Transcript: Royalties For Art Resale Adds to Copyright Debate

Listen to Podcast Download Transcript PDF

Interview with Bill Rosenblatt
GiantSteps Media Technology Strategies

For podcast release Monday, April 20, 2014

KENNEALLY: As often noted, the Internet is a runaway copying machine. Digital technologies make it possible to reproduce any work of media – art and illustration, photography, music, text, video, and film – with the copies indistinguishable from the original. There may be only one Mona Lisa in the Louvre. But online, there are millions of the bemused beauty.

Welcome to Copyright Clearance Center’s podcast series. My name is Christopher Kenneally for Beyond the Book. In March, US Senators Tammy Baldwin and Ed Markey and Congressman Jerrold Nadler introduced legislation they call the American Royalties Too Act of 2014, or the ART Act, as it’s known, which would provide for a controversial resale royalty in the US art market.

Painter Frank Stella has praised the effort, saying that today, any benefits derived from appreciation in the later sale of artists’ works never accrue to the artist, but only entirely to collectors, auction houses, and galleries. Detractors say the cost and the work related to collecting any such royalties would drive auction houses and art dealers from doing business in the US.

In this age of media abundance, copyright and digital media authority Bill Rosenblatt wonders whether the resale royalty is a wise way for artists and the art world to cope with change. He joins me now in his Manhattan office. Welcome back to Beyond the Book, Bill Rosenblatt.

ROSENBLATT: Thanks, Chris. It’s always a pleasure to be here.

KENNEALLY: We’re happy to be with you here in New York City. I guess we’ll start by asking you to tell us about this particular piece of legislation which just came to the floor in Congress. It is supposedly, according to the press release, to level the playing field for American visual artists. What is it trying to do?

ROSENBLATT: In various other countries, notably the UK and the rest of Europe, whenever an artist’s work gets resold, they get a royalty. Of course, it varies from one country to another. In America, when an artist creates a painting or a sculpture, something like that, they sell it to a first buyer, and then any additional sale, they don’t get a piece of.

Under copyright law, there’s something called first sale, which says that if you a buy a book or a DVD or anything like that, the publisher of that work no longer has any claim, financial or otherwise. They can’t get a piece of your reselling it on eBay or whatever. If you want to lend it, or give it away, or throw it away, that’s entirely your affair.

KENNEALLY: Most people would be familiar with the used book market in the college space. Their textbooks are often used textbooks.

ROSENBLATT: Yeah, absolutely. That’s the bane of the existence of higher ed publishers, the fact that they have no control over this used textbook market, at least in print.

KENNEALLY: But there is no such used art market. Or I suppose there is, but it just doesn’t have any benefit for the artists themselves.

ROSENBLATT: On the contrary, there’s a huge resale market for art. The artists in this country don’t benefit from that, so artists got together and pushed for this legislation to be passed. One interesting thing to note is that Congressman Nadler, in whose district we are sitting at the moment, is from New York, and that’s where a lot of artists are. That’s part of his constituency.

KENNEALLY: It’s also where a lot of art galleries and auction houses are, as well. One of the old arguments against all this was that the work done to collect these kinds of royalties, the fees, and so forth, would drive art galleries and auction houses out of business or would keep them from doing business. But from what I understand, that argument doesn’t hold too much water these days.

ROSENBLATT: First of all, the legislation would only apply to auction houses that do a certain level of business or above. We’re obviously talking about Sotheby’s, Christie’s, and a handful of others. Private dealers would not be subject to this, because much of what they do is highly confidential, and so it would be really hard to track. That would cause too many problems, I suppose, is the thinking. Of course, the art dealers’ trade association has been at pains to point out how much difficulty that would put them in.

KENNEALLY: Apart from artists, who would stand to benefit, clearly, from this legislation, who else is behind it?

