Thursday, April 04, 2013

Whatever Lola Wants | A Few More Thoughts on the Rash of Defections From the Art Market

In response to what seems a growing rejection of the current gallery model (see here, here, and here), a backlash of sorts has emerged on social networks, with a few people who are still committed to the model criticizing "the quitters" for everything from not being tough enough to not understanding the business they were in. On Facebook, one very innovative dealer, who I personally have greatly admired for many years, described the trend (if we can call it that) as dealers "bowing out from art for sentiments that could only be defined as anti-market." I've read similar responses in other places, and they share a theme: "the overall market is strong, so clearly there's nothing wrong with the market...there must be something wrong with these people rejecting the system."

That notion, though---if the overall market is strong, there must be nothing wrong with the market--warrants a closer look in my opinion. 

First of all, it seems to imply that "the market" is an absolute good and therefore whatever makes it stronger must be good. Whatever the market wants...the market should get. The thing is, though, the art market, like any market, is not a wholly self-contained, separate entity that works best for everyone when it's not interfered with (despite what some free-market fanatics might argue).  Every market is a human-created system designed to suit human needs and human priorities. We collectively regulate them (or not) according to our goals. They exist to serve us, not the other way around. So for the dealers who have decided the art market, as it has evolved, no longer suits their needs or priorities, rejecting it is simply logical.

Second of all, it's not particularly helpful in this context to discuss the "art market" as if it were one homogenous system. If that were true, a "strong market," like a rising tide, should lift all boats, but very different realities are facing dealers at different ends of the spectrum. As Shane Ferro recently wrote, "The Primary Market Is Immoderately Lopsided":
If you are a large dealer, last year was probably one of your best. The primary market has ticked slightly upward to 52 percent of the total art market, up from 50 percent last year. If not, you may be screwed. Inequality in the broader economy is increasingly apparent in the art world. However, much of the discussion (including here at ARTINFO) has been focused on the stagnation of the “middle market.” [Clare] McAndrew’s report, however, really highlights the plight of the lowest end of the market. While the middle may not be growing, commerce at the smallest galleries is actively shrinking. Consider these facts:
  • Dealers with sales under €500,000 in 2012 reported that average turnover fell by 17 percent year-on-year.
  • Dealers with sales of between €500,000 and €2 million reported a decline of one percent.
  • Those with sales between €2 million and €10 million also had a decline of two percent on average.
  • The top end of the market, where dealers generated sales of over €10 million, reported an average increase in turnover of 55 percent.
Third of all--and here's where I wish some of the folks criticizing "the quitters" would instead spend a few minutes reflecting on their stated rationales for leaving the business--the business has dramatically changed over the past ten years. Many of the reasons people started galleries 10, or 20, or 30 years ago are now to a large degree incompatible with being successful in the current system. Discovering new talent, making the gallery a casual place for the exchange of ideas, partnering with artists toward very long-term goals...these were all much more possible and rewarding only a decade ago than they are today. They have been made less possible by the relentless art fairs schedule (and many galleries cannot afford not to do them), the constant pressure to grow (or lose your artists to a gallery that has), the rampant poaching that's going on, and simply the limited number of hours in a day. I fully understand when someone says the business is no longer interesting to them. It's not the same business it used to be.  

Now I'm not at suggesting all hope is lost, and everyone who's not already a mega-gallery or well on their way to becoming one should throw in the towel. Rather, one of the notions that emerges from these social networks critiques of "the quitters," I happen to believe in myself. That is, innovation is the order of the day; it's the only way to respond to the change. The thing is, though, depending on their personal circumstances, not everyone who wishes to re-invent the model can do so while still running the current model [see note above re: number of hours in a day]. Some of the best minds in the industry probably should step back and approach it unencumbered by the daily grind and incredible overhead of a brick-and-mortar space. I truly hope they all come up with improvements we can all benefit from. 

More than that, I hope they come up with solutions that permit everyone to spend more time looking at and discussing art. I wouldn't mind if things were so exciting on that end of the industry that discussions about the business model became extremely rare.


Anonymous Anonymous said...

