Funding of the arts and heritage - Culture, Media and Sport Committee Contents


Written evidence submitted by the Design and Artists Copyright Society (DACS) (arts 168)

1.  EXECUTIVE SUMMARY

  1.1  DACS welcomes the opportunity to provide its input into the inquiry and highlight the economic challenges facing artists and their estates, as well as the importance of industry providing support for these groups. The response focuses on questions 1, 3 and 8 outlined in the terms of reference.

  1.2  This response relates to the Artist's Resale Right (ARR), which was introduced in 2006 in the UK for artists, and is due to be fully implemented in 2012. This will extend the right to the beneficiaries and estates of artists that have been deceased for up to 70 years, providing vital support to the heritage of the art community.

  1.3  Artists add substantial value to the UK, economically and culturally. As public sector funding is reduced, it is more important than ever that the Government acknowledges the need for the industry to support artists and their estates. The ARR is a valuable source of income in this respect.

  1.4  Ensuring a robust copyright system supports artists and reduces reliance on government funding. Artists earn a significant portion of their income from their royalties and the feedback we receive from artists is that, no matter how small, royalty payments support their work. Of note, the median payment to artists through the ARR is £360.

  1.5  Inheritance of an artist's legacy typically brings with it a burden and the extension of the ARR will secure a source of funding for estates, enabling them to protect the nation's artistic inheritance, as well as support the art trade. Estates are very dependent on royalties and the full implementation of the ARR will provide a significant contribution by the art industry to protect the heritage of the art community.

  1.6  The ARR has not had a negative impact on the art industry and neither will the extension of the Resale Right to deceased artists. There is no evidence that the extension will have a negative impact, representing only 0.2% of the entire art market. The ARR has a number of mechanisms in place to protect the interest of the art trade, including the tiered royalty rates and a £10,000 cap on the maximum royalty an artist can receive.

  1.7  DACS calls on the Committee to support the full implementation of the ARR to provide much needed support for UK art and its heritage.

2.  INTRODUCTION

  2.1  The Culture, Media and Sport Select Committee have called for responses to inform the inquiry into the Funding of Arts and Heritage. As part of this, it will be reviewing the impact that public sector cuts will have on the arts and heritage, as well as the role that industry can play in support of arts and heritage.

  2.2  Established in 1984 by artists for artists, DACS (the Design and Artists Copyright Society) is the UK's leading not-for profit rights management organisation for visual artists. We translate rights into revenues and recognition so that artists and their works are properly valued. Today the organisation represents nearly 60,000 visual artists.

  2.3  DACS welcomes the opportunity to provide its input into the inquiry and highlight the economic challenges facing artists and their estates, as well as the importance of industry providing support for these groups. The response focuses on questions 1, 3 and 8 outlined in the terms of reference.

  2.4  A core element of this response relates to the Artist's Resale Right (ARR), which was introduced in 2006 in the UK for artists, and is due to be fully implemented in 2012. This will extend the right to the beneficiaries and estates of artists that have been deceased for up to 70 years, providing vital support to the heritage of the art community.

  2.5  As part of a broad community of organisation supporting visual artists, DACS would ask you to note our general agreement with the points raised by a-n and AIR in their response to this inquiry.

3.  COMMENTS

3.1  Artists add substantial value to the UK, economically and culturally, and should be supported by government funding

  3.1.1  Unlike many professions, artists draw their income on a non-contractual basis from a number of sources, including from both the public and private sector. As public sector funding is reduced, it is more important than ever that the Government acknowledges the need for the industry to support artists and their estates, ensuring a vibrant and growing art community.

  3.1.2  Although the art industry makes a significant economic contribution to the UK, the average artists' income in the UK is £21,734.13, much lower than the UK average annual wage.[136]

  3.1.3  At a time of public sector cuts, artists' limited incomes are being heavily impacted not simply through direct subsidies, but also the availability of public sector contracts. Recent data indicates that the value of employment opportunities for professional artists has already declined by 27% since 2007.[137]

3.2  Ensuring a robust copyright system supports artists and reduces reliance on government funding

  3.2.1  The strength of the UK's cultural sector is directly related to the opportunities we provide to creators to make a living from their creative endeavours now and in the future.

  3.2.2  We urge the Committee to recognise individual creators as the engine of the creative economy, requiring economic incentives and rewards commensurate with the value they add to the UK's economy. This includes a wide range of visual artists, including photographers, illustrators and fine artists.

  3.2.3  The ARR provides a valuable source of income for new and upcoming artists whose incomes are coming under increasing pressure in the current economic climate.

3.3  Artists earn significant income from their royalties

  3.3.1  DACS has long understood the value of royalties to visual artists. The feedback we receive from those we pay royalties to, no matter how small, tell us clearly that payments provide an independent source of funding which supports artistic practice. In March 2010, DACS commissioned Europe Economics (www.europe-economics.com) to conduct independent research into the financial significance of royalties to artists.[138] The research surveyed over 700 artists and showed that on average artists receive just fewer than 11% of their income in the form of royalties.

