Artist Resale Royalties: Do They Help or Hurt?
Kal Raustiala and Chris Sprigman
12/22/2011 | 12:04 pm
In America, it’s sometime said, all big trends start in California. That’s true for great things like hot tubs, the iPod, and Pinkberry. It’s also true for bad things, like tax revolts, Pinkberry, and . . . artist resale royalties.
Artist resale royalties? In a previous post, we explained how California’s law guaranteeing artists 5 percent of the profits from any later sale of their artwork has some unintended consequences. The California law helps the tiny fraction of artists fortunate enough to have their work appreciate significantly in value. But it does nothing for the 99% of artists whose work has little enduring commercial value. Not only does it not help them, it probably hurts them.
How? Because if buyers know that they have to pay the artist a share of any profits from later sales, they are likely to pay less in the initial transaction.
h/t Doug Stuart