Why would anyone want to buy a piece of digital art?
Unlike paintings or prints, you cannot touch a digital image, and displaying such works — for your own enjoyment or to show off to others — does not have an obvious mechanics (more below). Other ephemeral media like video or theater involve a sustained narrative experience that makes the price of the ticket worth it, but that is rarely a feature of a broad range of digital objects and images that can now be purchased.
The digital art marketplaces that have sprung up in the past couple of years— superrare.co, knownorigin.io, etc — promise new income streams for a new type of artist. Many hopefuls might conceivably be game to offering their digital creations for sale online, but it is unclear whether enough buyers exist to make such marketplaces viable. We created a survey as a lead-up to the SXSW panel “Value And Art In A Tokenized World,” on which I was a speaker, to gather more information on the motivations of people who already own digital art.
When asked why they collect, 35% of respondents volunteered they were themselves artists — a number high enough to suggest the demand side of this marketplace is indeed too tiny to live up to the dreamy claims of ‘democratizing’ art. At least for now.
- I had expected a majority to be in their 20’s, but half of the respondents were over 40 years old.
- A huge majority, 90%, own more than 10 pieces of digital art (and 23% own more than 100), indicating a highly active community.
- Highest price paid for a single work: $5,000. And 40% of respondents paid more than $200 for a single work.
- More than half of the prices reported were in Ether.
- About 40% made their first purchase in 2018, which is intriguing because cryptocurrencies saw a significant downturn last year—and this might be expected to have had a chilling effect on digital art markets.
- Geography: North America, 59%; Europe 28%; South & Central America 10%; Australia 3%.
Freeform responses to the question “What drew you to make a purchase?” gives a glimpse into an activity that remains, for the most part, the realm of an early adopter set:
“Being a crpto-artist by myself[sic], I mostly bought pieces of fellow artists that I liked.”
“I feel it is a natural step into the future of art. The technology is here and it will not go away.”
“I was drawn to it mainly by the desire to participate in some way. To be frank I think the experience of acquiring digital art has a long way to go.”
“I own CryptoPunks and Rare Pepes because they were pioneering projects in the space and inspired a lot of innovation. My favorite project is SuperRare.co, where I am an active collector.”
“I have a growing collection of rare digital art from many artists. Some I bought by following a trend or influencer; others I purchased because I loved the work.”
“The internet is the medium for today’s art. It lives everywhere all at once and can be appreciated by anyone with out requiring access to museums or galleries.”
Respondents volunteered a variety of projects and marketplaces they use and participate in by name: Dada.nyc, SuperRare.co, KnownOrigin.io, Rare Pepe, Portion.io, CryptoPunks, CryptoKitties, Snark.art, Cryptographics, and Opensea.io.
Once they take ownership of their pieces, what do people do with them?
Some make physical prints of their digital images. Some use digital images as avatars on their various social media platforms. Others set them as backdrops on their smartphones and other gadgets. One respondent has created a digital display case mounted to their wall to exhibit their various works.
We also saw responses like these:
“I don’t even know how to access it, to tell you the truth.”
“I am just thrilled to own it. Currently there is no good way to display one’s collection in one place and this needs to happen soon.”
“Sadly it just says on my wallet…I need a blockchain digital picture frame.”
“No, they just exist digitally, like almost everything else in our modern lives- our photos, our communication, and our money, whether cryptocurrency or bank balance.”
There is enormous variation in what can be called digital art — from a GIF to a room-sized interactive installation. Of the more complex and multi-dimensional works, how a collector chooses to maintain and display the work after purchase remains a specialized undertaking. This is true when collecting any blue-chip, non-digital work of art, too: it is an elite activity for the few who can afford custom solutions.
The promise of the newer blockchain-based digital art marketplaces is a democratization of access — in terms of both price and collectibility. Looking at how these marketplaces need to grow to fulfill that promise means examining buyers’ motivations: why would someone want to buy a piece of digital art? What happens after they make a purchase? How is ownership an experience in itself?
A marketplace is only viable if the pool of buyers is larger than the pool of artists. There is currently no satisfying mechanics for what to do with a digital art work after purchase, even for simple, modestly priced digital images. Anyone looking to expand the appeal of digital art ownership to a broader group, beyond the few early adopters, might look at building out a scalable new mechanics for what ownership can become in the digital age.
Art Hodl-ings In Detail
An overwhelming 97% of respondents own some other form of digital art in addition to the high-profile CryptoKittes, Crypto Punks, and Rare Pepes. Collectors rarely own only a couple of pieces: 90% own more than 10 pieces, and a substantial 23% own more than 100 works, indicating a small, but highly engaged community.
Demographics In Detail
One of the surprises here is 52% of the digital art owners who responded are over 40 years old. The responses were well dispersed geographically across North America, Europe, South & Central America, and Australia.
Money Matters In Detail
The history of digital art ownership is a few decades long, but many of the marketplaces and projects that popularized the concept of digital ownership only came along in the last couple of years. CryptoKitties and CryptoPunks, for example, were released in 2017. Unsurprisingly, the vast majority of people who own digital art bought their pieces after 2017. But 40% of the people who responded made their first purchase in 2018, a year which saw a significant downturn in the value of the cryptocurrencies underlying the recent spate of marketplaces.
More than half of respondents got at least some of their digital works for free—either because they were gifted these items, or because they own works they created themselves. The highest reported price someone paid for a single work was $5,000, and 40% of respondents were willing to pay more than $200 for a single work. The median of highest reported prices was $134.
A note on currency and value calculation: Respondents reported prices in the currency of their choosing. About half of the responses were in Ether, and the majority of the rest were in US dollars. In order to unify the responses for the purpose of analyzing the results, I used a conversion rate of 1 Ether = $182.5 USD (which reflects the value of Ether at time of publication). This is a problematic method, as the value of Ether has fluctuated significantly in the past couple of years: it reached a high of $1,389 USD in January of 2018, and has not dipped down to its current low since mid-2017. The goal here was to capture a moment in time of the current market value for these assets, and this method provided a best guess snapshot.
The survey was disseminated mostly on Twitter and among a community of people who identify as interested in blockchain and art. The biggest challenge was ensuring a representative data set, since active buyers will likely self-select in choosing to participate in the first place. The responses were fewer than 100, and this is also a caveat for the accuracy of the data that resulted.
If you would like to contribute, the survey remains live HERE—I will be updating the results if a significant number of new responses come in after publication.