I think every small company in America has faced whats happening in the Art world now. Relentless pricing pressures, skyrocketing fixed costs . Being squeezed out by the Mega companys.Ive thought about renting a industrial bay and firing up the big machine again, getting iso 9001 certified and everything else involved "going for it." once you turn that switch on its on 24 hours a day every day.

My Heart aint in it anymore. so I day Dream and make objects.

4/04/2013 10:44:00 AM  
Anonymous Anonymous said...

The argument that the mega galleries are taking sales away from the small galleries I find quite absurd. It's as if Best Western complained that their business was slow because everyone stays at Ritz Carlton. The mega galleries deal in a different product, and largely a different customer segment, than the small galleries.

I hate to say it, but this discussion seems to be driven more by envy than actual market intelligence.

Perhaps the small galleries should ask themselves if the product they sell, or the price they ask, might be the problem rather than the mega galleries?

4/04/2013 12:58:00 PM  
Blogger Edward_ said...

Always an anonymous commenter...always.

Here's an idea, any time in your life you feel so strongly about something you describe someone else's argument as "absurd," demonstrate your conviction by signing your name to it. Or if you can't, perhaps tone it down a bit, OK?

The argument being made here, by the way, is NOT that the mega-galleries are taking away sales, but rather that they're poaching artists who the smaller galleries had worked hard to build up a market for. Ultimately that results in them taking sales away, but it's not at all parallel to your hotel analogy.

As for your last idea, it's precisely because the products the smaller galleries are selling (and the prices they're getting) are desired that the Mega-galleries are poaching their artists.

Again, though, you shouldn't worry as much about any of that, as you should why you feel compelled to lob insults on threads you're either only half reading or only half understanding.

4/04/2013 01:07:00 PM  
Anonymous Anonymous said...

-There are fewer well educated middle class people who are inclined to support the arts.

-Very wealthy people buy a lot of art but they buy for investment purposes, not to live with the work. Since non blue-chip art isn't investment-grade, very few wealthy collectors will touch it.

-fixed costs have gone up, and relative to the sales of mid level or emerging gallery the cost of doing art fairs is enormous.

4/04/2013 10:52:00 PM  
Anonymous Bert Sibley said...

Thanks for an envigorating discussion concerning the Arts and marketing.
It seems that some galleries still follow the mantra of the movie "Field of Dreams" If you open the gallery they will come.
Sadly that isn't the way today. ART still sells. The marketing of the art has changed.
Middle income earning art supporters have more to chose from and established art followers have acquired the art they enjoy.
If you invite the same people to the showing of you art over and over ......they stop coming.... unless it is made appealing.
I also agree that to complain behind a wall is to serve as an example of way the art galleries don't seem to work for you.
If you are secure with your thoughts.....Name it Yours.

4/05/2013 09:09:00 AM  
Blogger Lori Woodward said...

My experience is with a few galleries in the southwestern US and New England. I also have friends who are lifetime collectors. They collect because they love art, and also as an investment. When they spend more than a hundred thousand dollars on a painting, they want to think that its worth will increase over time.

Legacy Gallery in Scottsdale shows the art of living artists and also holds the Scottsdale Auction annually. The works at the auction are primarily those of deceased artists. These works are in high demand and the prices keep rising. Galleries and collectors are making millions off of this type of market.

Legacy also sells work by about a hundred living artists. Those who used to make a great living selling there in the $30-$50K range... Well their sales have fallen away, almost completely in the last 6 years. I have friends who show there... Who used to sell very well (before 2009) and now are leaving the gallery because they are selling maybe one painting a year there. Same gallery, two markets.

During the height of the recession, many galleries that sold works by living artists had poor sales. However sales have picked up in 2012 for some, and it's interesting that my friends who sell there are selling their larger $10K paintings.... Which is near the height of their price range. Paintings by living artists over the $15K range are not selling very well in these venues at this time.

The current trend is for artists to flock to the few remaining US galleries that are selling well. It seems the best way to get into these is vy recommendation of the artists who are already there. But I've got to wonder how well they will sell if the number of artists that gallery represents rises to well over 100.