  3.3.2  The median payment to artists through the Resale Right is £360 and the case study in Box 1.0 provides an example of the level of the resale right enjoyed by a new artist under the current system. At this level the resale right does not act as a disincentive for sale, but provides a valuable source of income.
Box 1.0
Tony Bevan Head Horizon Sold for £8,125 Sotheby's, June 2010, London Hammer price: £6,500 Sale price: £8,125 Buyer's premium price:[139] £1,625 Buyer's premium price represents 25% of hammer price ARR due: £260 Royalty represents 4% of hammer price


3.4  The extension of Artist's Resale Right will secure a source of funding for estates, enabling them to protect the nation's artistic inheritance

  3.4.1  The principle of a post mortem term attached to intellectual property is long-accepted. Inheriting an artist's legacy typically brings with it a burden. Beneficiaries are often required to store, preserve, and restore original works. They may be expected to maintain an archive, supply reproductions and provide biographical information. Estates are frequently relied upon to contribute to the assessment of provenance, identification of fakes and to be expert in every aspect of the artist's life and work. This crucial work is relied upon by scholars, museums, art dealers, collectors, and the art world generally.
Box 1.1 Case Study—The William Scott Foundation
The William Scott Foundation is run by Robert and James Scott, sons of the artist William Scott who lived from 1913 to 1989. The Foundation undertakes the cataloguing, preservation, and valuing of William Scott's work, as well as identifying fakes. The running costs of the Foundation are now between £250,000 and £500,000 per annum. The Foundation's income does not even begin to approach that sum. The introduction of the ARR for families and beneficiaries will create a vital new source of income, enabling the Foundation to continue its important work.


  3.4.2  Recent research undertaken by DACS indicates that the estates of deceased artists are very reliant on royalties. Only 22% of income received by the estates was from activities other than royalties. Full implementation of the ARR to secure the collection and payment of resale right royalties to heirs or estates of artists that have been deceased for up to 70 years, will come into effect from 2012. This will make a significant contribution to the support offered by the art industry to protect the heritage of the art community.

3.5  The ARR has not had a negative impact on the art industry and neither will the extension of the Resale Right to deceased artists

  3.5.1  Since the introduction of the ARR in 2006, there has been no evidence that it has had a negative impact on the UK art market. In fact, the British art and antiques market generated £7.7 billion in sales in 2009.

  3.5.2  In addition, there is no economic evidence to suggest that the extension of the resale right will have a negative economic impact on the UK's art market and has operated successfully across the rest of Europe since 2006. And it is estimated that resale royalties will generate £15 million per annum post 2012 for artists and their estates. This is a significant contribution for artists and their beneficiaries but represents only 0.5% of the value of the modern and contemporary art market and only 0.2% of the entire art market.

  3.5.3  The art market in London and the rest of the UK is widely acknowledged to be the most established market in Europe. Those opposed to the right claim that the extension of the resale right will undermine the UK's position, but DACS calls on the committee to acknowledge that there is no evidence to suggest that this is the case. It is also worth noting that the Resale Right is not unanimously opposed by the art trade with a number of dealers disputing the economic claims that have been put forward by those opposed to the Resale Right.

3.6  The ARR has a number of mechanisms in place to protect the interest of the art trade

  3.6.1  The ARR is intended to support artists and subsequently the long term growth of the art trade. Mechanisms in place to ensure that it does not have a negative impact on the industry include tiered royalty rates ranging from 4% and 0.25% and £10,000 cap on the maximum royalty an artist can receive on a single sale. These mechanisms will be afforded to those works covered by the extension to deceased artists and the Right will have a minimal impact on a thriving art market in the UK.

3.6.2. Box 1.2 provides two examples of the potential contribution the Resale Right would make to the estate of a deceased artist, whilst also indicating the limited percentage of the sale price made up by the Resale Right.
Box 1.2
Alberto Giacometti Walking Man I (1960) Sold for £65 million Sotheby's, February 2010, London Hammer price: £59 million Sale price: £65 million Buyer's premium: £7 million Buyer's premium represents 12% of the hammer price Potential ARR: £10,000 Royalty represents 0.02% of the hammer price
Pablo Picasso Potrait d'Angel Fernandez de Soto Sold for £34.7 million Christie's, June 2010, London Hammer price: £31 million Sale price: £34.7 million Buyer's premium: £3.7 million Buyer's premium represents 12% of hammer price Potential ARR: £10,000 Royalty represents 0.03% of hammer price

4.  CONCLUDING REMARKS

  4.1  Artists are the bedrock of the UK's thriving art community, providing considerable economic benefits. New and established artists need support to ensure that this industry continues to thrive. The current economic downturn, coupled with the decline in government support, in the form of funding and public sector contracts, presents a challenge for artists and estates of deceased artists in the UK.

4.2  The ARR has successfully supported up and coming artists since its introduction in 2006. The Resale Right is due to be extended to the beneficiaries and estates of deceased artists from 2012, providing much needed support for the UK art and its heritage as it has done for the rest of Europe since 2006.

  4.3  At a challenging time for artists and their estates, DACS calls on the Committee to support the implementation of the EU Directive and the important role that the industry must play in supporting the foundations of the art community.

5.  ABOUT DACS

  5.1  Established in 1984 by artists for artists, DACS (the Design and Artists Copyright Society) is the UK's leading not-for profit rights management organisation for visual artists. We translate rights into revenues and recognition so that artists and their works are properly valued.

  5.2  DACS offers copyright licensing for 54,000 visual artists and collective rights management for 16,000 visual artists. DACS also collects and distributes resale royalties as part of the ARR. Since the introduction of the right DACS paid by over £10.5 million to over 1,800 visual artists.

  5.3  For further information about DACS, please visit our website: www.dacs.org.uk.

September 2010











136   Submission to European Commission impact assessment exploring approaches to facilitating the digitisation and dissemination of orphan works, DACS, March 2010. Back

137   Open letter to The Rt Hon Jeremy Hunt MP Secretary of State for Culture, Olympics, Media and Sport, published in a-n Magazine, September 2010. Back

138   Submission to European Commission impact assessment exploring approaches to facilitating the digitisation and dissemination of orphan works, DACS, March 2010. Back

139   The buyer's premium is levied on the buyer of a piece of art by an auction house and is in addition to any commission taken out of the proportion of the sale price received by the previous owner. Back


 
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© Parliamentary copyright 2011
Prepared 30 March 2011