Online art auctions

online_auctions.jpgThe ArtNet announcement that they are to shortly begin an online auction service is the latest in a string of online auction initiatives. This seems a logical move from one of the better sources of ArtWorld statistics and prices. But what does this wave of online initiatives mean for the big boys? Obviously consignors of major works will still want the profile and prestige of the established offline auction houses, Sothebys, Christies et al, but if more bread and butter work starts to go through online systems, whither then the profit margins of the major houses?

And what if the new players start to gain traction in the market place? It should be easier to track prices online in real time across a number of different online sales platforms than it is now. And of course let us not forget that the biggest benefit of online transaction systems is the better access it gives buyers to product; access when they want it. This, beyond the help it gives sellers to put works forward in convenient and price efficient form, is what decides the success or otherwise of any online sales system. And of course if middle and lower level consignors start using online channels we may get better visibility on pricing and trends in a chunk of the market that is usually hidden from public view.

It is easy to be sceptical of online transaction systems. One always assumes there are some items that people need to see or touch for themselves before committing to a purchase. I certainly felt that way when I first heard about eBay selling cars or artworks online. But look at the success they have had. This may start at the bottom end of the market but, as with so many other sectors, quality of products offered rises with reach of market. I think we are witnessing the first steps of a paradigm shift in the Art World market place.

It is also potentially another worrying development for the traditional galleries. They are already losing footfall to people who prefer to see more-work-in-less-time at the fairs and biennials. An effective new online market place could also take footfall from them (or direct it elswhere) and, potentially, encourage more bright young artists to avoid galleries and promote directly online. All such artists would need is one respected critic to validate their work and they could sell “direct from the studio”.

Interesting times. Thoughts?

10 thoughts on “Online art auctions

  1. The online auction phenomenon is already reasonably developed in the South Asian art market with the success of Saffronart. Started by a management accountant and her industrialist husband in 2000 it had overtaken Sotheby’s and Christies in volume within 5 years. Its model relied on working with galleries in India, half the buyer’s premium and a travelling exhibition of highlights from upcoming auctions. Saffronart can also be credited with democratising art auctions and encouraging new collectors intimidated by the big two auction houses. Its web-based auctions seemed much more accessible and managed to tap beyond existing auction-goers to the e-Bay crowd.

    The second point about the existential threat to galleries is a live concern and was the subject of a panel discussion in the current issue of Bidoun magazine (disclosure — I was one of the panelists). Net net – if galleries are doing more than just selling work they will continue to have a valuable role. But as a price discovery mechanism, online auctions are far more attractive.

  2. For “price discovery”, for the easy and democratic dissemination of data, an online platform cannot be beat. And certainly online auctions will first find application in emerging markets and at lower price ranges.

    But is this why the upper echelon trek to Christie’s and Sotheby’s? They want to buy and sell, of course, but also crave the pomp and circumstance, the phalanx of well dressed personnel on the phones fielding bids, the stiff armed gestures and plummy English intonations of the auctioneers, the ejaculatory bang of the gavel after the requisite foreplay. Most of all: the ability to size up one’s peer group, to compete in real space and real time, to prevail in this heady, “real” arena. This latter aspect — call it the big tent syndrome or the panopticon — is also why art fairs have become so successful. The “big boys” might be happy to make loads of money trading stocks and pork bellies online, but when it comes to their snob investments, art being a prime example, they want to preen and to visibly conquer.

    Let’s face it: online is ultimately for nerds, for the Walter Mittys. You can do it in your pajamas. Your screen avatar might be able to rape and pillage all through the cybersphere, but the virtual bubble will eventually burst.

    Regarding Ian’s last point on the galleries, I think viewing a large amount of one artist’s work, over time, either in a studio or gallery situation, remains the paradigm for connoisseurship. It is this sort of intimate exposure that leads to understanding and appreciation, that creates a passionate and informed basis for collecting. Technology might seem to quicken the process, to create a virtual alternative, but hopefully the time tested model of engaging all five senses, in real time and real space, will prevail.

