Collecting, fairs and markets in the digital age
Nov 16, 2021
It's the key week. Galleries close the most important sales of the season these days. Market specialist and head of Arte Global and Red Collectors, Elisa Hernando, reviews the figures of recent years and sees a trend that is becoming more and more prevalent: the online market. The conclusion? Buying art is profitable.
In February 2012, the American collectors Dan and Mera Rubell were in Madrid for the presentation of their collection at the Banco Santander Foundation. The couple heads the Rubell Museum in Miami, which houses a collection of more than 7,000 works by some 1,000 artists, including names such as Anselm Kiefer and Richard Prince . Much of their prestige lies in their ability to detect talent in artists long before they are famous, something that happened to them with Jeff Koons . In the same way, the Rubells discovered the work of Secundino Hernández at ARCO and acquired several of his paintings. It was a comment on everyone's lips that day in the corridors of the fair and the artist was one of the most sought after by other buyers.
In 2018, Spain represented only 1% of total global art and antiques sales: 680 million euros
From that moment on, Secundino Hernández would begin his international projection , being represented by the prestigious Victoria Miró gallery in London together with Heinrich Ehrhardt in Madrid and Krizinger in Vienna. In addition to the Rubell Museum, other centres such as the KunstHalle in Helsinki, the Royal Academy in London and the YUZ Museum in Shanghai have shown his works in exhibitions. In the years following the Rubell purchase in Madrid, the artist's economic value would progressively increase. If in 2014 a 200 x 180 cm canvas was sold at auction for 14,000 euros, five years later, a similar painting was sold at auction at Sotheby's London for the sum of 76,000 euros. From a quantitative point of view, according to the Artfacts.net ranking, which analyses the positioning of artists based on their career in both prestigious exhibitions and their presence in important collections, Secundino Hernández has moved from position 22,000 to position 3,249 in the last decade.
The quality of the speech
In today's globalized art market, the interaction of different agents or influencers in the sector often determines the promotion, dissemination and internationalization of artists. The responsibility for this support must be related to the quality of the discourse, since its artistic value lies in factors such as language, the capacity for innovation and the influence on other creators.
In this framework of the international art market, fairs play a fundamental role: they are the main sales and information exchange channel for galleries and a driving force for the economy of the city that hosts them. These events attract a large volume of visitors, as in the case of ARCO, which in 2018 had 100,000 people; Art Basel, 95,000; and FIAC, 75,000, according to Arts Economics.
The volume of global art and antiques sales in 2018 was 68 billion dollars. Of these, 54% (36.72 billion) was through art galleries and 46% (31.28 billion) in auction sales. Of these figures, 84% of the total transactions were made in three specific geographical areas: the United States (44%), the United Kingdom (21%) and China (19%). This is no coincidence, since the most important fairs in the world (Art Basel, Frieze) are held in cities such as Miami, New York, London or Hong Kong, as are the most promising auctions by Christie's, Sotheby's or Phillips de Pury (ArtsEconomics).
In terms of our country, Spain represented only 1% of total art and antiques sales in 2018, i.e. 680 million euros , which represents an 11% increase in the year-on-year value since 2008. Fairs such as ARCO are essential for galleries: in 2016 they represented 41% of their sales, a figure that has increased by 35% since 2013. From the perspective of Spanish auction houses, in 2016 around 74.9 million euros were reached between public auctions, online and private sales, however, this figure represented a decrease of 10% in the period from 2008 to 2016 (Fundación Arte y Mecenazgo).
If 100 euros had been invested in a work of art in 2000, in 2018 it would be worth 190 euros, an increase of 90%
The peculiarities of the art market make it difficult to analyse the investment and profitability of artistic objects using the same parameters as in the financial or real estate sector. It is necessary to take into account what collectors value and that the acquisition of works of art is not done with the intention of selling them, a sine qua non condition if we think of investment. In art, enjoyment and possession are paramount, but collectors especially value the revaluation of artists and works as a legacy.
Can we then analyse art from the perspective of investment? According to the Artprice website, which exclusively analyses auction prices around the world, if 100 euros had been invested in a work of art in 2000, in 2018 it would have been worth 190 euros , i.e. an increase of 90%. Artprice publishes its index in comparison with the SP500 (New York Stock Exchange index where the 500 largest companies are listed), where the better performance of art in terms of volatility and profitability is clearly evident.
Buy art online
In recent years, the proliferation of online art platforms is becoming a new sales channel for galleries and auctions . According to the Hiscox report on the online art market, in 2018, $4.636 billion worth of art was sold online , which is a significant increase compared to the $1.507 billion in 2013.
In 2018, Professor Claire McAndrew surveyed HNWI (high net worth individual) collectors to determine the average value of an item purchased online . In the UK, 74% of collectors said the average value was $10,000, while in Germany, the highest percentage of collectors had purchased items worth between $10,000 and $50,000, with 5% even confirming that they had purchased online items worth over $1 million – a similar trend to collectors in Hong Kong.
The proliferation of digital platforms responds to new generations who are more digitally native and who do everything online , watch Netflix, shop on Amazon, flirt on Tinder and, why not, buy art. Some platforms such as Artnet give access to art galleries for sale, others offer both gallery works and auctions, as is the case of the most famous Artsy . There are those that are exclusively specialized in auctions such as Paddle8, without forgetting the pioneer launched by the Saatchi gallery that directly sells works by artists from all over the world.
Technology is here to stay and will increasingly become a driving force for sales for galleries, fairs and auctions. Little by little, new technological developments are being incorporated into the market, such as the use of Blockchain, which allows transactions to be verified and will eliminate problems of provenance or falsification of works of art, although digital will never be able to compete with the physical experience of seeing and feeling the works, or will it?
