Monday, January 22, 2007

What They're Willing to Pay (and how that applies, or doesn't, to emerging art)

Working with emerging artists, I explain my thinking on pricing on a regular basis, so it's always something I'm looking for confirmation on or reasons to reassess. In a nutshell, I believe it's a good idea to keep prices attractively low until there's a constant demand for the work. Once there is a constant demand, the prices can rise steadily and carefully, and no one will have to wonder down the road what might have been if the market dries up (i.e., if prices rise too quickly and the market dries up, that might be the sole by not raising them too quickly, you take that out of the equation).

Anyway, I note this as introduction to the fascinating article in ArtNews about the astronomical rise in prices of Klimt's work lately. After a thorough history of how several of Klimt's major works recently became available, the article delves into the very mixed assessements on whether Klimt is good enough to warrant the records prices. Even Ronald Lauder, who reportedly paid $135 million for Portrait of Adele Bloch-Bauer I last June, seems to have been among the sceptics until recently:

In 1997 the record for Klimt hit £14.5 million ($23.5 million) at Christie’s London. At the time, amid speculation that Lauder was the buyer of Kammer Castle on the Attersee II, he issued a statement to the ARTnewsletter through his curator, Elizabeth Kujawski: “This is an artificial market created by one person who has bought the last three Klimts at auction. In all cases the values of the paintings were only half of what they sold for. The average price of a Klimt should be $6 million to $7 million.”

Asked about this recently, Lauder said that he had been concerned that two collectors fighting for Klimt’s work were driving prices to irrational heights. Of the price he reportedly paid for Adele I, he says, “I didn’t even think of that. I knew there was nobody who wanted the painting more than me.”
Taking Mr. Lauder at his word, then, the $135 million illustrates the widely debated concept that any given work of art is worth what someone is willing to pay for it. I mean, it's not at all likely that Mr. Lauder, after being on record in 1997 as noting that the average price of Klimit should be $7 million, would now, only a decade later, argue that the average price should be $135 million. His agreement to pay that price seems to single out Adele I as better than the average Klimt.

Conventional wisdom would seem to say that by paying more for Adele I than anyone has knowingly ever paid for any other painting in history, Mr. Lauder raised the prices of all Klimts considerably, but that may not be the case:

Nicholas Maclean, a New York dealer and former co-head of Christie’s Impressionist and modern art department, says of Adele I, “We’ve never seen a Secession picture take a price like this, but it’s driven by a number of things. Great pictures find themselves in a different price bracket—in some cases they can be worth 1,000 percent more than a good work by the same artist.” He adds: “What would van Gogh’s Dr. Gachet get if it came up at auction today?”
So great works can be worth 1,000 percent more than an average work by the same artist. This, of course, throws a wrench into my arguments on pricing work by emerging artists. What if an artist knows that one particular piece is the best work they've ever done...should they insist its price be higher than their other work? And, conversely, just because the market goes nuts for one particular piece by an emerging artist, does that mean that the price of all subsequent work should be higher? What if that one piece is the one true gem and the later work not quite so?

In general I think it's difficult to apply so directly the rules of the secondary market to the emerging art market. There's been a steady worldwide increase in interest in Klimt since the 1980s, making the demand for his work rise while the supply can only do so in spurts. (An interesting sidebar in the ArtNews article is how prices will rise on the secondary market if a good chunk of work becomes available all at once, as opposed to if works become available too infrequently, explaining why Klimt's prices have soared but the more critcally acclaimed Oskar Kokoschka's haven't:

Meanwhile, [David] Norman [head of the Impressionist and modern art department at Sotheby’s] points out, sales of Kokoschka oils have also been infrequent, with the record price of $2.97 million established more than 15 years ago. “So little has come on the market in recent years,” he says. “You need the right combination of rarity and supply to really maintain and move a market.” [emphasis mine]
Again, because it's difficult to apply the way the secondary market works to the emerging art market, in general, I stand by my guideline for pricing the work of emerging artists: keep the prices attractively low until there's a steady demand and then raise them steadily and carefully. This assumes of course that all ships rise with the tide, meaning if the average price of other works by emerging artists (without waiting lists) are rising over time, so should yours.

Of course, at this point in such discussions someone invariably notes how this seems unfair to artists, because everyone else stands to make a killing off their early great works except them. One way emerging artists can ensure they're not being taken advantage of through all this (and I recommend this to every working artist out there) is to keep back very good pieces (at least one a year) for yourself. If the pressure to produce more work seems too great to do this, consider sending one great piece a year off to live with a friend or relative with instructions not to let you take it back for at least x number of years. That is, get them out of your studio or home where curators/dealers/collectors might see them and pressure you to sell (don't hate them for that, btw...that's their role in all this). Or, better yet, if you can, just let everyone know that you're keeping that one for yourself. If they object, just calmly explain why you're doing it and note that you'd rather they not pressure you to sell it. If they still do, after that, just smile and change the subject, or consider whether you really need to work with them. Look at it as an investment in your future and you'll see that you're right and they're not.

