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Is the Art Market Slowing Down?

May 27, 2016
Web journalist, coffee junkie and art fanatic. Cares about the environment, writes for Widewalls. Alias of Milica Jovic

In 2014, the global art market has reached its peak. Sadly the trend hasn’t lasted and 2015 saw the cooling down of the market. This trend continued in 2016 with the global record sales suffering loss comparing to the recent years. However, certain parts of the market not only show resilience but manage to grow even in this difficult situation. According to Hiscox art report, the online art sales has risen about 24 percent in 2015, and now, a more recent study by the Invaluable shows that the new generation of art buyers turns to the various social networks as the main source of discovering and buying art.

panama papers art
The Art Market, via news.vice.com

Social Networks as a Source of Buying Art

The Invaluable study shows that the millennium generation of buyers is pron to discovering new art via social media particularly Instagram. The study shows how social media edged both galleries and museums as the main places of discovering art with a 22.7% of art buyers turning to these online sources. Museums came in second on the survey with 20% while galleries only managed to attract 15.9% of millennials. The survey also shows that the majority of millennials are buying art that evokes some sort of emotion, and that they are seeing their purchases both as an investment and a unique experience. In a way, millennials turning to social media and buying art online is not surprising considering that they feel as comfortable in the virtual space as they do in reality. Experts claim that Instagram has emerged as the main way of purchasing art due to its ability to connect the artists directly with the buyers thus making the whole experience more straightforward and democratic. In a conversation with Tech.com art expert, Simon Davies stated the numerous advantages of the Instagram as a way of finding and evaluating art “without bias”. “In a sense, the platform strips away reputation and fanfare, instead forcing artists to connect with people in a visually engaging and innovative way,” Samon Davies stated for Tech.com. The expert hadn’t failed to mention another more obvious advantage of Instagram, the fact that it offers more affordable pieces to the people “whose pockets are not as deep as their enthusiasm for art.” The fact that it mainly offers works valued at $10 000 or less is a significant factor that makes the online art market more resilient than the others.

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The Hiscoxx Online Trade Report

Auction Houses Change their Policies

Though more and more art buyers turn to social media for finding art, it’s obvious that auction houses won’ t give up without a fight.The decrease in auction sales and revenues has forced the auction houses to adapt and even giants like Sotheby’s and Christie’s had reacted to the downfall by pairing expectations for the prices pieces can fetch and by lowering the fees that buyers pay. As Financial Times reports, auction house Phillips, for instance, has applied a dynamic fee for its customer that tend to lower with the higher price of the artwork. Previously the buyers who bought artworks ranging from $100,000 to $2 million had to pay a fee of 20 percent of the artwork value. Now that’s adjusted and the range has been changed to encompass the artworks with the prices between $200,000 and $3 million. The auction house has evidently decided to favor larger purchases by raising the fees for the cheaper works and lowering it for the more expensive pieces. The similar policy was established at Christie’s just before its Bound to Fall sale held earlier this month. The idea seemed to be working considering that the auction reached $67 million and that only one lot remained unsold thus making the Bound to Fall auction anything but a failure. Yet even these optimistic results seem disappointing once compared with the last years’ sale, which drew in $611m almost ten times more than this year’s auction.

Art Fairs
Galleries Only Attract 15% of Buyers

Is online trade the Future of the Art Market?

With traditional sales made by galleries and auction houses decreasing and online art market booming it seems obvious that the art market is not so much slowing down as it is merely shifting to a new model. The new generation of millennial art buyers is more comfortable buying art online and discovered new artists and offers via their computers or phones. The latest Hiscox Online Art Trade Report shows that not only the online art market grew by 24 percent in 2015 comparing to the last year but also that millennial more an more turn to the mobile phones for making their purchases. The Hiscox report states that 24% of art bids were made trough mobile devices, and a total of 32% of buyers used a tablet or mobile device to make their purchase. Will self-phones replace auction houses as the main way of purchasing art? Maybe someday, but for now both have their own specific segment of the market. While online bids cover the mid-level market, auction houses focus on the more valuable pieces. And though we shouldn’t expect any record breaking prices to be reached at auctions this year the mid-market seems alive and well and available with a click of a button.

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Sources : forbes.com, ft.com, tech.com. ; Featured image : KAWS Instagram Page