US Copyright Office Supports Artists Getting Paid Multiple Times For Same Work, Harming New Artists To Benefit Established Ones
from the shameful dept
We've written a few times about the absolute ridiculousness of the idea of an artist resale right, also known as "droit de suite." The basic concept is as follows: an artist sells a piece of artwork, such as a painting. Then, when the buyer later sells that painting to someone else, a percentage of the price has to be given back to the original artist. So, every time that painting is resold, there's a tax on it that goes back to the original artist. A few countries have done this, and it's basic economic illiteracy that drives this idea forward.Here's the basic theory behind it (which is wrong, as we'll explain after). When an artist is new, they're not well-known, and people are not willing to pay very high prices for their works. So, people buy them up for very low prices. However, as that artist becomes more well established and successful, the price of their older works increases (sometimes significantly) as well. And the buyers who purchased their original works for very little money, can now resell them to others for very large sums -- and the original artist gets none of that. Thus, by adding an "artist resale royalty," it guarantees that an artist later benefits from the appreciation in price of his or her earlier works.
Now, here's why that theory is complete bunk -- and such resale rights are actually more harm than good for artists. First off, this punishes the early risk-taking buyers who are willing to buy the artwork of no name artists, by making it clear that they are going to have an extra tax (the royalty they need to pay back to the artist) on any future sales of the work. Like any tax, this decreases the amount they're willing to pay initially, as well as the amount of the activity they're willing to engage in. So, at a time when artists need those sales the most -- when they're just starting out -- an artist resale royalty drives down the demand for their works by deliberately making their artwork a worse investment. Furthermore, this depreciating impact carries through on all future purchases as well. It's braindead and harms those artists who need the sales the most.
But, people will ask, what about those "poor" artists who see their early works, which they sold for hundreds, now selling for millions. Isn't that unfair? Well, not really. First, if their early works are selling for millions, you can bet that there's a pretty big market for any new works as well. And, now, when they do create a new work, they can take it to market directly themselves, and get that same huge return. This is a good thing, as it also encourages new works by those artists.
Also, as a point of comparison, I would imagine that no artist would ever accept the idea that if a buyer later resells their artwork for a loss that the artist should then pay the original buyer for the failure of the artwork to appreciate. But if you think a resale royalty makes sense, why wouldn't the same be true if the artwork declines in price?
In the end, implementing an artist resale royalty significantly harms the market for new and struggling artists, making it a worse investment to buy their works. Instead, it diverts significant money in the artworld to already successful artists, and gives those artists fewer reasons to create new artwork, since they're able to profit off of ongoing sales of their years old works. On top of that, it's just generally insulting to the basic concept of ownership, and the fact that when you sell something, you no longer own it.
Still, some of those big name artists have been lobbying hard to change the laws around the globe in favor this very stupid concept. They have a group called the Artists Rights' Society, and hired Bruce Lehman to be their main lobbyist. If you don't recognize the name, Lehman is the guy behind the DMCA, who has long been a massive maximalist in all forms of intellectual property -- and he's not ashamed to admit it, or to attack those who point out that maximalism has downsides. For example, he once threatened to rip out Prof. James Boyle's throat, after Boyle pointed out the dangers of the DMCA, and then said that he would make sure that Boyle was denied tenure.
Unfortunately, Lehman is still a voice that people in the Copyright Office listen to, and last year he was successful in convincing the Copyright Office to revisit the issue of resale royalties. The Copyright Office has now come out with its report on the matter, and despite having rejected the concept in 1992, is now much more supportive of the idea. They do this, even while recognizing the negative impact as described above:
It does appear that most of the direct benefits created by resale royalty schemes inure to artists at the higher end of the income spectrum. “Researchers are virtually unanimous” that the “distribution of payments under an ARR regime is greatly skewed” in favor of a minority of established, blue-chip artists.But they immediately dismiss this, by noting that this is no different than our existing copyright system for authors and musicians. Of course, rather than recognizing that this is a problem of the current copyright system, the report seems to assume that this means the fact that the system unfairly benefits those at the top at the expense of those at the bottom, that it's a perfectly fine system. The report does an awful lot of "on the one hand/on the other hand" statements, before noting that either the data has been inconclusive, or pointing to more general evidence that places with a resale royalty that haven't seen their markets collapse is somehow evidence that the downsides might not be so bad.
