In pictures: Art Basel in Miami Beach’s Meridians section features big works tackling big topics
December 8, 2023
An acerbic but highly readable view of the British art world
December 10, 2023
In pictures: Art Basel in Miami Beach’s Meridians section features big works tackling big topics
December 8, 2023
An acerbic but highly readable view of the British art world
December 10, 2023

Art Basel and UBS recently issued their latest annual Survey of Global Collecting, which analyses the habits and attitudes of more than 2,800 high-net-worth individuals (HNWIs) across the world. These affluent clients, who each have more than $1m of disposable wealth (excluding real estate and private business assets), keep the art trade bubbling, as the high end of the market was “key to maintaining aggregate growth” in 2022, according to the report. For auction houses and dealers, “the $1m-plus segment tended to fare better than other lower-price tiers”, it states.

However, among the survey’s findings is the cautionary note that, in the first half of 2023, only 9% of these wealthy respondents considered buying works priced at more than $1m, down from 12% in 2021. This decrease points to an “increasingly thin high-end following the strong post-Covid-19 bounce-back in sales”.

The most recent Art Basel and UBS Art Market report, which offers a wider view of the industry, estimates that the art trade last year turned over about $67.8bn in sales, about 5% more (discounting inflation) than its estimated $64.6bn turnover in 2011, when the market had recovered from the 2008 financial crisis.

The key indicator of health in the international art market, as in national economies, is growth. Yet the art trade is a relatively small global business in which sales have, by and large, flatlined for the past 11 years. Given that the population of the world’s HNWIs has more than doubled since 2011, according to UBS data, why is this the case?

Clare McAndrew, the economist who prepares the Art Basel and UBS reports, says that last year was “a very clear example of the high end carrying the rest of the market—but then we got this quite subdued result overall”. McAndrew adds that, although no one seems to know how many of the world’s 59.4 million millionaires and 2,640 billionaires regularly buy art, the number is “relatively small, so a widening of interest and spending across all segments would certainly mean more substantial growth”.

In other words, aggregate sales struggle to grow because the international art market has become over-reliant on a niche group of ultra-wealthy buyers. Significant growth could, theoretically, be achieved if the customer base expanded and individuals of more modest means bought lower-priced items in “scalable” quantities, as is the case in the $355bn luxury industry.

But how can that happen when the research of distinguished economists such as Thomas Piketty, Paul Krugman and Branco Milanović tells us that the middle classes in high-income nations are being squeezed by the forces of global income inequality, as more and more wealth is being concentrated in the hands of the 0.1% and 0.01%?

Bottom-up alternatives

Unlike the art spending of the wealthy, the buying patterns of “professional class” collectors attract relatively little systematic study. But anecdotal evidence of shrinkage abounds in the art and collectibles markets.

“I remember one time, about 15 years ago, at Tefaf Maastricht, we wrote 81 invoices. This year, we did the same turnover, a little more even, and wrote five [invoices],” says the London-based antique map dealer Daniel Crouch. His experience exemplifies the much-heard observation among today’s art and antiques dealers that buyers are fewer but buy at higher price levels.

Yet other, younger players are aiming to reinvigorate the market from the bottom up, to try to democratise the ownership of high-quality art by serious practitioners. The Amsterdam-based online marketplace Avant Arte, for instance, has collaborated with contemporary artists since 2017 to produce affordable editioned prints and sculptural multiples. Begun as a blog in 2014 by 20-somethings Christian Luiten and Curtis Penning, Avant Arte now has 2.6 million followers on Instagram and has worked with 241 artists to date, including big names such as Ai Weiwei, Elizabeth Peyton, Jenny Holzer and Tschabalala Self. The company has sold more than 22,000 of its editioned works, says an Avant Arte spokesperson.

“The imbalance for me was that art can have a profound impact on people, intellectually and emotionally. And yet when you look at it next to music or fashion or other areas of culture that have built a much more democratic base, the breadth of impact is nowhere,” says Mazdak Sanii, the chief executive of Avant Arte, who, like Luiten and Penning, transitioned into contemporary art from the popular music scene.

Avant Arte recently surveyed what it calls its “new generation” buyers and found that 90% of respondents, more than half of whom are under 40, “didn’t find the art world welcoming”, says Sanii. “These younger collectors are going to provide at least part of the answer,” he adds, noting that the average price of an Avant Arte print is about €2,000.

Although prints have been democratising good art for centuries, Phillips New York gave this subset of the market a boost 15 years ago when it cannily rebranded prints by popular artists such as Warhol, Hockney, Hirst and Banksy as cooler-sounding “editions”, echoing the must-have limited offerings of the luxury industry. From 2008 to 2023, Phillips’s annual turnover in its worldwide Editions auctions increased by 827%. Last year, the department achieved sales of $40m, up almost 30% on 2022.

Other auction houses and companies like Avant Arte have followed Phillips in rebranding prints as editions. It seems the bigger challenge, given the prevalent perception of the art world as socially and financially intimidating, is how to encourage a wider audience to buy unique pieces.

At the rock-bottom price point of £200 or lower, the Instagram-based Artist Support Pledge (ASP) has proved a game-changer since its launch by the Sussex-based painter Matthew Burrows at the beginning of the Covid-19 pandemic in March 2020. The platform has posted more than one million original works since then, resulting in estimated sales of about £100m, according to Burrows. But he adds that turnover has slowed since the ebbing of the pandemic.

“The good news is that the Artist Support Pledge is expanding,” says Burrows. ASP is now working with the tech company Vortic to create a virtual gallery in which artists can show works of any value in their own dedicated exhibition space, provided they also post works on the original ASP site. The initiative is due to go live early next year. “The new platform is designed to give artists more autonomy in how and when their work is presented for sale while maintaining the ethos of a reciprocal economy,” adds Burrows.

Attracting new generations

At the same time, brick-and-mortar galleries are also doing their best to encourage a new generation of young professionals to buy original contemporary art. South London-based Copperfield is one of the many galleries now offering generous pay-by-installment terms to buyers who cannot afford to splash thousands in one go.

“One person quit their gym and used that amount to pay off monthly a small work by Larry Achiampong, while they took to running in the park,” says Copperfield director Will Lunn. “That work was really meaningful to them, and we were really pleased to make it possible.”

But can these sorts of lower-price initiatives really revive the international art trade’s moribund middle market in the way that, say, perfume has bolstered the luxury and beauty industries? According to the business data company Statista, worldwide sales in the fragrances market are set to hit $58.3bn in 2023—not far off Art Basel and UBS’s annual sales estimates for the entire global art market since 2011. Sales of the legendary Chanel No.5 accounted for about one-third of Chanel’s $12.3bn revenue in 2021, the perfume’s 100th anniversary, according to the Financial Times. A 35ml bottle currently sells for around £71, considerably less than even a £200 unique work from the Artist Support Pledge.

“The brand name is one of the most powerful assets for the luxury house,” says Kelly Meng Parnwell, a lecturer in luxury brand management at Goldsmiths, University of London. “Consumers buy lower-valued products with a luxury logo, not for the product’s aesthetic value, but for the social value that luxury brands can provide to them.”

Herein lies the problem for the art market’s “affordable” end. In relative terms, works by an interesting if little-known artist priced in the low thousands, or even the hundreds, can seem good value. But in a cash-strapped consumer culture dominated by luxury brands, if you can buy a legend for £71, pretty well all art looks expensive.

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