ROSENBLATT: I would say art dealers like it because it doesn’t affect them. Artists like it, but you have to be careful here, because really the constituency that benefits is what we might call the 1% of artists, people like Frank Stella. People who are alive, or their estates are alive, their ancestors – sorry, the opposite of ancestors, their children, their estate holders – they’re the ones who would benefit from this. Struggling artists who haven’t really sold much of anything, they don’t really benefit. Of course the auction houses don’t benefit, because they would lose a percentage of their sale price. There are a number of direct economic beneficiaries or non-beneficiaries, and that’s quite apart from the broader copyright considerations of this law.

KENNEALLY: It’s still early days here with this particular bill, but is there much opposition to it?

ROSENBLATT: It’s not really early days, actually. The Copyright Office, you might call them the copyright consultants to Congress, have been looking at this issue for a long time. They looked at this about 20 years ago, and then they looked at it again maybe last year. What they really looked at was whether or not the art market in the US would suffer as a result of this proposed legislation.

When you try to propose something to Congress along these lines, the criteria tend to include prominently what’s the effect on jobs, what’s the effect on the gross domestic product? That’s how they think of these things. Congress doesn’t really think in terms of culture or anything like that. It isn’t what motivates Congress. So the interests behind this are pecuniary interests. Some of the interests against it are non-pecuniary interests who feel that this would be an overreach of copyright.

KENNEALLY: That’s interesting. Thinking about it, I can understand why Congress might want to support this kind of legislation, because it really wouldn’t have any political costs for them. It wouldn’t be noticed in the scheme of things and could sort of fly through.

ROSENBLATT: Only to the extent that, let’s say, the auction houses or rich, famous artists might be congressional contributors. But otherwise, yeah, I agree with that.

KENNEALLY: It’s not the sort of thing that would get the Tea Party’s knickers in a twist at all.

ROSENBLATT: They probably wouldn’t be interested in this.

KENNEALLY: Right. But you’re interested in it as a copyright strategist and somebody who sort of looks at these issues and thinks them through. There’s a point here which you made in a recent blog post about the way that artists and the art world are coping with the new digital environment. Tell us about that.

ROSENBLATT: Visual artworks are sort of an unusual, lesser-known nook and cranny of the copyright world. When you think of copyright, you think about books, obviously, music, video, films, games, video games, things of that nature – things that are very, very easy to reproduce with perfect fidelity nowadays. Visual artworks are not easy to reproduce. They are meant to be unique or mostly unique. The law actually says that you have to have 200 copies or less of something such as hand-signed photographs or lithographs or whatever. Obviously if it’s a painting, there can’t be any copies of the painting, because each one is a separate work.

In the digital age, you have all these works that can be almost for free and infinitely reproduced with no loss of quality. Visual artwork is sort of a different class of object. It’s almost like what’s called a useful object in law. I think that’s the term, useful object. Some people have said, hey, wait a minute. Why does this have to be limited to paintings and sculptures and things like that? Why not antiques, Cartier watches, antique cars, things of that nature? Leica cameras. Why wouldn’t those also apply? They have a very high resale value, many, many times greater than their original purchase prices. Those types of objects are not defined as copyrighted works at all under the law, so why those and not the others? That’s one issue.

KENNEALLY: That’s an interesting point, because it would be very easy, or easy enough, to find Frank Stella. But it would be difficult to pay out to somebody who had produced that Leica camera, or the baseball card, or some other item of that kind.

ROSENBLATT: Well, a baseball card is actually a copyrighted work. It’s a printed material. It’s a copyrighted work. If you were to pay resale royalties for a Leica camera, that’s an interesting question. Who’d get the royalty? Would it be Leica company, which is a German company, so maybe that’s not a great example. Maybe an old Bell & Howell or Kodak or something like that. Obviously we get the idea. Would it be the designer? Probably it would be the company, because it would be like patent law, where the inventor works for a company which is the assignee of the patent. But the law doesn’t work that way, and that’s one sort of weird thing about that law regarding visual artworks.

Another one is the tension between resale royalties and what we discussed a few minutes ago, the first sale, which says that once you’ve sold it, it’s out of your hands. There are a lot of tensions in the law over this that people are concerned about.

