coloured pencil on Arches HP, 5" x 5"
copyright Katherine Tyrrell
Since my own close call with Northern Rock and the sub-prime crisis, I've been reading the financial pages on a regular basis and then saying to anybody who'll listen that the financial and property markets and money matters generally were going to get a lot worse by the end of 2007 and that there might be the equivalent of a financial blood bath come the end of year results in January. Well, on Monday, it arrived and Wall Street approached meltdown.
What I've also been reading is what seems like an increased number of blogs posts about marketing art in the first three weeks of January. While some of the these have been due to the fact it's the beginning of the year, it seems to me that the rest have been associated with or have also been anticipating
- a significant downwards shift in 2007 (and 2008?) of gallery sales and attendance at the trade fairs associated with selling decorative art in both the USA and UK
- the unfolding of the impact of the credit crunch on the property market (falling values everywhere) and everybody from the clearing and merchant banks, through mortgage and credit companies on downwards to the individual. (which led to the 'Monday Massacre' - where there was a major financial panic)
- what the BBC referred to as Carnage on Wall Street as loans go bad before yesterday's somersault.
[Update 24.01.08. It's now clear to me that this post would have benefited from a preamble which indicated that one's perspective on the current situation is likely to vary depending on where you live and the extent to which your local economy will feel the impact of events in the USA - see the comments for more about this aspect.]
The United States has now effectively entered into a serious and painful recession. The debate is not anymore on whether the economy will experience a soft landing or a hard landing; it is rather on how hard the hard landing recession will be. The factors that make the recession inevitable include the nation's worst-ever housing recession, which is still getting worse; a severe liquidity and credit crunch in financial markets that is getting worse than when it started last summer; high oil and gasoline prices; falling capital spending by the corporate sector; a slackening labor market where few jobs are being created and the unemployment rate is sharply up; and shopped-out, savings-less and debt-burdened American consumers who — thanks to falling home prices — can no longer use their homes as ATM machines to allow them to spend more than their income. Indeed holiday sales in the US were much lower in real terms than in 2006. As private consumption in the US is over 70% of GDP the US consumer now retrenching and cutting spending ensures that a recession is now underway.The scope for defaults on loans of every sort from money market bonds to credit card bills is truly frightening. Yesterday the talk was all about the ripple effect around the world - or what happens when the US economy catches a cold. You can find more analysis of this on the BBC website's analysis of the Global Credit Crunch and yesterday's Financial Times article The worst market crisis in 60 years.
Nouriel Roubini's Global Economic Monitor -
Europe Will Be Hard Hit by the Recessionary Storm Now Sweeping the U.S.
How does this all affect art?
Well anything which impacts on homes and stimuli for changes in decoration (like house buying and selling) and the amount of 'free' money which is around to spend on and invest in art is likely to have a very major impact on sales of artwork in 2008.
Plus, let's face it, at the end of the day unless you're involved in high end investment art, most of the art which is bought is actually purchased to decorate a home whether or not the artists who produce it would like it be called "decorative art". Which means both galleries and sales can be very vulnerable to economic shifts. It's just not the sort of thing which people buy when their financial status is uncomfortable or possibly under threat.
What are the possible strategies for artists in a recession?
I'm not active in 'pushing' my art within the art market - however I am very interested in the conundrum of what this all means at the moment and I have lived and managed through a recession before.
So what are the alternative options for artists? "Fight or Flight" is a dilemma for both investors and those marketing art at the moment.
Here's a few options for you to ponder on
- move upmarket: One option which a number of artists are thinking about is moving upmarket - towards the people who still have money and won't feel the pinch quite so badly.
