Spot the difference! What's a resale royalty and what's licensing?

Spot the difference! What's a resale royalty and what's licensing?

Time for a quick round of spot the difference. The incoming artist resale royalty scheme and our own CLNZ auction house licensing scheme are both good news for visual artists – but they’re also different things

Spot the difference! What's a resale royalty and what's licensing?

Plot spoiler: you’ll be able to utilise both when your work sells on the secondary market – scroll to the end for an example.

Remind me how artist resale royalties work?
The artist resale royalty scheme will mean artists are paid a five percent royalty when their art is sold on the secondary market. The scheme is about equity and fairness and recognising the artist’s role as creator of work that grows in value over time.

It’s not the law yet, but it will be. An artist resale royalty scheme was one of the things agreed to last year in the Free Trade Agreement New Zealand made with the United Kingdom, and the government has recently announced it’s targeting late 2024 for the scheme to take effect (more in this The Big Idea article).

Once the legislation is passed, agreements with other countries that operate artist resale royalty schemes will be able to be negotiated. Which will mean Aotearoa New Zealand artists will be able to benefit when their work sells on the secondary market in those places too.

So what’s copyright licensing then?
When you sell art you’ve made to someone else, they buy the physical work but not your copyright (unless you’ve specifically agreed this). So, if anyone else wants to copy or reproduce your work, they generally need your permission to do this. Whether you give permission is your choice. One thing you can do is let that person use your work in a specific way for an agreed fee (i.e. grant them a licence to reproduce it).

Which is where the CLNZ auction house licensing scheme comes in. When art is on sold it’s pretty common for auction houses to reproduce (copy) the art works for sale in their advertising. But to do that legally, permission needs to be given by the copyright owner (usually the artist).

Our visual arts licence is what’s called a blanket licence (read more on this here). When you join our scheme, you agree we can license your art to auction houses who want to reproduce it and collect a fee, which we then pay back to you. The agreement you sign sets out the ways that auction houses can do this so there are no surprises along the way. You retain your copyright and it’s free to sign-up – you only pay (via a fee deduction) if your work sells.

Spot the difference: one scenario, two schemes...
Here’s an example. You’ve created a series of sketches. Eva buys one from you. A few years later, she takes it to an auction house to sell it. Ricky buys it and pays three times the amount Eva did. The resale royalty scheme (when it comes in) will mean you, the artist, will be paid five percent of the price Ricky pays Eva.

Now, let’s throw copyright licensing into the mix. The auction house Eva is working with reproduces your sketch in their catalogue (and on Instagram) to interest buyers. As copyright owner, the auction house needs your permission to do this. You’ve signed up to our visual artists licensing scheme (and the auction house is licensed) so you’ll receive a fee for the use of your copyright.

That’s: one sale, two schemes and two separate payments!

Find out more about our visual arts licensing scheme.

Photo by Markus Winkler on Unsplash

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