  3. Hmmm. When people buy they sometimes want the profile for ego. But when they sell, anonimity is often welcome; they then just want the best price. So let us see how the online markets develop. I wouldn’t dismiss online so easily. As with Amazon, more than eBay, it starts with the nerds and then spreads.

    As for catering to connoisseurship in galleries: how often do we see evidence of that from buyers in the contemporary Art market space these days? It seems more about trophy buying and being seen to play the game; supported by teams of advisers, and the occasional museum hoping for the donation or loan of the piece concerned.

    At the upper end of the market, the new money goes to auctions and fairs for high profile buying. I know of one serious Chinese collector who goes to Basel to buy contemporary Chinese works he then brings back to Beijing. Why? Artist validation and provenance, at the cost of a higher price. So that leaves the galleries squeezed back down into the middle end of the market. With the online galleries and auction houses squeezing in from the bottom end of the market, today’s gallery owner had better be sure of the value he adds if he wants to hold his position, never mind build.

  4. Is it “pity the poor gallery owner” then, sandwiched between the high end of conspicuous consumption at art fairs and auction houses, and online encroachments on the lower slopes? Of course, we shouldn’t forget it is the galleries themselves making the sales at ArtBasel et al. They rent booths precisely to take advantage of “new money” and “high profile buying”, to not allow this aspect of the market to fall into other hands. Doing business at fairs is now an essential part of every gallery program.

    A relevant anecdote. John Gibson, the respected New York dealer, once told me that considering all the fairs, it was hardly necessary to maintain a permanent space in order to sell work. His “gallery” could exist by setting up shop itinerantly, from one European fair to the next. This model particularly suited his situation, as he was selling easily transportable items, installation drawings and photo documentation from earthwork artists such as Peter Hutchinson, Richard Long, Dennis Oppenheim and Robert Smithson.

    But please take note: Gibson came to this conclusion in the late 70s and early 80s (after closing his first gallery uptown), when the art fair industry was still in its pre-infancy, when there was only a tiny fraction of the current glut of fairs and other ancillary events. In this sense Gibson was quite prescient in his analysis of the market and the interplay between galleries and fairs. Still, the lure of permanence eventually became too great, and he re-opened his gallery in SoHo in 1983.

    My point? Even when an art dealer has carefully weighed and utilized the alternatives, there seems to be added value in opening a space.

  5. Steven’s example is a good one and illustrates precisely the decision making process in a gallerist’s mind: can I maintain a street presence when I am also supporting the costs of renting booths at shows and paying transport and insurance costs for all the works? Particularly when traditional footfall is falling. Remember also that the fair owners decide who gets in, and where they are placed within the fair. It is a tighter market with fewer options than, say, choosing where to open a gallery in the streets of New York. And in a fair there is a single landlord in charge. So fewer galleries get in and the fair owner decides who.

    This is a subtle but important shift in market power.

    The one saving grace for the galleries’ traditional street locations is that big art fairs require volume to make money. Any form of significant market downturn reduces the number of people that travel to the fairs, both buyers and sellers. Given the weakness of the stock markets of the last few months, it will be intersting to see how the fairs fare over the next 18 months.

    Interestingly, to return to the subject at the start of this thread, the same market downturn might turn out to be a boon for the new online auction houses as those owners who have stretched to acquire works quietly offload to raise cash…

  6. On this morning after Oscar night, it may be worth making an analogy to the movies to seek clues about what art businesses can do as they face the challenge of online competitors.

    The answer to easy rentals, huge plasma screens, and “theater-quality” sound has been the enhancement of the cinema-going experience. The latest upgrades at your local cineplex may include plush seats that call to mind first-class airline cabins, decent food delivered to your aisle, and, not least, alcohol. Another analogy is to casinos. Sure, you can gamble online. But wouldn’t most people rather do it in a room that resembles the set of a James Bond movie?

    Experience design is the weapon of localism against an increasingly networked world. I predict a rise in the experiential value of both gallery and auction environments in the future.

