Thursday, December 23, 2010

Reviewing Art in 2010 (#2) - the art business

The National Gallery in Trafalgar Square, London

How did the art business change in 2010?  There's no way I can ever provide an in-depth analysis of every aspect but this post will comment on matters which struck me during the course of the year.  As one might expevct, there's an inevitable bias towards the UK art economy with which I am rather more familiar

This post covers:
  • the art economy - the macro perspective
  • art media and genre
  • art galleries and museums
  • selling art online
  • art shops and art supplies
Within each of these I review how I did on my art predictions for 2010, identify what I missed  and outline my predictions for 2011

The Art Economy

The macro perspective: my predictions for 2010 - and what actually happened
  • There are still fears around of a double dip recession. That's when it gets bad, gets better and then gets bad again. 
    • I was correct in to identifing these concerns
    • However for the most part they mainly affect Middle England and Middle America and the less well off rather than the genuinely wealthy who are beginning to behave again rather as if there are no economic issues of note
  • We've avoided the worst of what could have happened but now we have to pay for it.
    • This was a major topic of debate during the UK General Election
    • There is debate at the moment about whether the actions being taken to dig us out of the hole caused by the banking crisis and the financial shenanigans are more or less likely to prompt a further recession. 
    • in the meantime the bankers continue to get their bonuses and doubtless some of them will continue to soend their wealth on art
    • for everybody else we're entering a phase where there are going to be a significant job losses and a lot of uncertainty.  Nobody is safe
What I certainly didn't see coming - but should have - was the level and the extent of the cuts in public funding for the arts in the UK.  I know museums and art galleries in the USA are having similar problems with significant numbers of staff being laid off. 

The impact is likely to be particularly deep at the local level.  For example,
UK - Arts Council:  In the UK, the situation initially appeared somewhat fluid - although it was very evident that arts finding was under threat - not least because it had demonstrably failed to evidence that it had been cost effective.  Subsequently, the Arts Council has suffered a 30% reduction in funding and museums face a 15% cut - the reduced level being on the basis that they are not allowed to introduce charges. 

UK - Philanthropy:  The UK Government has already proposed a 10 point plan to stimulate and support philanthropists who fund the arts has already identified a number of actions.  These will become be more explicit as 2011 unfolds.  One of the proposed actions is a "year of corporate giving" in 2011 to encourage more investment from the business sector.

Prospects for 2011

The major issue for 2011 will be the loss of public funding due to the budget adjustments which are now having to be made for all the money which was pumped into shoring up the banks.

I'm planning a series of posts about funding for the arts in the New Year and will discuss issues about art funding in more depth then.

In the meantime, here are my predictions for 2011:
  • Philanthropy is the major new theme and the name of the game in order to secure funds for art institutions and activities.  
    • The government review of philanthropy (due to report in Spring 2011) will make recommendations for tax changes to make it easier to support the arts plus "honours" for those who provide significant support.
    • Philanthropists will start building their own museums.  There's some evidence that this has started already.  However the prospect of a philanthropist (such as Saatchi) being able to hand over a new flashy capital asset (aka art gallery) to the state in the future - once they realise how much they cost to run - is remote in the extreme.  The State does not have the funds to run them either!
Charles Saatchi announced this month that he is donating the contents of his Chelsea gallery and more than 200 works to the nation. Many others are keen to follow in his footsteps.
Art collectors build museums to let public see private hoards
    • More and more museum exhibitions will be avenues for art collectors to get their acquisitions on display - which will in turn enhance their value and stimulate the art market
Twelve billionaires sit on the board of New York’s Museum of Modern Art, the most of any nonprofit institution examined in a survey by Forbes magazine.Modern-Art Museum Leads Nonprofits in Billionaire Board Members
  • Government plans for the Arts will be developed and refined: detail will be added to the principles behind the 10 point plan for funding the arts in the UK
  • Government Budget cuts will see a major revision of priorities for public funding of the arts in the UK.  Arts organisations and artists are facing the double whammy - through funding cuts from central government (due to the Arts Council 30% budget reduction) and from local government (also facing very significant cuts).  Unpicking what this means in reality is only now beginning to work through the system and there will be a lot of announcements in the first quarter of 2011 as projects and activities become victims of the cuts.  Examples of the types of activities which I expect to see in 2011 include:
    • Fundraising will become a pivotal activity of all subsidised arts activities - meaning a big emphasis on the commercial activities associated with major art museums and galleries
    • Lots of cosying up to "men in grey suits" and "Ladies who lunch" who have money
    • Regional Galleries may close or have reduced opening hours
    • Peripheral activities - particularly at a regional and local level - will fall by the wayside.  
    • major exhibitions in publicly funded galleries likely to attract a charge or increased level of charge - while access to the main collections will remain free
    • Funded activities will be required to demonstrate more concrete evidence of a return on investment.
    • Art museums and galleries will sell off artwork which will never be on display to raise funds
    • Arts management will become lean, mean and very, very efficient!
I recently read this article What I Want for Christmas by Michael Kaiser President of the John F. Kennedy Center for the Performing Arts on the Huffington Post.  He's spot on - but I don't think it's likely.