Another trend that gallery owners are reporting is that the majority of their sales are secured by email and phone. Unless the event is an auction, by draw, the folks that show up to the openingnare artists, and the buyers buy work from the gallery website. I have to wonder if brick and mortar galleries really need the space and electric bill if collectors arent showing up in real life.

Things change fast these days... What kind of sales trend one year , doesn't mean they will the next. Everyone in the business needs to stay on their toes and think out of the box. That said, I do think there will be far fewer brick and mortar venues in the coming years, which will make artists independent business owners. It's an exciting time. More artists are selling art than ever... Fewer are making a decent living from it right now.

4/05/2013 11:01:00 AM  
Anonymous Gam said...

out in the hinterlands,
I have heard of a few galleries out in rural areas, that do well, based mostly on the fact that close to over 1/2 of their cliental are not local, but purchase from afar ... I think of oneo located on a Vinyard with it's own hotel at hand. The scenery is grand, and overhead much less then in the urban centers. Others are blends of other businesses, picture framers, interior decorators ...souldnt be surprised to find a sushi place somewhere. The point being they have moved to a blended business model.

I keep thinking of a potential studio space overlooking acres and acres of apple orchards with the blue horizon of the great lake as a backdrop and wonder, maybe the priority of current connection is wrong.

Maybe galleries need to reconsider the "connectiveness" issue within their current business model. How we used to connect has shifted, but the need/want remains as certain as we are human. Ive seen art fraud police set up their own gallery space in Montreal. Maybe private galleries could be valuable? Not so much with paywalls to exclude but in terms of a privilege to particpate, I think of kick starter calls for participation or Google glasses "beta" release of $1500 product for a select few. It's more the privelege of being part of a "tribe" and in group which can and does change over seasons, but the adherance factor being initated and connected via a completely different "exclusive" model. How you create that "beta" group for a season, I wonder, but possibly that is a factor in the discoragement of seeing ones clientale and artists drift on, maybe instead if one was to embrace the idea of for this season, this show, ... and via that create a coninuity that achieves what has been garnered in the recent past?

Soon the apple orchard will be in bloom ... seasons drift into each other ...maybe gallerists need this drift of content as well?

I'm not in the business, so this is just conjecture. But I do find the appeal of Kickstarter being significant even for the art world.
Not in the funds raised, but in the shift of how they reach out for those funds, and do sucessfully connect beyond their requests.

4/05/2013 12:53:00 PM  
Blogger Jsun Laliberte said...

I've lived in Williamsburg for about 8 years and have seen, in my short time here, the appalling shift in priorities of the resident and vacationing (where there never used to be one) public. It presents a manifold problem. Demand-side economics states that you can't sell art to a public that doesn't want to buy art. Not much you can do about that, other than change or leave...

It is also very true that many gallerists, in NYC, need there time to connect to artists. It's why most got into the biz. My partner is an artist and also a curator, and is often asked how she finds her artists= a lot of studio visits. Grass-roots socializing. Hanging with artists. And the luxury of $0 overhead. We both see the growing celebration of guest-curatorship in the gallery system. Gallerists are just in such need of a breather, that they (like you said) don't have enough hours in the day, particularly, if they see the need to change their program in order to stay relevant.

As an artist, I love my job. When I don't, I distance myself–regroup, refocus, rethink, and execute. A gallerist with a solid artist's roster, overhead, a brand, and employees, doesn't have that luxury.

I am interested in seeing this "new model" that is on the horizon. I don't think it will replace anything at all. Rather, it will add another facet to the myriad of possible ways to go about be the conduit between artist and public/private/government. Which is what I think is the real allure of being a gallerist.

-Jsun Laliberté

visual artist & entrepreneur

4/06/2013 07:43:00 PM  
Anonymous Rory Krupp said...

Having read all the linked articles and such I'll admit I'm a little confused. Where did the middle gallery audience/customer go? Are they, like the retail stock investor, on the sidelines until the system rights itself or becomes more clear? Or is the trajectory of artists through the system going so fast that collectors can't get a handle on artists before they disappear from the middle tier and move up?

4/07/2013 10:24:00 AM  
Blogger Edward_ said...

Good question, Rory. I have assumed they are waiting for more stability, but your second option may indeed be a factor.

4/07/2013 12:03:00 PM  

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