Art Market

We Owe Artists the Crucial Income Resale Royalties Provide

Mark Waugh
Aug 8, 2018 9:15PM

There are diverse perspectives on the impact of artist resale rights on artists. To read an argument about how they hurt artists, click here. To read a proposal on a tech-savvy way to ensure artists get compensated as their work becomes more valuable, click here.

France in 1920: There was a quiet revolution for artists when the first proposals were made for droit de suite—a.k.a. the “right to follow,” a.k.a. the “resale right.” This was the right for the artist to maintain a stake in their works, and a share in any increasing value. No longer did artists have to burn their books to keep warm.

In the United Kingdom, after decades of debate, a similar law was passed in 2006, creating the Artist Resale Right (ARR) regime. At that time, London’s art market was ascendant. The fledgling Frieze Art Fair was disrupting the art world, leaving The Armory Show and the New York gallery scene looking like yesterday’s disco. Tino Sehgal had just staged a piece in 2003 that replaced booth-dwelling art dealers with children, and set them off discussing his work. These performances beguiled and horrified audiences with improvised impersonations of art gallerists. A clutch of galleries on Vyner Street were pulling the global collecting elite to Bethnal Green in deep East London. Nearby in Hoxton Square, Jay Jopling’s White Cube was dishing out beers and attracting paparazzi with the “sensation” generation of Young British Artists.

In other words, a lot was at stake by introducing a royalty on works sold on the secondary market. Those who opposed ARR feared that London’s swiftly growing art market would be damaged by such a right. But London galleries like Lisson Gallery and Victoria Miro were already voluntarily paying artists a share of secondary market sales based on the French droit de suite. They understood that the cultural capital of their artists deserved recognition.

More than a decade later, and where are we? Has the secondary market collapsed, or is it depressed? We monitor sales, so we know the answer to that! London is still flourishing, with international galleries joining homegrown dealers to service a global and growing group of collectors.

As British artist Jeremy Deller said on the 10th anniversary of the Artist Resale Right: “Whenever something like this starts, people say ‘it’s going to end the art world, it’s going to be terrible’ but it never happens. The art world just carries on and gets bigger and bigger.”

So what do we know about how ARR has worked in the decade-plus since it was introduced? As the largest body responsible for collecting royalties for visual artists in the U.K., we have data on its impact on the artists it serves. Our statistics show that it has enabled a wide range of artists to share in the increasing value of their work. It allows artists’ estates to continue to care for an artist’s legacy.

There is no evidence that these modest royalties negatively impact the art trade, nor drive sales away from the U.K. In fact, comparing the percentage of ARR royalties collected by DACS against post-war, contemporary, and modern art auction sales in the U.K. in 2014—a record year for the market—ARR was only 0.64%. This suggests that artists’ share of the lucre is not big enough to put a dent in the market’s performance.

It is worth noting that ARR, as it is administered in the U.K., has mechanisms in place to protect the interests of the art trade. Royalty rates are on a sliding scale, moving from 4% on works sold at €50,000 or less, down to 0.25% for works that exceed sale prices of €500,000. Moreover, there is a cap of €12,500 on a single sale. Despite these small percentages, the value to the artists and their heirs is significant and appreciated. To date, DACS has distributed over £65 million to more than 5,000 artists and artists’ estates. In 2017 alone, DACS distributed £10 million to 1,800 artists. This is much-needed cash for the creators upon whom the art market—of today and tomorrow—is based.

Does it depress the primary market? We believe it does not impact primary market pricing. Instead, it is far more likely that macroeconomic or political factors—such as the 2008 financial crisis, or the trade instability brought on by Brexit or U.S. President Donald Trump—will shake confidence in the market.

So who gets the royalties? In 2017, 57% of artists receiving ARR royalties had sold works in the lower price range of €1,000 to €3,000. It is fair to assume that much of the work in this category is by less-established and emerging artists. Furthermore, the data also shows that more than 50% of artists selling work in this price bracket are unique to this bracket, meaning that they only sell works in that price range.

“We know from surveying our members that for many visual artists, the capacity to earn from their work is diminished due to funding streams drying up,” notes Gilane Tawadros, chief executive of DACS. “In the last three years, 71% of artists exhibiting in publicly funded galleries in the U.K. received no fee for their work, and 57% of artists generate less than a quarter of their income through their art.”

Membership surveys also tell us that 81% of artists who received ARR royalties used the income to pay for living expenses; 73% for art materials; and 63% for studio space. For estates, 32% of them used it for cataloguing work; 25% for promoting the artist; and 22% for general administration of the estate. Resale rights generate much-needed income as part of a wider portfolio of revenue sources that help artists and estates sustain their practice and legacy.

But don’t just take it from me. Hear it from artists themselves:

“For me, the reason why Artist’s Resale Right is something I really value is because it puts me back in contact with pieces of work. It’s like a tracking system, and that’s really useful to see how my work is moving in the marketplace…and obviously the money helps, as well.” — Gavin Turk

“I like the fact that [they] provide me with a little statement, so that I can keep track of the royalties I get. That’s so useful because, as an artist, unless you spend your life Googling things, you wouldn’t know what sells on the secondary market at all.” — Chantal Joffe

Mark Waugh
Mark Waugh is the Director of Business Development at DACS.