The art market in the time of social distancing
Art market institutions have had no choice but to go online.
The Covid-19 crisis has tremendously impacted all industries, among which the cultural industry has been dramatically hit. In Paris, the Palais de Tokyo has lost a third of its predicted annual revenue. This could result in its bankruptcy as it is 63% self-funded. As one of the most well-known institutions for contemporary art, its closure would be a great loss for the Parisian art scene. The state has granted them with 1,5 million euros, allowing them to keep face during these uncertain times.
Unlike museums and cultural institutions, the art market was able to hold its own thanks to a relatively quick online turnaround. Christie’s, Sotheby’s or Bonham’s were already slowly experiencing online auctions. However, the global lockdown has forced them into going fully digital – at least for the time being. Sotheby’s most recent hybrid sale net $363.2 million in a very weird atmosphere. The auction house wanted to show “world-class artworks in safe, engaging and new ways”.
Katie Lynch on transparency within the art market
Katie is soon to graduate from Sotheby’s Institute of Art London with a Masters Degree in Art Business. You can follow her on her Instagram.
The extent to which the shift online might affect the art market’s transparency is yet to be seen. Virtual transactions are such that the art world’s culture of verbal agreements and handshake deals may become increasingly obsolete. It is safe to assume that such purchases require a significantly higher amount of written correspondence, particularly as high-resolution photos and detailed condition reports replace the experience of actually seeing an artwork before deciding whether or not to purchase it. But will the formalisation of sales increase broader market transparency? While it would be nice to think so, early indications suggest not.
London’s Masterpiece Fair, usually held at the Royal Hospital Chelsea, requires its exhibitors to display the prices of works, the idea being that doing so increases market transparency. This year, as Covid-19 forced the cancellation of the fair, Masterpiece collaborated with Artsy to present its exhibitor’s programmes online. However, in the online edition of the fair, not all exhibitors have complied with Masterpiece’s usually strictly imposed requirement that prices be displayed. The is disappointing but unsurprising; the truth is, it serves galleries better to maintain the aura mystery surrounding the apparently inaccessible art world. Not only does keeping the price of an artists’ work deliberately opaque render it much easier to inflate or deflate prices depending on the interested party, it keeps the art world aspirational, exclusive, and this is a significant part of its appeal.
What could tomorrow’s art world be?
It seems very unlikely that the art market will become more transparent because of the Covid-19 crisis. However, what we have seen, is a totally different way to consume art. As Katie previously mentioned, virtual transactions have been the only way to purchase art. Therefore, those who were reluctant towards the digitalization of the art market have had no choice but to live with it. And who knows, some may have enjoyed the process and will do it again.
But, if I am a strong believer in digital, I cannot imagine the art world going fully online. Platforms like Artsy or Singulart will eventually, and perhaps on the long term, become fierce competitors of physical galleries. What I think could happen in a few years, is a market evenly split between the digital and the physical.
Moreover, a new type of collector is slowly entering the market. They are investors willing to diversify their portfolio and buying art as an asset rather than a work of art. They do not necessarily have the time to go to galleries and would rather seek advisory or buy online.
In conclusion, I think the art world has been propelled into the digital realm faster than it ever wanted to be because of the Covid-19 crisis. However, as Katie stated, it is a world that wants to stay exclusive and an increase in transparency does not seem likely – or at least not because of Covid-19.