Thoughts on 2017 for the Art Business, pt. 1

Cornell DeWitt
4 min readJan 10, 2017

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[Please find Part 2 here, and Part 3 here]

As my mother used to say, “Try to make yourself useful, as well as ornamental.”

When my business partner and I launched Joseph Raj Gallery in 1995 as one of the first online art galleries, we were not thinking about being disruptors. We were just trying to share — and sell — the photographers we represented with a market outside of the culturally sleepy province of Boulder, Colorado. 20-some years on, why haven’t we seen the substantial, sustainable art market revolution happen in the ways that pundits have been simultaneously hailing and decrying for all these years?

Too often I hear arguments about disruption in the art market generally revolving around a couple of notions. One is that there are too many powerful interests with too tight a grip on the flow of information and goods that make it resistant to change — in other words, that the people with the money have too much control. Right. And Uber was only successful because there was no similar grip on the taxi industry by powerful, wealthy entities. Tell that to Bob and Ethel Scull, the late, great taxi kings and pioneering art collectors. The second, laughably simplistic argument, tends to be along the lines that the art market is simply overly resistant to change — call it old fashioned, call it what you will. But why? Whipping out Occam’s trusty razor, we understand that people enter, and are in, the art world because it is slow, anachronistic, opaque, old-fashioned, the wild west, resistant to change, etc. — pick your demon from the well-worn list of clichés trotted out by every wanna-be disruptor. Not in spite of those things.

Setting aside Occam’s razor and putting on the cape of Captain Obvious, we also have to recognize that over the last 20 years, the internet has radically disrupted the art market, in ways big and small, and anyone who doesn’t understand that, or hasn’t seen it, isn’t paying attention. Or wants you to invest in their new Uber-scale game-changer of the art market. Investment decks stacked with buzzwords about “disrupting” and “countering inefficiencies” in the market are great ways to raise money from venture capitalists who are apparently wholly unfamiliar with the particulars of the art world, but all too often there remains a fundamental lack of understanding of why the art market operates the way it does.

I would argue that this lack of understanding starts from looking at things backwards: the internet isn’t just a potential solution to the art market’s challenges, it is also the progenitor of many of them. Once we understand how this happened, we can more helpfully harness its power to improve the art market. This is not to dismiss the power of the internet in all its myriad forms — advances in virtual reality, augmented reality, artificial intelligence/machine learning, and data science will all play important roles in the future of the art market and art making. However, claims that advances in our online interconnectedness will solely — or even primarily — be the future of the art market don’t understand how we got to where we are, nor why we are here in the first place. So let’s take a look at where we’ve come so far.

Art World Online 1.0 — From the dark ages through 2010: Is there anybody out there?

When Joseph Raj Gallery went live, Yahoo listed all of 12 art galleries online. We were part of the first wave of the art world coming online. This phase was marked by the use of the internet primarily for marketing and information. The bellwether in this phase was Artnet, in their noble, sisyphean, even quixotic quest to bring the art world online and to bring transparency to the market; and Artinfo, as they built their online media conglomerate.

Art World Online 2.0–2010 to now: Everybody Wants Some

The global art market is estimated to be over $60 billion in annual transactions. Galleries typically earn up to a 50% commission on primary market sales, and auction houses and other secondary market dealers can earn up to 25% or more. Since about 2010, countless entrants into the online space of the art market have aimed for their cut of what they perceive as a huge slice of pie. Countless have failed, or — at best — radically shifted their business models. This period has been defined — with various approaches and various degrees of success — by the likes of Paddle8/Auctionata and Artsy; in addition to primary market, direct sales ventures ranging from the established Saatchi Art to well-funded start-up Twyla.

Art World Online 3.0 — Happening now: All Together Now

While the urge to get a slice of the sales pie won’t abate anytime soon, many of the most interesting developments in the art-world-online space these days are focussed less on sales and more on providing tools for understanding and navigating the art world. As advertising and fee-based revenue streams weaken, the signal challenge for these newer initiatives will be to forge a creative and innovative combination of older revenue models, plus strategic partnerships, sponsorships, and branded content that will make them sustainable. Many of these initiatives are still in their infancy, and range widely from information tools like the Clarion List and Art Frankly, to art market financial tools like Arthena and Borro, to big data plays like CollectorIQ and ArtAdvisor, to guides like ArtLocal and SeeSaw, to logistical tools like ArtRunners and Arta, to more esoteric tools like Verisart and Monegraph.

So what have we learned from this? For starters, don’t just try to get your slice of the pie — try to make yourself useful. “Transparency and access” are the bogey men of the art world. They are not the real problem.

In my next post I’ll dig deeper into the physical spaces of the art market — primarily art fairs and galleries — in order to see how the online and the physical fit together, identify the real problems, and look for solutions.

Part 2 is here

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