In the end, the report "supports Congress's consideration of such legislation" (meaning that such legislation will show up very soon -- as you can bet it's all ready to go, likely written by Lehman, and sitting in a drawer somewhere in the Capitol). The report does say that there may be other ways to "accomplish these goals" which may be more effective than legislation, but you can bet that line will quickly be ignored by the politicians and lobbyists supporting this plan.
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Filed Under: copyright, doit de suite, resale royaltes, us copyright office, visual arts
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Luckily IP logic is still confined to a very small and disposable sector and there's plenty of artistic life out of it.
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Calling All Tradesmen
How about using "Hollywood" accounting/residuals model? Then you could get paid every time the lights turn on...or the lock unlocks...or the water runs...
I bet we can NOT come up with something more insane than the government does...
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I know you're joking, but sadly that exists.
http://www.nytimes.com/2010/09/12/business/12fees.html?pagewanted=all&_r=0
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It's always PLUTOCRATS who get to profit in Mike's "economics".
Robert Reich has a good related piece -- except for a loony exception for Bill Gates -- on how "charity" actually works for The Rich: they get to fund their elitist entertainments not open to the rabble AND write it off on taxes TOO.
"The generosity of the super-rich is sometimes proffered as evidence they�re contributing as much to the nation�s well-being as they did decades ago when they paid a much larger share of their earnings in taxes. Think again."
http://robertreich.org/post/69833627613
Anyhoo, isn't it remarkable how Mike ALWAYS has a view that what's best for plutocrats is best for all?
Economics is the non-science of telling fantasies to flatter plutocrats by omitting the real effects on laborers. It's an easy degree path for the lazy but well-off, requiring skill only at unctuous re-writing.
06:05:20[h-26-2]
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Re: It's always PLUTOCRATS who get to profit in Mike's "economics".
Me neither.
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Re: It's always PLUTOCRATS who get to profit in Mike's "economics".
You're definitely not right in the head...
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Re: Re: It's always PLUTOCRATS who get to profit in Mike's "economics".
You have an astute grasp of the obvious. ;)
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Re: Re: It's always PLUTOCRATS who get to profit in Mike's "economics".
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The desire for money is the root of all evil, as the more they have the they you want.
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If someone wants something, like a lamborghini, and they work hard (or make smart investments) to get it, who am I to say they are greedy? Frankly, most people who claim others are suffering from Greed are themselves suffering from Envy.
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yeah, it is evil, due to the lengths people will go to secure money.
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The mark of greed isn't buying expensive things. The mark of greed is when you don't care who you hurt in your quest to accumulate wealth.
I haven't noticed this at all. What I've noticed is that the people who get hurt by greed are the ones who decry greed. They are not envious at all. They are justifiably angry.
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AMEN
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If I create something new for my employer that benefits him/company, deep down I feel I deserve more. With laws like this on the books I can dream that they will expand this so that everyone who does something that gains in value deserves to get more.
Of course with this future amazing income just waiting to be claimed, I no longer need to work hard because I can collect as others use my idea in the future.
Huh... isn't this how Congress currently works?
Congresscritter does something that benefits a corporation and in the future they can count on getting the benefits of that from the corporation.
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This has nothing to do with the recording industry/RIAA/MPAA, etc.
When old work resells for a lot, the price of new work goes up, too.
If you work between distinct styles throughout your career, hold back a piece or two from each style, so when they take off, you can take the unsold old work straight to an auction house and cash in.
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Some artists, no matter the medium, believe that because they created something once they should be paid forever for that creation. That the IP laws should make sure there is income for their entire lifetime (and often passed down in the family) forever.
Laws like this show a spread of the idea that content should create income forever + 70 years.
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Should I be paid every day for the rest of my life by someone that I saved for that one moment of work?
Saving lives is much more important and critical to a prosperous community than a piece of artwork will ever be, yet I get paid to do my job once, but an artist wants to be paid for all eternity.
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Any benefits to creators brought about by copyright law is incidental, being the method, not the goal of copyright law, which is to enrich and benefit the public.
Copyright was never meant to be an inheritance/welfare system, where the descendants of a creator were given the same abilities and 'rights' to control the work as the original creator had, and the only reason it's that way now is because laws were bought and paid for to make it so, purely for the benefit of companies and corporations.
Looked at another way...