- move out of galleries: Any gallery owner who says his sales won't be affected by what's happening should be avoided in my opinion. No matter how charming and nice they may be, naievete is not an asset in the current situation. Galleries will almost certainly become major casualties in a recession. You want to be doing business with those who are market savvy. Those who have experienced and ridden out previous recessions and know how bad it can get probably have 'war stories' which are worth listening to. Artists in galleries definitely need to make sure that they have reviewed how much of their business is vulnerable to the well being of their galleries, how much stock they have in each gallery (I've heard about and read a few stories about how getting stock back when a gallery goes bust can be really time-consuming) and they also need to know or find out which ones are doing well - and which ones aren't. An alternative to getting out of galleries is working with gallery owners to reposition supply and marketing in the current context.
- get into direct selling: artists can maintain similar income levels on lower turnover if they're able to market and sell their work effectively and on a direct basis at gallery prices. It's time to think about what might be the most cost-effective opportunities in terms of direct selling from art fairs, studio, online galleries/sales sites (etsy/e-bay etc) or direct selling by an artist online (through website and/or blog). The key here is probably to work out how to differentiate 'product lines' - the type and size of of work and how well received it is. You don't need to sell all your work direct - but you might well find it cost-effective to sell a part of it direct.
- create opportunities for the risk averse to feel good: This is important - we all need to feel good when life starts to feel a bit riskier. Think about those people who are risk averse. One of the things that can happen if a recession does bite or people feel nervous is that they won't risk the expense of moving. However they might well decide to freshen up their home as the next best thing. The 'DIY' craze took off during the last recession precisely because people knew they couldn't afford to switch away from 'secure' jobs or move homes.
- invest in effective marketing - Marketing is about analysis as well as advertising. Know your markets and understand how they are changing. Then work out how you can raise your profile without blowing your budget. Remember that people who have bought from you in the past and 'word of mouth' is the cheapest and most effective way of your art coming to the attention of new customers.
- manage your debt - and that's your own personal debt (avoid headaches - they dent creativity) and any debts owed to you. While I know it's not possible for everybody, my own personal preference is to live a life style which is far from 'flash' but which means I am and can remain debt free. However I had a father who often used to say 'Never a borrower, nor a lender be'......
Here are some posts from various blogs about marketing that I've been reading
- Alan Bamberger (ArtBusiness.com) writing last November was very clear that The Art Party is Over and - more worryingly - was predicting that past investors will shortly be flooding the market with art as they sell up.
Art is generally the last item added to someone's list of discretionary expenditures when times are good, and the first to be lopped when times turn tart and those discretionary dollars commence to curtail.
Alan Bamberger - The Art Party is Over
- Barney Davey (Art Print Issues) has highlighted a couple
- Ten Points to Ponder for your Marketing Plans - in which he highlights the need to keep a close eye on the home furnishing stores.
- David Byrne's Business Strategies for Artists. This is a comment on and response to....
- a very long and very interesting article by David Byrne (of Talking Heads) Survival Strategies for Emerging Artists which is actually about business models for the music industry - but with a little bit of imagination it isn't too difficult to see how this translates over into the art market - and already applies to some extent. The question is does it all apply? What do you think?
- Sellout is a new blog launched by sculptor Deborah Fisher and recommended by both Edward Winkleman (Edward Winkleman) and Tina Mammoser (The Cycling Artist and Moderator of the Wet Canvas Art Business Forum). This all sounds very promising to me - and I really liked her second post about marketing.
SELLOUT is a dialogue about every practical aspect of being a visual artist--from saving money to resizing jpegs, and everything in between. It is more than a professional advice aggregator and hot-tip provider. We want any information we provide to be fleshed out as anecdote or called out as bullshit.
- and finally, I found Christine Kane (Christine Kane's Blog) through Alyson B Stanfield's Art Biz Blog (see Sunday's post), Christine's post on Monday was called Upheaval - A Field Guide and it offers some sound advice for those already personally affected.
Note on the Waterlily Notan:
I'm enjoying experimenting with both composition and levels of abstraction using photographs I took of flowers last summer (I rushed out on days when it wasn't raining!). Digital manipulation can really assist with working through compositional issues. I'm doing a series of small single flowers using the cut out function and I'm rather liking the way the simplification makes for an image which is a little bit more abstract. If you'd like a post about how I do this let me know in the usual way.