Art Media and Genre

My predictions for 2010 - and what actually happened

  • Specialist genres will continue to be relatively stable in terms of sales. see predictions for 2011 below
  • there will be much less emphasis on installation art requiring significant sponsorship. It seemed to me that only major names were successful in attracting the funding required for major exhibitions of their work in prestigious / public locations - such as the Anish Kapoor exhibition in Kensington Gardens.
  • traditional visual arts (eg paintings and drawings) and figurative art may continue to enjoy a higher profile.
    • Collectors have been somewhat cautious and indicated a tendency to want to play it safe. Maybe mindful of the fluctuations in the prices paid for contemporary art. Values, for some, have experienced a bit of a rollercoaster ride since the art bubble burst.
    • High net worth individuals are still buying art but they have retrenched and are tending to go for "old" names rather than more contemporary artists.  Hence at auction we're tending to see collectors generally been leaning towards non-contemporary artists with established track records in the art markets. Auction sales of old masters have been doing very well. By definition, such artists tended more towards the traditional media and figurative art.
    • Those who have invested in art are still trying to support prestige prices - by buying more of the same artist - but it can be a risky strategy.
  • authentic art - of and belonging to a culture - will be valued more highly. I don't have any sense at all whether or not this was the case.
Predictions for 2011
  • Sound art will become more popular - as a spin-off from the Turner Prize winner in 2010. I have to confess I'm still bemused as to where conventional music begins and ends in terms of an interface with sound art!
  • There is a renewed interest in crafts and heritage art.  Handmade seems to sit well with a time when people are having to "make do and mend".  Sustainability themes seems to chime well with heritage arts and crafts.
  • Specialist genres will continue to be relatively stable in terms of sales.  This is a repeat of my prediction for 2010. For the most part, wildlife art, botanical art and miniature art all continue to do well.  All have an established collector base who are passionate about the art and are continuing to support and collect new art.  There is no reason to suppose that these genres will not continue to do well.
  • Fewer commissions for portraits of individuals associated with publicly funded institutions.  Money is going to be tight and portrait commissions may well fall foul of this.
  • Some artists selling paintings in the £10,000 - £20,000 may feel the pinch.  I've been noticing that artists who have previously sold well (always boasting red spots) no longer appear to be doing so.  These are the ones who aren't "hip" enough for the very wealthy and are a bit too expensive for those whose assets and incomes are currently being squeezed.  Unfortunately reducing prices won't ever be an option for these artists and they will need to find another way out of the impasse.
  • Paintings will become bigger and more colourful again.  The theory is that art which incorporates warm / sunny / feel good colours helps to make people feel good and hence is more likely to sell.  I've certainly seeen evidence of colour and size coming back into recent exhibitions by some art societies - notably the recent NEAC exhibition which I tend to think of as the bellweather for the UK art societies and associated artists.
  • Works on paper - particularly high quality fine art printmaking - will do well.  It's easier and less expensive to buy art from artists with a "name" when it's a fine art print and it's easier to store if purchased as an investment. Plus it's a route into serious art collecting for new collectors.  This prediction is based on the phenomenal sales achieved by some of the printmakers at the RA Summer Exhibition.  Healthy sales have been seen elsewhere.  Lots of works on paper are being seen at some of the art fairs.
Art Galleries and Museums

Major art museums and galleries

One of the things I did this year was to start investigating the relative status of different art galleries and museums.  This was when I began to realise that London was the #1 art capital by a very long way (see Top 10 Art Galleries and Museums and The Top Ten Museums in London)

Major Art Galleries and Museums and their exhibitions are extremely important to the tourist economy although few are aware of just how many visitors the top museums get. 

Many major museums are having extensions or are being spruced up at present - such as The British Museum, Tate Modern and the Musee Picasso.  Other cities saw the opening of major new museums in 2010.