KENNEALLY: But in your blog post, you contemplated a world where artists care less about the copies and more about other kinds of activities as a way to earn their living and sort of professionalize their work.

ROSENBLATT: That’s right. What I said in my blog post is in the future, the uniqueness of visual artworks will be diminished by technology. 3D printing is the obvious example of a technology that enables physical objects to be created very cheaply and easily. We can imagine a future where even paintings and sculptures can be produced automatically, and then all that’s unique about them, if that, is someone hand-writing a signature on that. That could also be highly automated, yet also personalized.

One example that I point to in my blog is the husband and wife artist team named Christo and Jeanne-Claude, who are known for these enormous outdoor exhibits, such as wrapping the Reichstag in Berlin. Here in New York several years ago, there was something called The Gates in Central Park, just blocks from where we sit, where there were these saffron-colored banner things, it’s hard to describe them, all over many of the paths in the park. This was an exhibit that took up at least a square mile, if not a couple of square miles.

The thing is that they had to pay for this. No one paid them to do it. They had to get permission from the city to put it up, which they did. So the way they financed this was by creating easily copied artifacts which they could sign and sell. They created posters, postcards. Little swatches of the fabric were for sale. We actually have a postcard in our apartment signed by Christo and Jeanne-Claude. They just sat there for weeks on end, until their fingers were going to fall off their hands, signing these things to sell them for the equivalent price of a poster or whatever, so that they could make the money needed to pay for this.

I imagine they had some grant money to build The Gates, but this was not a directly remunerative activity. They were looking to other sources of remuneration from easily reproduced objects, in the same way that a musical artist might sell T-shirts or posters in order to make money, given that the sale of recorded music is going down.

KENNEALLY: It really does blur the line between creative endeavor and a business project, if you will.

ROSENBLATT: Yeah. Copyright law is about creativity and culture. The objective of copyright law is to create incentives for creators in order to maximize the public availability of cultural works. There’s a rap group called the Wu-Tang Clan, who were very popular a couple decades ago, like in the ’90s. They just announced that they are releasing an album, of which there will only be one copy. The way they’re going to do this is they are going to go to museums and galleries around the world, or the country, and play this album for people who pay admission, 30 or 50 bucks, to listen to this thing. They will listen on headphones, so there’s no possibility of surreptitiously recording it. And then people will have a chance to bid on the one recording, which will be encased in a one-of-a-kind art object produced in silver and some other materials by a noted artist. They expect the winning bidder to be bidding well north of a million dollars for this thing.

That’s great for them. They’re a big, famous hip-hop act, and they’ve sold millions of albums. But you have to ask yourself, if only one person can hear a musical work, does that really fulfill the objective of copyright? I would have to say the answer is no. You’re taking this out of the realm of copyright and trying to move it, almost artificially, into the realm of physical objects.

The Wu-Tang Clan, they’re very thoughtful about what they’re doing here. They say that they’re looking to start a conversation about the value of music in a world of infinite free copies, and I think it’s an extremely worthwhile conversation to have. This whole thing’s just fascinated me.

KENNEALLY: It certainly is fascinating, and it really gets down to, I think, the single point that there is no guarantee for a business model, whether it’s a musician, an author. And now as we’re looking at it, even in the art world for an artist, the effort to convert a creative work into some kind of monetary remuneration isn’t a simple formula. At one point, you could publish a book and do quite well at that. These days, that’s less and less and less remunerative. I think that what we’re getting at here with the Wu-Tang Clan, and with what the resale royalties is trying to address, is that diminution of remuneration that so many creative people have felt.

ROSENBLATT: There’s no question that in an age of infinitely available cheap copies, the perceived value of creative works has gone down. That’s a real problem for society, when you eliminate a middle class of content creators to create a world of one-percenters like Frank Stella, Lady Gaga, the Wu-Tang Clan, Suzanne Collins, etc., and then hobbyists on the other hand, who are not going to devote their lives or their livelihoods to creating copyrighted works. This is a real problem.

