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When the Fine Art Market Goes Online

By   /   April 17, 2015  /   No Comments

Original article from the New York Times nytimes.com

LONDON — Is 2015 going to be the year in which the art market — or at least a sizeable chunk of it — finally goes digital?

Unlike recorded music and books, which are now bought routinely by millions of people from websites, fine art has proved stubbornly resistant to the march of e-commerce. At least so it would seem from the statistics. Online transactions contributed 6 percent of the record 51 billion euros, or about $59 billion, of art sold by auction houses and dealers in 2014, according to a report published on March 11 by the Netherlands-basedEuropean Fine Art Foundation.

The art market is an extension of the luxury goods industry, which, with its relatively high prices and expensive-to-run stores, has had an openly King Canute-like resistance to online sales. McKinsey & Company said in a report last April that e-commerce represented just 4 percent of all the luxury goods sold in 2013. Even so, McKinsey added that sales in the online luxury sector were growing at least twice as fast as their offline equivalents.  

A work by Christopher Wool for the online selling exhibition ‘‘Open Source: Art at the Eclipse of Capitalism.’’CreditPhotograph by Florian Kleinefenn, courtesy of Christopher Wool, Luhring Augustine Gallery and Galerie Max Hetzler, Berlin and Paris

 

“The fact that artworks are essentially unique and value is also determined by aspects such as their condition and provenance also sets them apart from luxuries, which are, in many cases, newly manufactured goods,” said the report by the European Fine Art Foundation, also known as Tefaf.

Most buyers of valuable art understandably feel the need to personally view a work before making a purchase. The art market is dominated by the ever-higher prices paid at Sotheby’s and Christie’s by offline bidders for status-enhancing paintings by trophy names such as Gerhard Richter, Andy Warhol, Jean-Michel Basquiat and Christopher Wool. Works priced at more than €1 million accounted for 48 percent of the value of the auction market in 2014, yet they represented less than 0.5 percent of the transactions, according to Tefaf.

The submerged iceberg of high-volume, lower-value art sales has become a main growth area for online commerce and the venture capitalization that comes with it. There are now more than 40 specialist dot-com companies selling or facilitating the sale of artworks, primarily in the $1,000 to $50,000 range. And those sales are growing.

The art market industry analysts at Skate’s pointed out in their latest art e-commerce report that the world’s four leading online-only auctioneers — Auctionata, Paddle8, christies.com/onlineonly and Artnet Auctions — saw an average 109 percent increase in sales in 2014. Buyers and sellers are becoming more comfortable about online auctions, particularly as commission rates tend to be lower than at their bricks-and-mortar equivalents. That said, Skate’s calculated the total 2014 sales of those four online auctioneers to be $142.2 million — less than the price paid for one Francis Bacon triptych at a Christie’s live auction in November 2013.

Sotheby’s, unlike Christie’s, has not invested in its own online-only sales and is trying to increase lower-value auctions. On Tuesday, a day after it announced the appointment of its new chief executive, Tad Smith, the former president of the Madison Square Garden Company, Sotheby’s released the long-awaited details of its new partnership with the online retailer eBay.

Read the full original article by Scott Reyburn on nytimes.com

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