I do not have an artistic bone in my body).

How about I have a sales contract that says that for X number of years that I get 5% of the gain on any resales?

Now would that be acceptable to you (Mike)?

Now what is the difference between that and a law? Once a law is in place everyone buying art knows the terms going forward and it is reasonable to think that the market would take this into account.

Ronald J. Riley,

Speaking only on my own behalf.
Affiliations:
President - www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - www.InventorEd.org - RJR at InvEd.org
Senior Fellow - www.patentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (202) 318-1595 - 9 am to 9 pm EST.
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Mike (profile), 8 Oct 2008 @ 4:06pm

Re: How about this.
How about I have a sales contract that says that for X number of years that I get 5% of the gain on any resales?

That's a voluntary agreement between buyer and seller.

Now what is the difference between that and a law?

The law would forceably put that clause into everyone's contract. What if I, as an artist, don't want it? What if I, as an artist, recognize that it depresses the market for my art?

Once a law is in place everyone buying art knows the terms going forward and it is reasonable to think that the market would take this into account.

Yes, but in what way? It would depress and shrink the overall market for art by effectively adding a tax. So, your basic economics would make it quite clear that this is not an optimal solution, but a significantly suboptimal one. Of course people would take it into account, but in doing so they would be shrinking the market for art.
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Dosquatch, 8 Oct 2008 @ 4:10pm

Re: How about this.
Hey, there, slime. Welcome back.

Lets say that I am a struggling artist

Fine. Let's say that.

How about I have a sales contract that says that for X number of years that I get 5% of the gain on any resales? [...] Now what is the difference between that and a law?

The contract is negotiated. The law is compulsory. You already know that.

What compelling reason do you propose to offer during that contract negotiation that anybody should agree to that? Assuming I've paid a fair price for the work, why is it any business of yours at all what happens to it afterwards?
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b, 8 Oct 2008 @ 5:28pm

australia specific
agree that this is in general a stupid idea/law. however, the reason this has happened in australia probably has to do with indigenous artists, who are often payed very very little to produce dot paint works in compounds in the far north, with the art then going through several middle-men and ending up in a gallery for a quarter of a million dollars or whatever. has been quite a bit of media attention to this in australia. so the idea might be to get some of the enourmous profits for this kind of art back to the producers - as it is most of them see very little of it - being paid at the point of production with things like a second hand car for a bunch of works that get sold for the price of a couple of houses. this would be why it is directed at visual artists only.
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Bella, 8 Oct 2008 @ 6:09pm

if you want me to listen to you
Use correct grammar if you want me to listen to you.

It's "WHOM I saw in concert..." (object not subject.
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Dosquatch, 8 Oct 2008 @ 7:42pm

For "whom" the bell tolls
“Whom” has been dying an agonizing death for decades

Don't be a prat.
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Jimo, 9 Oct 2008 @ 7:21pm

resale royalty
Please get your facts right if you are going to comment. The Australian Parliament hasn't even considered the resale royalty bill yet let allow alone voted it into law. And this column is supposed to be from your legal expert!!? PS have a look at the outcome of resale royalty in the UK which shows it does work and the sky does not fall in. See
http://www.dacs.org.uk/index.php?m=7&s=7&c=64
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tiava, 10 Nov 2008 @ 5:47pm

it's fair!
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