For the struggling artist, who is looking to just get noticed, get sold, they still want to get exposure. It’s been proven out that the way to get exposure is to just get your work out there. You can’t do what the Wu-Tang Clan’s doing until you’re already famous. You can’t do what Radiohead did a few years ago, pay what you wish for this album, unless you are already famous. In the case of both musical artists, they needed major record labels to make them famous.

I don’t think this resale royalty act really solves the problem for the majority of artists. I think it is helpful for already-successful artists, but I don’t think it really does anything for artists that are not already successful.

Another issue that people have raised regarding this law is there’s an issue of the initial purchaser of the artwork taking a risk for which he or she should be rewarded. For example, my wife’s aunt was an art dealer in Switzerland who discovered Jasper Johns. She took risks in order to promote the sale of his works. Maybe she bought some for herself. I don’t know. But she certainly had no guarantee that she was going to get anything for those works, and of course, she made out nicely by them.

But there is a feeling around this legislation that the artist is not the only one who is taking a risk by spending time to create artworks that maybe the public will be interested in. There are also collectors or dealers who like to be able to spot the next big thing and put their money where their mouths are.

KENNEALLY: Certainly it can be argued – again, here in Manhattan, there are myriad examples of it, that art dealers really do a great deal of work to showcase art and to really make it – to increase its value.

ROSENBLATT: That’s right. I would say that if you create an incentive structure that draws incentive away from the dealers, then you might get dealers less interested in doing what they do as well. That’s an argument that has been made, certainly.

KENNEALLY: Because they gather the marketplace. They bring people into the galleries. They are the ones who, if you will, talk up the value of the work, and therefore find remuneration themselves in it.

ROSENBLATT: That’s right. But you have to remember that this proposed law is meant to apply to large auction houses that do more than a million dollars in business a year. It’s not meant to apply to private dealers. Private dealers are perfectly OK with this legislation.

KENNEALLY: And I guess finally, you have to wonder whether if this particular piece of legislation does pass, and is signed into law, whether other types of creative individuals will lobby their congressmen and congresswomen to create a similar type of bill to protect authors, to protect musicians and others.

ROSENBLATT: I think yes, everyone’s always looking for ways to lobby Congress to strengthen intellectual property rights. I’m not sure that this legislation would have any significant impact on the musicians, songwriters, novelists, writers, photographers who are looking to solve the problems of the digital age. I’m not sure I see that connection. There are certainly other things that they could try, such as getting serious about copyright enforcement, which is not very well enforced these days.

KENNEALLY: Or, for that matter, copyright reform.

ROSENBLATT: Yes, Congress is setting out on what looks to be a very long journey to reform the copyright laws, and the executive branch is also getting involved through the Patent and Trademark Office, which, though few people realize it, also gets involved in copyright issues on behalf of the president, instead of Congress. Both branches are looking into how to reform copyright law. Of course, they’re going to be subjected to a barrage of industry interests on all sides of this issue over the next several years. I’m not going to predict where that’s going to come out.

I think everyone agrees that the current copyright law is outmoded. The last copyright law was passed in 1976, and one person described it as an excellent copyright law for the 1950s at the time. Hopefully we’ll be able to do better this time.

KENNEALLY: Indeed. And to follow that conversation, I would suggest our listeners go to Bill Rosenblatt’s blog, Copyright and Technology. We’ve been speaking today with Bill Rosenblatt in New York. He’s the president of GiantSteps Media Technology Strategies. Bill, thanks for joining us on Beyond the Book.

ROSENBLATT: Thank you very much, Chris. It’s always a pleasure.

KENNEALLY: Beyond the Book is produced by Copyright Clearance Center, a global rights broker for the world’s most sought-after materials, including millions of books and e-books, journals, newspapers, magazines, and blogs, as well as images, movies, and television shows. You can follow us on Twitter, find Beyond the Book on Facebook, and subscribe to the free podcast series on iTunes or at the Copyright Clearance Center website, Just click on Beyond the Book.

Our engineer is Jeremy Brieske of Burst Marketing. My name is Christopher Kenneally. For all of us at Copyright Clearance Center, thanks for listening to Beyond the Book.

Share This