An architect doesn't get to decide what happens to the building he's designed once he's sold the design.
A builder doesn't get to decide who gets to use the building he made once he's sold it.
A car maker doesn't get to decide who gets to buy their car and what they can do with it once the initial sale has been made.
Why exactly does your particular field of creativity deserve so much extra protection, protection that comes at the cost of the rights of the public?
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there's nothing wrong with wanting to pass a creative work to your children. It's the monopoly on copying or sharing it that's now considered to be more valuable, which, in essence, devalues the work's intrinsic value by commodifying what ought to be a cultural artifact.
All of this is being done to make lawyers and lobbyists richer while the rest of us suffer. The stupidity is intense: I recently had a stand-up argument with a man who said that copyright should endure through the generations in perpetuum. Uh, no. The point is to foster creativity, not to permit a creator and his estate to live off ONE WORK for all eternity.
Okay, I'll bite: where's the incentive to create if you only have to do something once and live on it forever?
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However, treating your potential customers like criminals and insulting them then you get what you deserve!
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If the artist wants to rip me off, why should I have any qualms about doing the same thing?
DRM treats all customers like criminals. DRM is closer to a criminal act than copyright infringement as it removes my rights to a legal back up copy of what I have purchased.
It is typical of copyright maximalists, they want to change the deal in only one direction. (and in case you can not work it out, it is never in the direction that would benefit the public. You know, the ones that Copyright is meant to benefit.
What was the last thing that entered the public domain?
When will the next thing go into the public domain?
How long will Disney get to extend copyright this time when Mickey Mouse is about to enter the Public domain?
If you want to talk morals, I think the copyright maximalists need to look at their past, and how they have changed the agreed upon deal with bribes and corruption.
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A digital download and CD seems to work for everyone else, I suppose you need a special format?
You suggest that 99 cents to $1.29 per single is a rip-off? Or perhaps 16 songs for $13.49? 84 cents per song..or 14 songs for $5.99, 42 cents a song. Still a rip off right? These are actual prices. When you are arguing you can't pay 42 cents per song, I can't take the argument seriously. Something you can have for the rest of you life and actually give to your children, as my father gave his record collection to me.
"If the artist wants to rip me off, why should I have any qualms about doing the same thing?"
If you feel a song is not worth 42 cents, your alternative is to take it for free? I love this argument. Because in your mind you are getting "ripped off," so you are justified and entitled to have it for free. I love the logic. This is rich. Only in copyright will you hear this argument.
"DRM treats all customers like criminals. DRM is closer to a criminal act than copyright infringement as it removes my rights to a legal back up copy of what I have purchased."
As if someone has EVER come to you house and said "you have made more than one back up copy of the music you have purchased, you must pay! you are in trouble!" The argument of ghost enforcement.
Somehow invariably Disney gets mentioned, for what reason I have no idea. As if we are all waiting around to use images of Mickey Mouse and Donald Duck. If only Snow White was in the public domain, then society would be free of tyranny.... Then talks of bribes and corruption.
However you want to justify fighting the "system" by not paying for things you want is entirely up to you. Just realize there are plenty of people that would rather support an artist a PAY for what they create.
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This makes no rational sense, but it is programmed by the way that humanity thinks (See also, "The grass is always greener on the other side" fallacy.) Personally, I would strongly prefer it if culture wasn't being locked up for three generations' worth of humanity, but hey.
Disney gets mentioned a lot in these discussions partly because they are the biggest and most egregious culprits of the issues surrounding the entitlement corporate culture in entertainment industries.
Anyway, I'd also like to thank you for your reasoned discussions here, even if I don't agree with your fundamental principles.
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Go to Kickass Torrents and you find any movie, song or book you like, the search for it is easy, the interface is great, there are no DRM, there are no limitations of what you could do with it, there are no "sorry, this content can't be viewed in your region", there are no hidden surcharges, there are no menacing warnings about what they will do to do you if you don't follow their rules, there are no unskipable ads anywhere, there is no phoning home telling some company what you are watching, when, with whom and for how long and so on.
I can't take your arguments seriously when you don't acknowledge that others too have valid complaints.
It goes beyond $0.42 cents.
Hundred years of monopoly who gets that anywhere?