Theft from major art museums happened rather too often in 2010. 

One of the major innovations for 2010 was the creation of apps to enable visitors to enjoy major art galleries and museums via their own personal smartphones.

Art galleries predictions for 2010 - and what actually happened

My 2010 predictions included the followingBelow I comment on how accurate they were 
  • most galleries will continue to be very slow in adopting changes to make art more accessible and affordable.  I do believe we might be turning a corner on this one. 
    • I've commented in previous years (see links at end) that galleries seemed to be generally very slow at getting on board with the Internet and digital technology
    • I'm beginning to see more and more evidence of art galleries beginning to understand that they need to get to grips with the Internet.  I'm coming to the view that the advent of the smartphone is largely responsible for this.
    • more and more art gallery blogs are appearing as the galleries (at last!) begin to appreciate  the scope for showing customers and patrons more information about the gallery artists and the work for sale.  I know of at least one which started up because one of the gallery artists is also a keen art blogger.
    • It's also been very pleasing to see some co-operative ventures like the Axis Art Map of Cardiff which embraced both artists' studios and galleries and enabled people to see what was located near to where they were.  It would be good to see more of this happening in 2011.
  • gallery owners who are managing their margins will take their art out of B&M galleries and into temporary spaces and their own home.
    • I think I was maybe being more pessimistic than I need have been.  I've certainly heard less from artists this year about art galleries failing/disappearing than I have in the previous two years. 
    • I suspect the worst of the recession had already generated the major shake-out and hit those which were vulnerable.  The more successful ones are now riding out the rest of the economic ripples from the economic storm that we experienced in 2008.
  • there will be more virtual exhibitions by those who appreciate the scope of the Internet for selling art.  There's a sense that more art societies and galleries are beginning to appreciate that there's a need to get art online as well as on display in a gallery.
What I have been seeing which I didn't predict are:
  • major art exhibition, with big set-up costs, staying longer in prestigious galleries (Fewer exhibitions cuts costs)
  • some exhibitions by organisations funded by artists and sales (eg art societies) tending to become somewhat shorter than they used to be.  This could reflect that most of the sales tend to come towards the beginning of an exhibition and extra days could be seen as an indulgence.  Alternatively galleries may need to review the cost and price structure for holding an exhibition.
Predictions for 2011

Technology and galleries get cosy!
  • iPad portfolios - I expect there will be more and more artists going into galleries - ipPad in hand - to show off their portfolio
  • more and more art gallery blogs - which is, when all said and done, the online version of the art gallery newsletter.
  • more dedicated exhibition blogs which feature art and artists in individual blog posts
  • more actual/virtual exhibitions: more exhibitions which are on display in the gallery and online at the same time
  • more smartphone/iPad apps for major art museums and galleries
    Selling Art Online

    Online sales predictions for 2010 - and what actually happened
    • Online sales income will continue to rise  In general, online spending is up 25% on last year.  There is no doubt that more and more spending will be online in the future.  There's no reason to suppose that this did not include a significant upward shift in relation to art bought lonline - in all its different forms and formats.
    • The credibility of trading venues will become more important to both seller and consumer - particularly as those less used to online purchasing get online.  The emphasis in 2010 has been less on the trading venue and more on the process for financial transactions.  There's been an increased recognition by the banks of the need for better security for those operating wirelessly from smartphones etc and much more emphasis on validating financial transactions.  This will help generate sales.
    • Etsy will do very well - and eBay less well.  In 2010:
      • Etsy continues as the premier online site for selling original art and crafts and continued to achieve respectable growth. The gap between it and the next most significant site gets bigger and bigger.  It has 12 times more visitors than the art part of eBay (In November 2010 Etsy had 6,565,904 unique visitors compared to eBay's 539,024 unique visitors.  Visitors are only counted once in a month no matter how many times they visit)
      • eBay art has been losing serious traffic all year.  Etsy's visitors have grown by 15% year on year while eBay's dedicated art shop site has seen a 37% decrease in visitors in the course of the last 12 month.  (see chart below)
    November 2009 - November 2010:  Etsy + 15% | - 37
    • Online gallery sites will look for endorsements from quality artists who sell well as a way of marketing their sites to other artists.  Lots and lots of "new/improved/the best" online gallery sites started up - and were never seen again by me.  None have yet persuaded me that they are worthwhile - other than etsy.
    In addition:
    • Governments which are scratching around to find ways of tackling their budget deficits have woken up to the extent to which they have failed to regulate e-commerce in an adequate fashion.
    • Zazzle is by far the most popular Print on Demand site (see Print Art on Demand - Resources for Artists) and is now also beating Cafe Press on traffic which makes it the the biggest POD website.
    • traffic to the Saatchi Gallery website has taken a major dive
    • Bonanzle died on its feet if the traffic chart produced by is to be believed
    • this blog gets more visitors in a month than a number of the smaller online gallery sites! (see Online Art Galleries and Stores - Resources for Artists)
    See Online Art Galleries and Stores - Resources for Artists and Print Art on Demand - Resources for Artists which both have:
    • charts which maintain an up to date perspective on the traffic to various online galleries and website services.
    • recommendations as to which sites to consider and which to ignore
    In 2011 - I predict that Regulation will get to grips with business practices online - in particular the scope for improved compliance with tax law and to reduce the scope for lost taxation and any areas where business practices may have been a bit too "relaxed"
    • those who have been less than frank with the taxman re sales and sales tax may be about to experience a bit of a shock as online sites are being required to get ready to co-operate with taxation bodies in various countries
    • advertising standards for online sites are about to be tightened up and in the UK will come under the scrutiny of the Advertising Standards Authority
    Plus Etsy and Zazzle will continue to rule the roost in relation to sales 

