Artist’s Resale Rights, often known by the French term droit de suite, is a provision for artists or their heirs to earn a percentage of the resale value of a work sold on the secondary market. This means that artists essentially earn royalties, in line with other creative professionals like actors, authors and musicians, though because there is often a physical object exchanged Artist’s Resale Rights are not universally acknowledged. It is legislated in the EU, for instance, but a similar law didn’t get past congress in the United States. With a growing secondary market in South Africa and a maturing industry in need of support, Artist’s Resale Rights seem like a logical step. While there isn’t any legislation covering ARR in South Africa, local auction house Aspire has implemented a version for their own auctions. We chatted to them about the benefits and challenges of their approach.
ArtThrob: What do you see as the benefits to the industry of resale rights? And if there is a benefit why is there no legislation covering it in South Africa?
Aspire Art Auctions: The resale right is fundamentally a contribution to the sustainability project. All the founding directors of Aspire studied art and remain committed to the arts and artists. There are few living artists with incomes sufficient for sustainable living purely from their art: to meet mortgage payments, to put children through school, or even to buy materials for more ambitious projects. We have seen first-hand the difficulty artists have in maintaining consistent revenue streams, especially when exhibitions only come along every couple of years. Consequently, what we have seen happen is that artists are forced to diversify their incomes, to go into advertising, the film industry, teaching etc. and ultimately, they create less art, or stop completely. The net result is that our arts community becomes poorer. In a country that is consistently producing some of the top art and artists in the world, it would be a tragic loss for the community at large, should we not develop ways to ensure that we sustain the incredible talent that we continue to produce. This is compounded by the fact that an artist’s value often increases over time, largely by virtue of their committed efforts to the promotion and development of their own careers, yet when their work starts to sell for significant sums, they usually don’t benefit.
I believe there has been talk of legislating ARR locally for some time, but the bill has still not been passed through parliament. Joseph Gaylard, who was very involved at one point, may be best to ask about this.
AT: With our limited secondary market in South Africa, do you think resale rights would have an industry-wide impact?
AAA: The secondary market in South Africa is growing steadily. There are two new auction houses that have been established in the past year, and some of the bigger houses tout how they are individually responsible for over R200 million in revenue per annum. The combined value of the secondary market surely must be worth over half a billion rand. Consequently, if there was buy-in from all the secondary market entities in SA, the revenue that could be generated could be noteworthy.
The European system is costed as follows:
- From 0 to €50 000 @ 4%
- From €50 000.01 to €200 000 @3%
- From €200 000.01 to €350 000 @1%
- From €350 000.01 to €500 000 @0.5%
- Exceeding €500 000 @0.25%
It could be implemented locally at the same rate in Rands. One must understand that the ARR does not imply huge sums that will be regularly due to artists, or that artists will be able to work less and be more prosperous than previously. Based on the above calculations, the ARR generated from R300,000 worth of sales would be R7,500. It is a contribution to their incomes. If there was buy-in from the whole community however, it could be sufficient to cover the cost of studio rental, or contribute to a mortgage, or help keep a child in school.
AT: Why as an auction house are you taking the lead in promoting resale rights? Especially considering that auction houses in the States have been actively lobbying against similar rights there. Related to this, if you are absorbing the costs directly, unlike the European model where the cost is split between the buyer and the seller, how does this make financial sense for you?
AAA: This is about our continuing commitment to the sustainability and promotion of the arts. In the absence of legislation, we are covering the cost ourselves, and it is something that we have had to factor into the budget to manage the extra cost. As we develop this model that we believe will ultimately work within the industry, and account for the cost in our budget projections, we are achieving something infinitely more significant for the industry. From a financial point of view, it is a forward-looking policy that ensures the continuation of the market. It means that as a secondary market vendor, we will continue to have great art to promote and sell, and a sustained (and growing) market of producers and collectors with which to engage in future.
AT: I read in the Financial Times, that auction houses in the UK considered Resale Rights a factor in a recent slump in the art market (I presume because the cost is passed onto the buyer and seller, making sales less profitable in the UK). Do you think there is any validity in this?
AAA: My understanding of the UK system is that the cost of the ARR is split between the auction house and the buyer. Our policy is different in that we are carrying the full cost ourselves, so it is something that needs to be worked into the budget at the outset. In the absence of any legislation or a neutral NPO body that manages collecting and redistributing the funds, we also need to do this ourselves. It has been more labour intensive than expected as we consequently need to correspond with each individual artist and ask them to supply us with an invoice so that we can pay them their ARR as, from an accounting point of view, one cannot pay monies out of a business without an invoice or some form of paper trail to account for it.
I am not sure what the effect of the ARR on UK houses is, but they function in an economy significantly different from ours, it is much wealthier, more inclusive and more advanced. From an Africanist point of view, we believe it is imperative to distribute wealth more equitably and ethically.
AT: Having a couple of auctions under your belt now, what has been the response from artists, buyers and sellers to resale rights?
AAA: We have had unanimously positive feedback from artists and most buyers and sellers. To our surprise, there was a little negative feedback from buyers who felt the ARR to be an unjustified cost as the artists were paid for their work the first time and, consequently, should not be entitled to any further revenue generated from the same work as, once sold, they no longer have ownership over the work. We have managed to mitigate this negativity by explaining that it is no extra cost to buyers, though the sentiment has remained in some instances. Though this is not a position which we share, it is something with which we need to contend to achieve the broad acceptance of the policy and the buy-in from the greater community.
There has been international interest in our introduction of ARR. The World Intellectual Property Organization invited Emma Bedford to its international conference to discuss the droit de suite of visual artists on April 28 in Geneva, Switzerland. A number of WIPO member states have asked to put this on the agenda of WIPO’s work to make sure artists in the visual arts field all over the world have the ability to obtain a small percentage of remuneration when their works are resold. There has been great interest to learn that in South Africa, Aspire Art Auctions is already paying royalties to artists for the resale of their works. So, it seems we are being seen as a global leader in this regard.
All images taken from the catalogue of Aspire’s Cape Town Auction