Don't take this too far though. You do want some of your best work out there selling your other work for you.


Anonymous bnon said...

This is a tangent, but Edward, I'm wondering what you think is the key to selling emerging artists's work. Is it soley quality? Is it, for want of a better word, it's desirabilty (which may or may not have to do with quality)? Is it the personality of the artist? The dealer? Connections? Hitting the right fashion moment? I'd be interested in any ideas you have about this.

1/22/2007 11:19:00 AM  
Blogger burrito brother said...

I think an "emerging" artist should price his/her work relative to his/her direct contemporaries, taking into account age, number of shows (amount of exposure), and to some degree, desirability (that is, if you really can't keep the works in stock, they HAVE to be priced higher, a rarity.) But I don't think "emerging artists" or even mid-career should price there work lower if they're not regularly selling, nor should they price works differently b/c of the quality. I think a lot less art would be sold if there was a public admission of which works were thought to be "the best". Hence the pricing by size, which seems ridiculous, but maybe is really the best deal for the artist...

1/22/2007 11:44:00 AM  
Blogger Edward_ said...

that could be a whole other post, bnon, but in general there are two ways emerging art sells: 1) it predominantly sells itself (i.e., there's a market for it, due to fashion, buzz, and other things any given dealer may or may not have had a direct hand in creating) or 2) it sells the hard way (i.e., there's a long conversation between the dealer and the collector, over time, about why this work is worthy of their collection). As a dealer the second way is more satisfying, but the first is more exciting, so...

From the artist point of view, being in the right place at the right time with regards to art history plays a very big role I think, but there are other things artists can do to help, namely raise your name recognition by being involved in the art world in other ways. Curate, write, blog, etc.

If there's one key to selling emerging artists work (after simply drop-dead awesome work) it's name recognition. Folks will stop and look longer if they think other folks are talking about someone. So get your name out there.

burrito brothers, I agree that mid-career artists shouldn't price their work too low, but I've seen the wisdom of emerging artists pricing their work competitively work so well that I'll disagree with you. Other than obviously extraordinary work and name recognition, what sells emerging art is the idea that it's a bargain. That works in the artist's favor once they have a waiting list though (nothing sells work like a well-known collector putting it up in their home, and many such collectors are looking for those underpriced gems).

The only advantage to pricing work by an unknown emerging artist at the level of their better selling peers that I can see is to feed the unknown artist's ego. I think the unknown artists willing to let their prices be lower in the beginning will be rewarded in the long run. I've seen it happen again and again.

1/22/2007 12:04:00 PM  
Blogger Edward_ said...

sorry for the "s" on brother, bb...there's a restaruant by that name in NYC...just flowed through my subconscience, out of the keyboard that way.

1/22/2007 12:05:00 PM  
Blogger Tim said...

I think Lauder was willing to pay that much for Adele because he wanted to re-position Klimt in the history books. It is an effort to shape the history of art. Once you have enough money your interest turns to such things (apparently.) Getty and Hammer both (seemed) to want to turn back the clock on art when they were alive, buying and promoting conservative or old master work with the idea that Modernism could be un-done. It is only after they are gone and their legacy gets into the hands of art professionals that this part of their program gets, justifiably, shelved. Lauder is trying to put art back into the hands of 'society,' and return artists to the role of sycophantic portraitists.

1/22/2007 12:20:00 PM  
Blogger Tim said...

It is an awesome painting, though.

1/22/2007 12:22:00 PM  
Anonymous Ethan Ham said...

I think Lauder was willing to pay that much for Adele because he wanted to re-position Klimt in the history books.

The price was also great PR for the Neue Gallery... it assured that Adele would be an anchoring piece of work for the museum and that everyone would know about it.

In fact, I could imagine a situation where the buyer would want to pay a bit more than necessary simply to get the bragging rights of "most expensive painting in the world."

1/22/2007 12:46:00 PM  
Anonymous Anonymous said...

Some artists invite insanity in pricing, too. I mean, if I had the money, I'd buy a Klimt. I love love love Klimt. I'd pay any amount (again, if I had it) for a Rousseau, too. And my wife would for a Pollock. But Picasso, Gauguin, Matisse? We'd probably be more rational about it.

Of course, the superrich aren't really human, so who can say what goes through their alien minds?

