It was a day the art world had never seen before. Last Monday at Christie’s auction house in New York, a Picasso painting sold for $179 million, which sets a record for the most expensive item ever to sell at auction. In total, the auction house sold more than $1 billion of art over three days - a new record for the art world.
This 12 foot sculpture of a balloon dog is the most expensive item ever sold by a living artist. The price tag was $58.4 million.
Despite numbers like these, emerging artists are meant to accept the fact that they cannot make a living from selling their art; The money simply doesn’t filter down to the emerging market. Understandably, advice for new art grads is often, “Don’t quit your day job”, but when all of your waking hours are spent doing something other than what you love (which is making art), how does that impact the diversity of the art world overall?
In the tech world we talk about disruption all the time and it’s become such a buzzword, but the truth is that companies who are disruptors identified and solved a unique problem to their industry. Uber solved transportation problems, AirBNB solved hospitality problems, Snapchat solved messaging problems. So what are some art world problems?
Buyers and sellers at large auctions can remain completely anonymous, and thus no one truly understands what drives irrational market forces. And similar to the financial markets, those who have insider information have leverage and control of market demand and therefore profits.
"Dealers operate in a murky shadow world, and money flows from information asymmetries. The ones who make a profit off the art market are those who know the industry front-to-back and have the deep pockets to buoy the markets of their artists when interest wanes.” www.blouinartinfo.com
The perpetual promotion of a few top earners leaves a larger population of artists out in the cold. For art dealers and advisors it's becoming common to go down a list of top artists and tick of the blue-chip names that "need" to be in the collection, just like stocks in a financial portfolio.
The art world overall, and especially the gallery system is inaccessible for most people. It’s not working for emerging artists, and it’s not working for collectors who don’t have buckets of cash. New collectors may find the art world overpriced, intimidating and elitist. Hard-working emerging artists may not have been born into the right circles of influence to create demand for their work.
There is some grumbling even within the establishment. After 41 years, New York’s McKee Gallery is closing down and the founders attributed their decision to their disgust with the current state of the art world. “The value of art is now perceived as its monetary value,” their statement reads. “The art world has become a stressful, unhealthy place; its focus on fashion, brands, and economics robs it of the great art experience, of connoisseurship, and of trust”.
There is a trend towards collecting for the sake of making a conspicuous investment, as newly minted billionaires in China, Russia and the Middle East vie for their cultural legacy. New collectors who enter the art world through the lens of the market are understandably more conspicuous in their purchases of what they believe to be ‘profitable' artwork. There is less risk being taken with difficult or challenging work, which leads one to wonder if the art market overall has lost confidence in artistic values. Artist Olafur Eliasson believes it has - he’s gone so far to say that the art market is counter-productive to creativity.
I’m (obviously) fascinated by the art market. I worked at an arts nonprofit in New York that was very well connected to the art scene there, and I remember the founder curating our fundraising auction based on what seemed like a gut feeling. I even asked what made one artists work more valuable than others, as it didn’t seem based on the work alone. She had twenty years of experience as an art dealer before founding RxArt and knows the intrinsic value of the work - the organisation places contemporary art installations in children’s hospitals, aiming to improve the patient experience - but she also understands market forces.
Many times the value placed on an artist’s work is as much about the artist and their connections as it is about the quality of the piece. In the traditional art industry, these connections are forged and validated through the gallery system. However, galleries don’t necessarily support the careers of emerging artists, and take a minimum of 50% commission on all sales of work. There must be a better way to introduce new collectors to the artistic community.
It’s quite a shock when a gallery that’s founded on the fundamental principle of talent and ability is breaking new ground in the art world. The founders of The Unit Gallery in London have said in a Guardian article, "In an industry so often governed by commercial viability, back stories and nepotism, we proudly stand by our commitment to only showcase work that we genuinely believe in and nothing else.”
The tech sector has a knack for giving full access to goods and services where we were previously limited to less efficient, traditional industry standards. The art world needs us, but the industry needs to be open to some big changes.
So how can technology help?
People are buying more art online, which can begin to democratise the industry. While it won’t do anything to change the astronomical price tags at the top tiers of the market, it could do a lot to encourage new collectors to get involved and help emerging artists to have more control over the way their work is shown and sold.
Of the 5.1 billion pounds in 2014 sales from Christie’s last year, 21.4 million was from online only sales. And while that’s only around 4% of total sales, that figure spiked 54% from the year before. And this percentage is increasing year after year.
Gerard Richter, the most expensive living European artist, has a “very good website” (it's terrible) that dealers believe contributes to his sales, allowing new collectors to thoroughly research his life and works.
I’ll mention a few of my favourite tech companies that are making progress towards solving the problems I mentioned of transparency, diversity and accessibility.
Art List (https://artlist.co/) is a peer to peer selling network, like the AirBNB for art sales, who aims to reduce the need for large auction houses who have a history of shortchanging artists on resales. They take a 10% commission on sales, which they share 50/50 with artists.
Amazon (http://www.amazon.com/Art) has recently made it’s foray into the art market, partnering with around 150 galleries who give up a slice of the commission on each sale - between five and 20 per cent - in return for Amazon bringing their art to a larger, international audience. DegreeArt.com is one of the galleries collaborating with Amazon in this venture, who for ten years has been the UK market leader in online art sales, specialising in UK student and graduate art sales.
Paddle8 (https://paddle8.com/) is an online auction house for fine art, with themed auctions from selected nonprofits. So instead of all auctions being forced through the traditional houses such as Sotheby’s and Christie’s, smaller organisations (such as the one I worked for) who are fundraising can reach more people. They take around a 20% commission on sales, which seems like a lot but is actually good compared to larger auction houses standard commission of 35%.
There are these and many more companies making progress towards breaking down barriers to entry, but there has yet to be a service that’s come along to disrupt the traditional way of doing things.
There are big opportunities to explore.
An intrinsic value in art (separate from its price tag) is something best communicated by artists themselves. I propose a service that gives control to the artist to tell the full story of the work, that completely de-commoditises art while educating people about its virtues.
…wish me luck making that profitable.
By the way, I'm working on a product that aims to solve some of these problems. You can find more info about that here. This post is based on a talk I gave last Tuesday at Digital Shoreditch called 'Disrupting the Art World'.