The Online Art Market is the Offline Art Market
There are two statistics about online art sales that keep me up at night. First, online art sales made up 8.4% of the total art market in 2016. Second, consumers discover art through social media more than any other method. My initial reactions was to brush the numbers off, assuming that millennials (I hate utilizing the overused term, so I’ll refer to them as young people) would be finding art on social media but are not actually buying. But, wait! Young people actually view art as a better investment than do baby boomers. More than half of young people would buy art online and a quarter of them prefer to buy art online.
Now, how can we make sense of the insanity that these stats portray? Obviously something is wrong here so let’s take a step-by-step look at the different actors in the online art market.
Instinctively, this is where I had assumed the problem would arise. Young people are stripping away unnecessary belonging in a trend towards minimalism with the common thought that art buyers and collectors are the Gagosian type. But when we look at art not as a traditional good but as an experience good, it becomes a bit clearer why younger generations are interested in art appreciation and ownership. The combination of interest in art, over half of people aged 25–34 say that they appreciate and/or like art, alongside almost half of young people believing that art is a good investment leaves me skeptical to think that art buyers are the problem in this market. Young people find art online, appreciate its value, and are willing to buy art online. We could dig much deeper into this segment but I think its best to leave it at this (with some room for debate):
young art buyers probably aren’t the online art markets problem.
Oh, the forgotten bunch. In researching and reading about art market trends, online art reports, art buyer surveys, and other readily yet sparsely available content, one side of the story seemed to always be left out. The artists. What is art without artists? (AI art. Sorry, that was meant to be rhetorical). In the realm of online art, artists are the last to have a say as they do not build and control the platforms, nor do they buy the artworks. Artists without gallery representation owe large commissions to online sales, Saatchi Art takes 35% and Artfinder takes 30% and so on. This is still less than a traditional gallery would normally take but they are investing their time, effort, and real estate in the promotion of their artists. In talking with some of the artists I work with, the general consensus is that they want exposure for their art as well as a personal connection to where their art ends up.
As William Rosewood brought up in our first conversation together, “I’d rather sell my art personally. It’s harder to create a commissioned piece but it’s satisfying when it all comes together.” All of these interactions can be facilitated by an online market, shrinking the gap between artists and patrons, using technology to bring potential buyers into the studios of artists around the world. So I think it’s pretty safe to say artists aren’t the problem partly due to that artists have never held power over the art market, a dynamic that the world wide web should have been a solution too.
That leaves us with one last culprit. Online art platforms. In an article titled “What does it take to be a top 10 Online Art Platform?”, each platform is asked about their unique selling points (USPs) and the responses are frustratingly out of touch. Unsurprisingly, the top 10 list published in January, 2017 now only stands at 8 platforms. Let’s break down Christie’s LIVE’s answers, Christie’s LIVE being ranked as the #1 online art platform. The first part of what Christie’s USP is that they were “Founded in 18th Century London, [and] today [are] a global art business”. They continue by proudly stating that their first online-only sale was in 2011, just a mere sixteen years after eBay’s first online auctions. And Christie’s was actually the pioneer in this space!
Stating that “many others have followed” their 2011 effort. Credit to Sotheby’s, one of Christie’s main competitors, who took a shot at online fine art sales in 2000 in a partnership with eBay. Sotheby’s would end the cooperation in 2003 after losing 100 million dollars. This is only two years after Sotheby’s and Christie’s were slammed with 256 million dollar a piece fines for collusion in co-ordinating commissions on sales. The major influences for platform choice in online art buying are trust and credibility, making Christie’s position at #1 even more troubling. Saatchi Art, #6 on the top  list, is the first platform to even mention artists while answering about their USPs and who their customers are.
I could go on and on, breaking down the way online art platforms are stuck in the past with their answers to “How do you adapt to emerging technologies?” and how they have failed to create an environment connecting artists, collectors, and information built for a modern audience. But I think we’ve found our answer to how the online art market can be so small when art is increasingly being found online.
The art market has a lot of catching up to do when it comes to modernization and digital business models. The onus is not entirely on the art platforms but they sure are a site of major failures till today. “The art world can feel like a closed circle,” is a sentiment shared by Joe Kennedy and many others. This is in reference to the offline art world but applies across the online art world as well. The power of digitalization should be worrisome to the traditional players of the art world and the emergence of platforms that work for all stakeholders will one day (I’d bet my money on soon) emerge.
Written by: Charles Weiler-Ulin