Absurd moral rights, bad statutory damages that punish the small much more than it punishes the big ones, laws that can be used to censor and create an enviroment of frustration for everyone who ever has to deal with an self centered artist that knows nothing about how the actual law is written but it got powers and they use those against the public and you want people to respect those people?
It is not going to happen.
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While I don't agree with you on the pirating angle(there's more than enough entertainment available, legally, on my terms for me to ever need to do so), the other issues regarding DRM, geo-locking, and the other insane and stupid limitations on what is advertised as a 'purchase' are certainly valid complaints, though personally I think if you want to drive home how much that crap hurts the consumers, and the sellers after then, vote with your wallet, and go for sources of entertainment that don't treat their customers like criminals, while just ignoring the ones that do.
Do that long enough, giving money to the ones who treat their customers right while ignoring the ones that treat their customers like crap, and eventually the second group will either smarten up, or go out of business, solving the problem.
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I am not sure how you can tell me what the market expects to pay, but for arguments sake, If you would like to stream music there is a service called Rhapsody where you pay $10 a month and have unlimited streaming. That drops the price per song down below your price, regardless where you got that figure.
"Go to Kickass Torrents and you find any movie, song or book you like, the search for it is easy, the interface is great, there are no DRM, there are no limitations of what you could do with it."
I think this is a very weak argument. Go to a torrent site get it for free and they don't limit what you can do with it? Imagine that. They don't create the content nor have any of the costs associated with producing it. I find this line of thinking refuses to acknowledge content cost money to make.
"there is no phoning home telling some company what you are watching, when, with whom and for how long and so on."
I have never had to do this when watching a movie and I am sure neither have you.
"I can't take your arguments seriously when you don't acknowledge that others too have valid complaints."
Many of the complaints are valid but to "rip-off" the creator of content by not paying ANYTHING is not the solution. My responses came from this initial statement
"Another reason to only collect music you don't pay for"
As I said already, however you want to justify getting something for nothing is entirely up to you. No, not everyone is doing it. To imply that you are speaking for the people when getting content for free is beyond hubris. Sure, the statutory damages are outrageous if applied to an individual but that was not their intent. They were designed to dissuade businesses from participating in these types of activities. Let us not forget the purpose of fines. Just like when breaking any other law they are meant to punish and deter conduct.
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Nah, I just use Youtube, is free.
Irrelevant, pirates show cased a fully working platform that embodies everything consumers want and the fact that so many people gravitate to it is doesn't bold well to contrary opinions, it doesn't matter if they produce anything, they will destroy any other different business model that doesn't follow that template.
Morality should not be counted here, it doesn't matter if it did everybody would be justified to rip off producers because they shamessly rip off consumers all the time just because they can. Further there are ways to compete with "free" if there was not, there wouldn't be a Netflix, Youtube or any of the other dozen platforms that actually do it everyday see TV is free how they compete?
I never had because I block all Bluray access to the network, do you?
BD Live 2.0
Wikipedia: BD-J
UltraViolet
I am pretty sure that you probably have already given up very sensitive information without realizing it.
My counter argument is that people are more than willing to pay for it under a set of conditions that some creators don't want to accept and those will be ripped off, which in some conditions is actually helpful to the creator or copyright holder, there are multi millionaire book writers that make all that money despite "pirates" which actually help them enlarge their own markets, piracy may be bad for very big schemes where the only way is not up anymore but down.
And finally show me how many content creators you know have gone banckrupt because of pirates, you be hard pressed to find a lot of those. Last I checked book writers still make millions, the movie industry is having the profits of their lifes and the music industry is rebounding from their self inflicted wound which they called "educational campaign against piracy".
The hubris is from the people that believe others are stupid and can't see what is happening, those laws have been modified a dozen times already and every time those shitty rules get upped a bit more. Sure if you want to dissuade anybody based on financial pain why not use a percentage of raw income? it would be equal to everyone , rich or poor, the pain would be the same.
Now what happens when everyone and their dogs ignore the law? that is what happened to copyright, is not a law that anybody can take it seriously as it is written today, it doesn't reflect our times, it doesn't reflect social beliefs or behavior and it can't even be enforced, because if it was the public would quickly get loud.
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That picture there summarizes what is so annoying about a great number of "artists".
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Nonsense. When I buy a house, any lock on the door is mine, as are the keys. I control them, rather than them controlling me.
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What is the resale value of that 42 cent track? Should I be able to resell what I have purchased?