1/22/2007 12:47:00 PM  
Anonymous Anonymous said...

Is there any truth to the idea that if an emerging artist prices her work higher, collectors, dealers, curators will believe the work has more value?

For a nauseating portrait of Lauder, see The New Yorker article "An Acquiring Eye," January 10 (?) 2007.

1/22/2007 01:34:00 PM  
Blogger Edward_ said...

Is there any truth to the idea that if an emerging artist prices her work higher, collectors, dealers, curators will believe the work has more value?

I've heard that a lot from artists, but never from a collector...not even my collector friends who would tell me if they thought that was the case. In my experience, most smart collectors believe they can tell the value of something (and usually they can...because they're comparing prices all the time) and assume the gallery has it underpriced so it will sell. Which often times it will if that's the case.

The idea is to get the work out there.

1/22/2007 02:00:00 PM  
Anonymous Anonymous said...

Well, I don't think any piece of art should be charging a million dollars. It's ridiculous, it's art.

I wonder could we ask...who is art for?

Why not price it according to who it is for?

If an artist has a commitment to sell their art to a rich collector, well go for it. If an artist would like anyone to own art and have art in their home...then compete with "warehouse furniture" stores and their crappy factory least compete with them.

Look, I love art and painting etc...but charging and selling paintings for millions of dollars? It's completely embarrassing and ridiculous and begs the question: has art become like oil? We charge a million dollars? Well, will we go to war for it? Will we kill someone else for the art?

For the most part we should be laughing when we hear of Klimt and all going for such ludicrous prices.

Poor ol Van Gogh would have given his paintings away for a drink. I'd love to see an artist today who would be pleased to see their work hanging in the home of a working class family.

By the way, here is what Robert Hughes had to say about the Klimt sale back in October:

ON MONEY: "The stuff I can't stand is that reverential poppycock churned out by people who still believe that the price of a work somehow enhances it as an object. It's just a lie. It removes the work of art from the common frame of understanding and discourse. It makes to into a fetish object. It kills it.

"No ordinary person can look at (the $150 million [Canadian] paid recently for Gustav Klimt's Adele Bloch-Bauer 1 [1907] by cosmetic magnate Ronald Lauder) without loathing (the painting). Obviously, I don't want to go out and attack the Klimt with an axe. But I think it's obscene. Maybe it's the main kind of cultural pornography."

1/22/2007 02:14:00 PM  
Anonymous Anonymous said...

(p.s. Edward, check out the enthusiastic invitation in the comments section of your previous post about visiting Chicago)

1/22/2007 02:27:00 PM  
Blogger Edward_ said...

Thanks so much for the generous offer Candy. Let's talk at the opening. Our trip includes about a half dozen appointments (including dinner after the opening), but we'll be gallery hopping later and something might work out.


1/22/2007 02:34:00 PM  
Blogger burrito brother said...

I wish I was privy to this thread LAST week BEFORE I priced my show... ;)
Thanks Ed.

1/22/2007 03:21:00 PM  
Anonymous Anonymous said...

The whole pricing thing is especially difficult for a midcareer artist who is not 'hot'..

It seems wrong to price their work the same as the emerging artist, yet you can't say there's a 'hot market' when there isn't. A market, yes, but hot, no.

Also, when does someone stop being an 'emerging artist'...?

1/22/2007 03:22:00 PM  
Anonymous Anonymous said...

Candy Minx sez:
If an artist would like anyone to own art and have art in their home...then compete with "warehouse furniture" stores and their crappy factory least compete with them.

I've written something similar in the past -- why can everyone have a Thomas McKnight poster but no one can buy original art? -- but the holes in that idea are enormous. For one thing, a single human being can only paint so fast. Even when I was at my fastest drawing stage, I was only doing ten or twenty a day, and posting them on eBay and getting them mailed ate up a goodly amount of time for only a sale or two a week.

For another, of course, a whole painting costs a lot more than even cheap factory decorations in materials alone. These days one of my paintings costs around a hundred dollars to make. Add in marketing, shipping, overhead -- after a bit it just can't be cheap enough. It's like trying to sell handmade cars and competing with GM.

Still, I sold about two hundred drawings over eBay, and few things in my life -- and nothing in the art world -- have given me anywhere near that sense of accomplishment.

John Noble, an artist local to Staten Island, used to trade his lithographs for drinks and food. Some of those lithos literally ended up as fishwrap. Lithographs were Noble's main medium because he wanted anyone to be able to own his work. A fantastic sentiment -- and now I own a Noble litho.

1/22/2007 03:42:00 PM  
Blogger Edward_ said...

Also, when does someone stop being an 'emerging artist'...?