  7. Surround sound and stadium seating at your local Gagosian multiplex? Mikes embedded in the formaldehyde tank at the Met in case Hirst’s shark decides to emit some postmortem gas? Stunt motorcycles at the Armory belching exhaust fumes while carving wheelies into the Masonite? Oh wait, the latter has been tried already.

    To witness the apotheosis of the Society of the Spectacle, look no further than the current exhibition at the Guggenheim: a real crowd pleaser, an entertainment extravaganza with the highest production values, brought to us by former stage designer Cai Guo-Qiang. Is he the Michael Bay of the art world’s international traveling circus? Is the work a tad hollow and conceptually obvious? Never you mind. Behold exploding cars somersaulting up the rotunda, Matrix-style! Confront the imperialist running wolf lackeys of the new Chinese hegemony as they bash smack-dab into a glass wall! Relish the contortions of the paper tigers of bourgeois oppression as they are shot through with arrows! Float down a Fun House canal in a yak-skin boat, viewing the history of Cai at every twist and turn! Learn to embrace the mystical transience of gunpowder! See and hear things that go bang in the night (and day)!

    The title of the show, I Want to Believe, is used with the permission of Twentieth Century Fox, but we are clearly in the province of Disneyland. It seems Krens was right all along! Biff! Bang! Pow!

  8. Well, I wasn’t quite thinking that theatrically — though the point is well taken. Much ink has been spilled in recent years on the pros and cons of entertainment and experience design in the museum field.

    I’m talking about “experientializing” the venue of art sales, as a hedge against the depersonalized and placeless feeling of buying art online.

    Auctions used to be humdrum affairs, but that has been changing as they were opened up to the retail trade. White cube galleries aren’t exactly the most accommodating of environments (although there is undeniably a peculiar mystique to these sterile spaces), yet there are signs that some dealers are experimenting with new models. Back rooms are starting to get pretty plush. One of my students wrote a fascinating thesis on gallery design, pointing to lessons that dealers may learn (god forbid) from luxury goods retailers.

    The point is that in the broader world, the rise of online commerce has been linked to the emergence of the most fantastic, alluring, theatrical, high-concept “brick and mortar” architecture and design. The art world isn’t immune to these trends.

  9. Galleries can’t afford to waste time worrying about such developments. Fighting them is like yelling at the tide…it’s gonna come in anyway. Galleries will benefit from these online auctions perhaps more than anyone else, I predict.

    The main “added value” in opening a space remains context. First, whether we’re talking video or sculpture or paintings, there’s no substitute for experiencing artwork first hand in a carefully considered installation. Sure you might snap up any, oh say, John Currin you can get your hands on sight unseen, but when it finally arrives and you unpack it and see it in real life for the first time, you may not feel as strongly about it as you did seeing it online. And what a pity, given how much it cost you.

    Secondly, a great review is only one fraction of what drives collectors toward new artists. The fact that Gallery X gives some fresh face its stamp of approval is probably more important to many collectors. I know there’s lots of chatter about new collectors resenting the power the galleries wield with regard to where they stand in a waiting list (most good galleries I know actually offer work “first come, first serve,” so such resentment reveals nothing so much as a large degree of self-entitlement if you ask me), but even the most cold-hearted speculator can come around to see the value of having THE experts on the work of an artist they wish to acquire working with them in making their purchasing decisions. Getting that second-rate piece at auction will never be as satisfying as the day a gallery secures the true gem for you.

  10. Good comments Ed. Though I would suggest planning isn’t the same as worrying, and the latter is rarely helpful in any situation. But you, of course, are describing the attitude and approach of a top class gallery. One that earns the respect of both the artists it represents and of its buy-side clients. Such respect underpins their value. Sadly I do not think that this is representative of galleries in general.

    It is the lesser galleries that will suffer most with new avenues to purchase art opening up. And you may be right that the better galleries will do fine as more people are exposed to work and ideas. But there are bound to be adjustments at the margin for all. Even in these boomtime days, there are only so many buying dollars to go around.

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