Or if you want to state that it is only a licence, name one other industry where Licences/contracts are not transferrable?
Or are you stating that copyrights should not be transferrable and should ALWAYS stay with the artist and they are not allowed to sell them?
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Peter & Paul
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Great model for other Industries, too!
Fuel stations, parking lots, road builder, traffic cops - without cars, they could not exist. It is only fair for them to pay part of their income back to the car industry.
Or banks - a single cent 'gratitude tax' back to Goldman Sachs every time a dollar is spent might even prevent the next banking crisis. Small price to pay!
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So, Mike. Do you have any actual data that shows that the costs exceed the benefits? Or are you just making up FUD?
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I think that's the point being made. It's just some theories about incentives with no data to actually back them up and no explanation how apples are compared to oranges. It's the same sort of lack of data the author often calls out others for.
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How hard would you work to hide any profits if you knew half of would be taken from you?
Lately the only people paying any taxes are the ones that don't have access to an accountant.
Why do an artist after fair conditions sold the products of his work should get any more benefits?
Does anybody else in society have those kind of privileges?
Does a home builder has the right to go after others and ask for a percentage of all future sales of that home?
I don't understand why "artists" should have any privilege that others don't.
How much should construction firms have to pay for the work of art they incorporate into their constructions?
If a building is the work of an artist how much would he receive for each unit sold or negotiated?
Would a home owner pay a tax to an artist? or rip the art from its walls, garden or whatever it is in?
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Since you're clearly a fan of this idea, do you have any actual data that shows that the benefits exceed the costs?
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disagree with premise in this regard:
contrary to their assertion: OF COURSE i am MORE willing to pay more for a new artist in several ways...
i have bought music CD's that cost more than 'normal' ones, 'cause they were a small time group that didn't have normal distribution methods, such that i *couldn't* buy it off amazon or iturds, whatever... (in the one case, indigenous group from south america)
further, realize that there are -*THEORETICALLY*- economies of scale and mass manufacturer such that a CD from BigMusicCo is cheaper than one from Local Band burning a couple dozen at a time, etc...
same thing with their tee shirts, etc (and same goes for TechDirt and other sites i may like): i can get a dog damn decent tee shirt for 5-10 bucks at sweatshopmart; BUT, i'll pay 20-25+ for ones which support bands/sites/issues that i care about...
similarly for other 'arty'/artisanal products SWMBO/i buy: bath soap we could get for 50 cents a bar at the grocery store, we pay $5 a bar for handmade, naturally scented, shea butter, blah blah blah ones...
in short: we are 'fans', we gladly pay the difference for real and perceived benefits; and part of that is, we GLADLY support local artisans at a premium cost over transnational korporations...
etc
etc
etc
their premise is bassackwards to start with, the 'reasoning' that follows, is therefore fatally flawed...
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All of the actual CDs I buy anymore are those home-burnt ones directly from the band after their shows, and in every case so far, they are being sold for less than a commercial CD.
I've noticed that because I keep thinking that they're underpricing their work. I would happily pay more than the average rate to support a non-RIAA band whose music I enjoy.
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In this town, they typically ask for $10 for CD as described. I find I generally pay $15-20 if I am purchasing at all. I don't mind paying that price when I know they are getting 100% of that money.
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Can Ford get in on this action?
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I believe people didn't like that at all.
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If you sell ANYTHING for $5 - a washing machine, a toaster, a car, a jewel, a phone - only to have the person who you sold it to sell it on themselves for much, much more than you did, that is no excuse to have the deal "reversed" in any way. Even if you think there should be a slimy compromise in the form of tax, you can only morally say that that tax must be at a level of at least 99% in order to mean anything, which is ridiculous. Nasty "deals" like this happen all the time, everywhere. And there is no cure for it. As much as I find the "Cash in the Attic" shows tedious to watch, I wouldn't dream of stooping to such a level as a means of offensive.
I have to ask: what on Earth makes copyright advocates think they deserve special privilege, and insist they be the exception to the rule? Especially considering how this isn't even strictly a copyright issue, but a game-theory issue? The buyer is following every copyright law in the book, but that is not enough?
How would websites like eBay, Amazon, play.com, Google, the fucking Post Office, all be able to function if any value they bring to the market is treated like theft? They do after all profit in the scale of "millions" from pre-owned swapping just as much as any other "leech". It's blatant Rights-Management without the Digital, futile, and massively delusional.
