Investors look at the size of markets. The art market did almost $70B last year. That is a big number yet the business is very fractured. There are big auction houses, there are galleries across the globe, there are art fairs, there are online sites dedicated to editions and the primary and secondary market (resale) and more.
I have seen so many people in different businesses afraid to change because what they are doing works. If they are doing really well I sometimes refer to that as the golden handcuffs. Why change when the money is coming in. What happens when one day the money trail shifts and profitability changes and market share shifts….you are screwed. So in order to continue to be successful in a market you have to be see what’s coming down the pike and make the necessary changes.
A culmination of a variety of things are hitting the art world straight on and this year could be the time of change because it has to. Selling to the collectors has changed. The art world has become flat because of the internet. We can see what just sold and for how much. We can have images sent to us around the globe People are buying what they want from who they want. It isn’t necessarily a gallery or an auction house but directly from someone who wants to sell their work. They no longer need to use an auction house or a gallery on either end.
Another big change is the explosion of shows such as Frieze, Basel and others. Galleries pay a lot of money to have those booths. You need a gallery to have a booth but that booth could cost as much as your rent that month. So to be a cutting edge gallery hoping to bring really unique thoughtful art to the world doesn’t always sell. How can a gallery rationalize an expensive booth for an up and coming artist pushing the edge that might not sell a piece. They can’t.
Galleries need to change the 50/50 split that has been the standard for years among artists and galleries. Now it needs to be more like 70 for the gallery and 30 for the artist after the gallery has spent money on rent, marketing, shows, employees, etc. The numbers just don’t add up anymore.
Sotheby’s just cut back the staff and then turned around to buy a blue chip advisory firm that helps bring together buyers and sellers and advises them on building out their collection. Doesn’t seem like future thinking here but old school guns with major power.
Auction houses and galleries are not museums. Museums are non-profit places that educate the public on art through collecting.
I just see a storm coming in this world and somehow or another we are going to see more galleries close, fairs rethink the rules of the game for galleries to show, auctions to think more like a company with powerful backend technology and then there is always the education component. Should be an interesting year in the art world.