That question has come up repeatedly lately. I'm going ponder on it a day or two, ask around, and then offer my thoughts on it in a post later.

What do you think though? Are there realworld metrics on this?

1/22/2007 03:54:00 PM  
Anonymous Anonymous said...

Sorry, I just stuck my elbow through the Klimt.
Can you help me fix it?

Love, Steve Wynn

"You break it, you buy it.
For $45 million or so..."

1/22/2007 05:17:00 PM  
Anonymous Cedric Caspesyan said...


I'm not very attracted by the idea of Mr. Rich holding a copy of what I do in their living room, and all other people must go to the gallery website and hope to find a little JPEG.

So basically I think I should try do something else than art.

And by the way, participating in a reality show is how you get an emerging artist be known and raise their prices.


Cedric Poppadum

1/23/2007 06:22:00 AM  
Anonymous bnon said...

Thanks for addressing my tangent. I'd love to hear more and have a separate discussion on how you sell art by relative unknowns. I'm taking to heart your idea about writing, blogging, getting the name out because I love to write. I should probably blog, but I find my somewhat retiring personality keeps its shape even wrting on the web to people I don't know and haven't met.

1/23/2007 09:31:00 AM  
Anonymous Anonymous said...

Of course, if you ask the gallerist who blogs how to start an art career, he's going to tell you to blog. I bet if you asked a gallerist who gardens how to start an art career, they'd tell you to buy yourself some decorative plants.

1/23/2007 10:50:00 AM  
Anonymous Marc Spiegler said...

You ask: "What if an artist knows that one particular piece is the best work they've ever done... should they insist its price be higher than their other work?" Yet, paradoxically enough, quality is never (or at least, super-rarely) a criteria used to set prices for primary-market works in gallery shows. Rather, works by the same artist in the same show from roughly the same period are comparatively priced against each other based upon some combination of size and production cost. Why? Because it's counterproductive for dealers to so publicy signal which pieces are the "best" ones in any particular show. Who would buy the "also-rans"? Especially in a market so driven by competiton between those who know they have far more money than taste.

Which means that the place where quality first starts figuring into pricing is in the secondary and auction markets. Weird, huh? Wish I could take credit for this apercu, but it's from Olav Velthuis'"Talking Prices: Symbolic Meanings of Prices on the Market for Contemporary Art," a solid source of such odd insights.

1/23/2007 09:43:00 PM  
Anonymous Anonymous said...

Good paintings always allow great paintings to stand out. So then the great ones get bought first. When all the paintings are great, the first ones sold are subjectively the best. The one that is sold last is still a good painting. The one that won't sold is the one on my wall at home, which is the greatest one so far!

1/23/2007 10:48:00 PM  
Blogger Edward_ said...

Thanks for the tip, Marc...I'll look up Velthuis's text.

1/24/2007 09:03:00 AM  
Anonymous Paula said...

what is too expensive for an emerging artist who is making mixed media pieces that are midsized? (23"-29" for example). What are we talking in dollars?
I remember reading that any serious collector, should they see something they like for under 3 or 5k? should just enjoy it and not have hopes for the work ever being worth anything.
Do you consider $400-800 too much?
$1200? Where do you personally draw the line for work being priced too high?
thanks, would love to see a number.


1/26/2007 05:56:00 PM  
Blogger Edward_ said...

Where do you personally draw the line for work being priced too high?

If the work is scarce, this is a very difficult question, but if there's plenty of it available, and the artist is relatively unknown, then believe it or not (or like it or not) there's a formula and it's sold by the yard. The X factor variable in that formula (i.e., how much per sqaure yard) is determined by complexity, medium, and other factors, but it can (and IMO should) be consistently applied for emerging artists. The X factor for paintings is about twice what it is for drawing.

All this is very general and can/will vary per artist, but essentially that's how it's done.

Mixed media pieces, like you mention, if of something less than a staggering complexity (i.e., it's not clearly a year's worth of work), and assuming we're talking a 2D piece, I'd price at about $800, yes. Of course, that's very general (I haven't seen the work).

and to prevent myself from opening a can of worms I'll be sorry about...that's the last question of that sort I'll answer (i.e., I could do that indefinitely, and it's kinda pointless without seeing the work, knowing a good deal more about that artist's market, etc).

Hope that helps, though.

1/26/2007 06:07:00 PM  
Anonymous paula said...

that was very helpful believe it or not! thank you for taking the time to answer and risking that can of worms. I am of course speaking specifically about my work but didn't want to post my site and be one of THOSE people.
thanx again

1/26/2007 08:57:00 PM  
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11/28/2007 08:10:00 PM  

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