If you want to devalue the painting beyond the buyer's control, make more fucking copies of it, and get the scarce funds which will most likely be close to the same price as the original. You're the only one with the authorisation to do so, right?
Or better yet, in fact the BEST way to devalue it and obtain your rewards, is to abolish copyright, because then the paintings stop becoming important economically and your ability to paint is the only thing worth any monetisation, as well as your official signature.
It's unbelievable how disconnected these people are.
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Destroy it
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Artist resale rights would pretty much guarantee that I'd never buy another piece of art. Why would I buy something when I can't actually own it?
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Re: Destroy it
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Australia leads the way...not
http://www.resaleroyalty.org.au/default.aspx
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Next its used cars or houses and after that? Food?
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I can see that if this resale rights does pass then the US will do everything they can to get every country to enforce that they have same resale rights all in order to ensure that the MAFFIA does not lose out on receving money.
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What about other investments?
This is a tax levied by non-government agents and is probably the worst idea I've heard all year.
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I wonder...
Record music and you owe royalties to whoever you bought your blank CDs from? Paint a picture and you owe a royalty to the paint company when you sell that painting...and every time you collect a resale royalty on it?
Does the paint company owe royalties to the chemical wholesaler they bought their raw materials from?
Where does it end?
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Why not apply this to everything?
But why stop at artwork? Why can't law apply to any product that goes up in price? If I own a house, sell it for $70,000, but then the next buyer sells it for $100,000, should I get a cut of that? How about the buyer after that? Can I get a cut from every buyer who's ever lived in any house that I've owned?
Who's going to maintain this kind of paper trail to make sure everyone is paid what they owed? Will all 10 previous owners of a house show up at closing to get their cut? What will this do to the price of goods if every person gets a cut of the sale? What will this do to society- will it create an entire class of people who do nothing but collect royalties on things they've owned in the past?
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How to Make Millions From Your Mistakes
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. The report is no ringing endorsement of Artists resale royalties, at all. The actual report is more of an options brief than a directive.
While the reports conclusions do find that on available information, adoption of a resale royalty right would not cause substantial harm to the U.S. art market , the report then immediately goes on to state that:
"...As to the second issue-the likely benefit to U.S. artists � the evidence is less obvious.
"Accordingly, while the Copyright Office finds no significant legal or policy impediments to adoption of a U.S. resale royalty,and indeed supports consideration of a resale royalty right as one option to address the historic imbalance in the treatment of visual artists, it is less persuaded that such legislation represents the best or only
solution."[emphasis mine]
And under the heading Benefits to Artists the report acknowledges that:
"........ On the whole, it does appear that �a minority of artists reap the lion�s share of financial rewards,� and that the class of beneficiaries is skewed toward higher-income artists.438 In the 1992 Report, the Office cited
�evidence that as few as one percent of artists will qualify for the royalty,�439 and opponents point to a subsequent study finding that �only approximately 0.15 percent of U.S. artists have works that have resold for $1,000 or more.�440
And from the conclusion of the Reports analysis of the legislated ARR option :
".....It remains unclear, however, whether these
benefits would offset the potential countervailing costs cited by opponents, such as enforcement and administrative burdens, among others."
"As such, the Copyright Office would need greater information � for example, survey information from a significant nucleus of American artists, their heirs, or estates � in order to recommend a statutory resale royalty as the only solution to the burdens faced by visual artists.
We note, however, that at the time of this report�s publication, at least two resale royalty jurisdictions � the EU and Australia � are in the process of completing updated analyses of the effectiveness of their own resale royalty schemes.449 Congress may wish to forego legislative
action pending the release of those studies, which may fill in some of the information gaps noted here."
"At the same time, the recent and ongoing evolution of the visual art market may well counsel against a permanent legislative solution. As the market expands, both in popular appeal and in the creation of art forms that are more suitable to production in a meaningful number of copies or multiples, more artists may see benefits under the existing law. Still, Congress could pursue other safeguards, including voluntary initiatives and/or best practices.450 Alternatively, Congress could revisit one or more of the legislative proposals raised in the 1992 Report. We briefly consider some of these options below." (emphasis mine)
Australia's Art resale royalty scheme has been a complete debacle and is very unlikely to survive the review currently being conducted by the Australian government.
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