Musings on Photography

Droit De Suite

Posted in business, Droit de Suite, ethics, the art world by Paul Butzi on May 3, 2007


Supporting Droit du Suite is an example of how I think artists, as a group, are often delusional about how the marketplace works.  The basic idea of Droit de Suite is that an artist should get a share of any increase in value that occurs after the sale of an artwork.

Sometimes, someone buys an artwork, and then later sells it for a higher price than they bought it.  Without Droit de Suite, the profit of the sale goes to the person who bought the work and subsequently sold it.  If an artist sells an artwork for, say, $500, and then the buyer eventually sells it for, say, $50,000, the buyer nets a profit of $49,500, and the artist’s share of this profit is… zero.

Proponents of Droit de Suite say that’s not fair.  The artist did all the work, the buyer did nothing but hold the work for a while, and yet the artist gets nothing but the original $500 and the buyer gets $49,500.  Not fair, not fair!

So what Droit de Suite does is this: whenever an artwork is sold, the original artist gets a cut of the sale price (for example, in France, between 1% and 3% of the sale price goes to the artist).

So here are the problems I see with Droit de Suite:

  • In some implementations, the cut that the artist gets is based on the selling price, not the profit.  So every time the artwork changes hands, the artist gets paid.  Again.
  • Even in those cases where the artist only gets a share if there’s a profit, prices are not adjusted for inflation.  So if I bought a work for $1000 in 1970, and sell it for $2500 today, under Droit De Suite, the artist might get 3% of the sale, or $75.  This might seem fair, but in fact, after adjusting for inflation, the value of the work has actually declined – $1000 in 1970 dollars is about equivalent to $5300 in 2007 dollars.  So, in reality, there’s been no profit at all.  I’ve lost money on the sale, and the artist gets 3% anyway.  Raw deal for me, eh?  (in some places, proposed rules DO adjust for inflation, but that’s not the norm)
  • Prices are not adjusted for opportunity cost.  To really be fair, the profit should not only be adjusted to take into account losses due to inflation, but also the opportunity cost of having invested in the art.  In other words, if I buy treasury notes, I can expect a riskless rate of return of something like 4% after allowing for inflation.  The idea of Droit de Suite is to allow the artist to participate in gains due to increased market demand for his/her work, not to allow the artist a cut of the time value of money.  So the profit should be adjusted to take this into account, but isn’t.
  • Let’s suppose that you’re going to buy a three handled moss covered family credenza.  But the sales contract stipulates that, if you ever sell the credenza, the woodworker who made it will get 4% of the sale.  If you have half a clue, you factor this future loss of profit from a sale into the price you’re willing to pay.  The same will be true with paintings, sculpture, photographs – any art work.  In the end, Droit de Suite doesn’t put more money in the pocket of an artist, it just changes the time the money arrives and increases the risk.  A lower selling price today may or may not be worth a shot at a royalty later.  Remember, not every work of art is resold.

Are those the only economic arguments against Droit de Suite?  No.  The list is nearly endless.

But here’s the part that I think is most telling.  Droit de Suite insists that the artist get some of the positive advantage from the increase in the value of the work after he/she sells it.  If this is fair, then I think the artist has a responsibility to share in the loss if the work declines in value.

Why should the artist get to participate in the wins, but not be obligated to participate in the losses?

6 Responses

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  1. chuck kimmerle said, on May 3, 2007 at 6:46 am

    I can see something like this steamroll out of control. Where does it stop? If artist is guaranteed a cut of future profits, what’s to stop a gallery from demanding the same? What about current owners, are they then going to demand a cut of profits if the subsequent owner sells?

    The sad thing is that the people who are buying an artists work are the same people who are responsible for the increased value of that same artists work. Therefore, the artist is already profiting, as they’re work is now more valuable, allowing them to sell new stuff at increased prices.

    Hmmm….I wonder how hard it will be to have past clients sign retroactive contracts?

  2. sjconnor said, on May 4, 2007 at 6:59 pm

    If you write a book, you sell the right to publish that book to a publisher, you don’t sell them the book. If they reprint that book and charge a higher price, you get a better return. Or, if the original contract has expired and they want to reprint it, but another publisher has offered you a better deal, you can sell the rights to them. You’re not stuck at the original rate.

    If you’re a photographer, and you sell a print, and, later, your reputation soars, taking the value of photographs by you along with it, you can just print new photographs to cash in on your sudden fame.

    If you’re a painter or a sculptor, each work is a one-time deal. If you sell one and it goes up in value, why shouldn’t you, the person who actually created the work, make at least some profit from its increased value?

    As to Chuck’s questions, the seller did nothing except buy it and hold it. The gallery did nothing except sell it. There’s no creative input in either of those activities (if something as passive as displaying something and saying, “Hey, wanna buy it?” can be called active). The artist, on the other hand, made it, and without that act of creation the other folks would have nothing to “do”.

    Most artists don’t make a lot of money from their art. Even with “droit de suite” this is the case. France, crazy country that they are, figured that keeping artists eating keeps them creating art, thus keeping culture alive.

  3. sjconnor said, on May 4, 2007 at 9:27 pm

    One other point, this one in response to your asking why the artist should share in the profit, but not the risk. Simple answer – the artist already took the risk, devoting, potentially, a large part of their life to creating the work.

  4. tim atherton said, on May 5, 2007 at 4:29 pm

    And it’s not just France – I believe this is the case across the EU.

    Overall, it makes a lot of sense

  5. […] comments on the Droit de Suite post, here If you write a book, you sell the right to publish that book to a publisher, you don’t sell them […]

  6. Arek Blomka said, on May 14, 2007 at 8:43 am

    I guess idea “droit de suite” is a big misunderstanding. There should be some values divided: artistic/cultural value of an artwork and value of object on free marketplace where price of artwork depends on how high someone wants to pay for it. Price has nothing to deal with art process but with merchandise skills.

    I don’t know if this is common in other EU countries (not in Poland) but I suppose that’s only in France where social help is overgrown. In Poland in communist times artist should/had to work for government institutions and was paid for it. It looks similar for me.

    I see two major reasons of that:
    – there is too many artists
    – artists can’t take care of their business

    to sjconnor:
    in past days photographer (graphic artist/other types of reproductive arts) produced fixed amount of copies numbering them so buyers were certain that artist won’t produce more copies in the future

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