Galleries 3.0 || Open Thread
Yesterday in his always entertaining and often insightfully aggregated email newsletter of recent art press (no link, I'm afraid), Belgian super-collector and all-around great guy Alain Servais assembled the flurry of recent articles about what ails the current gallery model and what's being done by dealers (very systematically and professionally, perhaps for the first time in history) to address shifts in collectors' buying patterns and a more global market. First came the sobering report written by Dr. Clare McAndrew and funded by the Confédération Internationale des Négociants en Oeuvres d’Art (Cinoa), a non-profit dealers’ federation. Charlotte Burns of The Art Newsletter wrote about McAndrew's report recently:
The traditional gallery model is in decline, according to a new report by the non-profit dealers’ federation Cinoa (Confédération Internationale des Négociants en Oeuvres d’Art), which found that fair-led and online business is taking over as the main source of revenue.OK, so I have a minor quibble with the headline of this article, which makes it look as if Cinoa, rather than my pal András Szántó concluded the gallery system is "structurally weak" (that phrase never appears in the actual report). The point seems supported by the report itself, but it is discussed therein in less apocalyptic terms :
Gallery visits are declining as the art market expands to new international centres served better by art fairs or electronic media.
“We do much more business at the fairs than at the gallery—no question,” said Dominique Lévy, the co-director of L&M gallery.
András Szántó, consultant and contributing editor to The Art Newspaper, said: “The fairs have done very well in exploiting a structural weakness of the gallery system—it is inchoate and based on local markets.” With the withdrawal of those markets during the downturn “the overall weight has shifted to clients who don’t live where you work—so you service them through art fairs,” said dealer David Zwirner.
News headlines and front page articles do not reflect the reality that art and antique dealers today account for fifty percent of global art world sales. This important group of dealers consists largely of discreet, low profile individuals and small businesses preferring to focus on finding great art to match with the right client rather than publishing high flying sales prices. Clare McAndrew’s study, the first of its kind, explores the essential role of art and antiques dealers within the art market and as a consequence society as a whole. It offers insight into how and why the art dealing profession is changing, and what this means for the trade as well as collectors, as for the culture as a whole.Clearly, there are challenges ahead for galleries. Especially smaller and newer ones. Artinfo's Shane Ferro looked at the report and noted how the economics of the gallery system parallel the economics of the US, if not the entire world:
This economic study offers a brief historical review of the art dealing profession, and then continues with an emphasis on the current art market and proposes what might be in store for the future. It examines how dealers’ businesses have been affected and changed due to the current economic condition and the rise of new technologies. The study highlights the challenges dealers face from competitors and a range of key competitive advantages such as expertise, services and recourse. In order to conduct her analysis, Dr. McAndrew’s research included examining spending trends, motivations, and the interaction with dealers from the perspective of both sellers and buyers.
Just because the old-fashioned, flesh-and-blood art dealer continues to play an important role does not mean small-name gallerists will not be affected by the shift in the market towards a more global perspective. The report postulates that art dealers accounted for just over half of the art sales for 2010 (meaning the other half took place through auction houses). This group includes a total of 375,000 dealers, but McAndrews's study "affirms that 2 to 5% of them represent half the turnover of the gallery sector." Just 7,500-20,000 dealers are bringing in a combined total of $10 billion per year — an average of just under $1 million each. That leaves an average of under $30,000 each for the vast majority of galleries.This disparity is nothing new to those of us at the emerging end of the primary art market, but what exactly is to be done about it (if anything) remains a topic of constant debate among my gallerist friends. Dr. McAndrew, writing in The Art Newspaper herself, discussed both, the differences between buying art in a gallery versus buying from auction houses or at a fair:
While the auction houses have gained relative market power over the past 20 years, the survey highlighted key areas where dealers still maintain a competitive edge.McAndrew goes on to discuss how galleries do/can deal with the shifting landscape, including closing up their public shop and dealing privately or turning to online channels. Driving a big part of this is unquestionably the rise of the art fair:
Unlike the more diversified auction houses, dealers often specialise in a few tightly defined fields where they have a high level of expertise. Due to this specialisation, their business models are highly dependent on the successful sale of a small number of works and hence are subject to considerable risk. However, specialisation also brings a number of competitive advantages: dealers often have access to works from more sources and can therefore offer better quality stock and more choice than the auction houses. Many dealers also claim to offer better protection and fuller and more legally binding guarantees. They can also be better value than auction houses as they often take smaller commissions.