    Art Shops and Art Supplies

    It seems to me that very little has changed in the last year and that predictions on the whole remain the same year to year.  It's actually rather depressing.

    my predictions for 2010 - and what actually happened
    • more and more generic art shops will begin to look like craft centres.  I don't see many "ordinary" art shops any more.  Those that do exist tend to stock very basic materials which can be bought cheaper online and are very much aimed at the hobby/leisure artist.  They also look like they'd far rather do business with the scrapboooker.  The UK High Street seems to be going down the HobbyLobby route (HobbyCraft in the UK) which is depressing beyond belief.
    • highly specialised shops will continue to be popular.  In 2010, I've not heard any complaints of favourite art shops going out of business and all the ones I use are still up and running - although there has been an element of rationalisation in branches of chains.  (You'll find examples of shops I use or have used in my information website My Favourite Art Shops - Resources for Artists).
    • More and more online suppliers will get competitive over shipping costs.  My impression is that the competition in 2010 has tended to focus around the cost of the art materials rather than shipping costs - although there have been periodic offers of free shipping for short periods.  The "special offer" strategy tends to also be more successful in prompting people to take a look and then making a purchase,  My own personal routine has been to focus on using up what I've got rather than ordering new supplies!
    What's even more depressing is that in 2010 there are so very few art fairs which have a decent range of art materials.  I used to be able to go the annual event at the Business Design Centre in Islington and spend all day there just rambling around the various stands and spending an inordinate amount of money. 

    While I do appreciate the online suppliers, I do also feel it's very important to continue to support the specialist art shops otherwise we'll soon be reduced to a state of affairs where we can only buy art materials online.

    One of the few bright spots in 2010 was Derwent starting a blog - called LovePencils which to my mind is an excellent way of keeping consumers engaged with product when they can't touch or see it in their high street.  Would that more manufacturers would do likewise!

    My prediction for 2011 is that the general trends of the past few years will continue
    • more and more high street stores which stock less and less,
    • a fairly healthy online market which endures price competition and
    • a very few specialist shops which are like an oasis in a desert.
    To finish I'll quote from last year's post.
    For me the moral of the tale is that if stockists tend to go for the basic and generic only and expect that will keep everybody happy they'll get a rude awakening at some point. In my experience the people who are likely to spend serious money and become repeat customers over time are the people who have very specialised wants. They tend to search out the niche provider to satisfy their needs and you can only extract their cash if you give them what they want.

    and finally.......

    Deborah Paris recently sent me a copy of her new book to read and review.  It's really very good indeed.

    While I've not yet got round to giving it a formal book review I can say that I am very happy to recommend Studio & Business Practices for Successful Artists by Deborah Paris who is a a successful full-time professional artist and art tutor.

    It's chock full of sound advice and practical tips for aspiring professional artists and those seeking to improve their art and their business as an artist.  A slim volume - but a very good read and a book which will be referenced again and again.

    If you like reading about what the past year look like in previous years try checking out the following:

    1 comment:

    itsuko K said...

    This is very instructive post and I am very impressed by your insight for the art world next year.
    I live in Japan and some part of this article may not apply Japanese art world (selling ART online has not been popular yet) , but still very much interesting to know the overseas market trend for those who tries to sell at etsy like me. Thank you.

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