Top Three Factors Influencing Artist Markets
According to Deloitte’s Art and Finance Report, 72% of private banks and family offices said they offered art-related services last year, up from 64% in 2017. Although only 2% of collectors surveyed said they bought art purely for investment, 65% said they make purchases as collectors and investors. In other words, they buy with their heart and their head. Most art buyers not only crave a personal connection to their art but they want to know it is a sound investment, even if price is not the main driver in their decision-making process. This begs the question that many of my own clients have asked—how do you know what determines value and influences an artist’s market?
For these collectors it’s normal to be curious about an artist’s long term potential and try to understand the value of their work, especially if they own work by that artist and are paying for insurance and other maintenance fees. Determining value of an artwork is different from understanding an artist’s market. Although there is not a consensus about what exactly determines an artist’s market rise or fall, most art experts can agree on three main market influencers that can indicate the direction of an artist’s career and hence market.
Read on below!
Blockbuster museum shows and art galleries (read Yayoi Kusama) are gaining momentum, for better or worse. Super-galleries like Pace, David Zwirner and Gagosian are expanding globally and producing museum-quality shows that are on par with the MoMA, The Whitney Museum of American Art and even The Metropolitan Museum of Art. Museums which are arguably at the top of the art world food chain, continue to be the ultimate validation for any artist who can nab an enviable spot in their permanent collection. To that end, mega collectors such as the Don and Mera Rubell and Peter Brant, can also have significant impact as their collection status tends to add value, or at least sustain the market for that artist.
Therefore, gallery representation, inclusion in museum exhibitions and/or permanent collections, and generally any high level critical attention from institutions and their respective curators, can help enforce and affirm an artist’s reputation and career both in the short and long term.
Gone are the days of the artist rebel who works in solitude raging against the art machine. Subverting the gallery system and shunning any kind of commercial activity by severing all ties to the market will most definitely have a negative impact on an artist’s market or at least preclude it from growing favorably. Conversely, an artist who is has been fully embraced by the market and has one or more galleries actively supporting his or her work both locally and internationally, will have a better chance of gaining momentum than their peers. Galleries can help their artists get press and critical reviews as well as show them at art fairs, a major fixture in today’s art market. They can also help their artists land respected residencies or competitive placements in large-scale exhibitions such the Whitney Biennial or Venice Biennale. Some dealers are even seen as “market makers” where they control supply and demand and effectively manage where the market is going.
The art fair circuit alone can have a tremendous impact on an artist’s market. With tens of thousands of visitors walking through the fairs and galleries spending upwards of $100,000 for participation, artist’s can receive unparalleled exposure and recognition in one weekend. Art Basel Miami received 83,000 visitors in 2018 across a five day period including influential collectors, curators, trustees, gallery directors and patrons from over 200 leading international museums and cultural institutions. According to UBS Art Market Report, ten years ago there were fewer than 60 art fairs around the world. Today, there are over 300—an astounding proliferation and indicator of not just the rise of the art market but the importance of ACCESS to experiencing art first hand.
Lastly, auction houses and their archives of past sales results being the most reliable resource for appraising art, provide a basis for gauging different artist markets. Although not immune to popular trends, prior sales history give context for understanding the market supply and demand for a specific artist or art object. It also allows you to quantify where an artist’s market has been and where it is going.
Overall, having a presence within the commercial art market whether via a gallery, dealer or auction house as well as having a history of sales activity can validate and even predict value for a particular artist.
In 2018, 74% of online buyers bought more than one artwork online in the last twelve months, according to Hiscox’s Online Report. Furthermore, millennials (23% percent to be exact) are buying art online BEFORE they even visit a physical gallery, art fair or auction house. These staggering but not surprising statistics also reflect social media’s incredible potential and current impact on the art industry.
Instagram, the art world’s platform of choice, supports direct-to-consumer relationships between collectors and artists allowing transactions to be made directly on the app effectively removing friction from the buying process not to mention the intimidation of visiting an art gallery.
Galleries like Hauser and Wirth and White Cube, however have been quick to jump on board too and are using social media to expand their presence and increase exposure for their artists. They have witnessed a growth of art transactions originating online also among their traditionally “offline buyers”.
With the incredible amount of data being stored, analyzed and utilized by Instagram and Facebook, it is now possible to track artists of all levels and measure traction levels for relevant followers on a qualitative basis.
One such company that specializes in this is Wondeur, a data research firm. Their site states that their AI “quantifies artist’s growth, tracks evolution of value, and measures the past and future influence of museums and galleries, globally.” As data mining and AI continue to advance it’s only a matter of time before we will be able to predict who the next Warhol, Basquiat or Banksy will be.
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