The discretion of dealers was also singled out as a key advantage: buyers can avoid revealing how much they spent, which is sometimes unavoidable at auction. For sellers at auction, although the reserve price can protect their bottom line, if a painting is “burned” the negative effect on its future value can be long-lasting. Dealers, on the other hand, can protect buyers from unwanted publicity and only show works privately.
Expensive, infrequent purchases such as art can be stressful for buyers, and dealers can offer a much less pressured environment compared with an auction room where emotional and competitive tensions are high. With a dealer, collectors have more time to consider a purchase and make thoughtful decisions. Many dealers also offer the possibility of trialling, returning items or reselling them in future. Finally, dealers are generally more concerned with building long-term relationships with their clients.
The research found that the main complaints when buying or selling via a dealer were about pricing and perceived value; pushiness, and a lack of transparency.
OK, but if you're a gallerist or thinking about becoming one and you still believe that the context of a brick-and-mortar space is important for the artists you wish to work with, where can you turn for mo' better ideas on how to run your business?http://www.blogger.com/img/blank.gif
Another key factor driving dealers away from traditional retail premises is the increasingly “event-driven” nature of the art market. Fairs have become a vital part of many dealers’ livelihoods, giving them access to international buyers. They are seen as a crucial way for dealers to collaborate in the face of increasing competition from auction houses, creating some of the same “one-room” excitement and competitive energy as an auction.
Many dealers felt that the cost of running a gallery (in addition to frequent travelling and attending fairs) was not justified by sales made through this channel, with some reporting revenue from this source as low as 5% of total sales. Some also felt that buyers’ loyalties were shifting from dealers to fairs, and that these events have become the focus for sales.
Impressively, more established galleries are trying to help.
First comes news of a new program at Amsterdam's de Appel specifically for aspiring art dealers. [Full disclosure: I've learned through Julia Halperin's article on the program over at Artinfo that my book is required reading for this program...as Murat would say...wahoo!]. The program is the brainchild of four international galleries: gb agency, Paris; Hollybush Gardens, London; Jan Mot, Brussels; and Raster, Warsaw. These four formed a collaboration (hint, hint) called The Fair Gallery. Perhaps the most inspired part of "The Gallerist Programme" (at least in terms of making aspiring dealers want to take it) is that it "culminates in a final assignment in the form of a booth presentation at Liste in Basel 2013."
Of course, the notion that top prize seems to be participation in a fair (i.e., part of the perceived problem) is ironic...but as I was quoted as saying in the article, I wish such a systemic approach of knowledge transfer had been available to me before I dived in (and made all the mistakes I've made).
Speaking of knowledge transfer, though, another impressive effort on the part of dealers to share their experience is coming up three-day event in Barcelona this September.
TALKING GALLERIES, the first international meeting for gallery directors, will be held in Barcelona on September the 19th, 20th and 21st 2011. It aims to offer a meeting place for industry professionals that goes above and beyond the commercial side of the art market to focus on exploring and debating central issues of common interest.
Conceived as an annual event, TALKING GALLERIES will function as an open platform to foster thought and debate around the world of galleries. In its first edition, TALKING GALLERIES brings together twenty-five speakers from eleven different countries, including the major art capitals in the world.
Located in the Auditorium of the Barcelona Contemporary Art Museum (MACBA), this three-day event will gather leading international gallerists to discuss current issues, share experiences and draw up strategies for the future. Curators, collectors, art critics, directors of museums and other art institutions will give their point of view as invited speakers in the scheduled debates and conferences.
The program looks fantastic, and the line-up of speakers is world-class. The event is focused specifically on defining "the new role of the gallerist in the art world."
Consider this an open thread on what gallerists can/should do to address the changing landscape. And it pains me to have to note this, but I do so from experience: Please note comments taking cheap shots at dealers or the gallery system will not be posted. Real ideas that address the real challenges are all welcome.