Sunday, December 23, 2012

Reviewing Art Business in 2012

Part 2 of a review of the art business in 2012 
plus predictions about art business in 2013

This is the second of a two part "who's made a mark this year?" annual review of art from the perspective of an independent art blogger. (See also the first part - Reviewing Art on the Internet in 2012). It focuses on a macro perspective on the world of art in 2012 and my perspective of how the business of art changed in 2012.  Inevitably this tends to be somewhat London-centric.  It covers:
  • the art economy 
  • art media and genre 
  • art galleries and museums 
  • selling art online 
  • art shops and art supplies 
It highlights:
  • what stayed the same in the art business in 2012
  • what aspects of the art business changed in 2012 - and how I did on my predictions for 2012! 
  • What did I miss and what did I get right?
PLUS I make some predictions about the art business for the coming year - and please note some are rather more tentative than others!

I'd be very happy for you to share, via a comment on this post, with other artists reading this post what you saw as the major changes in 2012 - what surprised you, what dismayed you and what have your sustenance for the coming year.

The Art Economy - a macro perspective 

My predictions for 2012 - and what actually happened

  • 2012 PREDICTION: The double dip recession will arrive (if it hasn't already) and may well continue all year. That's when it gets bad (2008), gets better and then gets bad again. We're now entering the second round dip of depression. My gut feel is that this could be a long one with a slow recovery.  The main problem at the moment is nobody is confident as to when this will end.  ACCURATE  There were three quarters of negative growth between the end of 2011 and the middle of 2012.  Art consumers in the UK are feeling rather cautious.  Sales are happening but they're slow and the £1k is a very real psychological benchmark.  Most importantly, although the stats showed a 1% growth in third quarter of 2012 the current warnings are that we might be about to hit a TRIPLE dip recession.  As I feared last year, this could well be a long hard slog back to growth and confidence in the economy for people in the UK.  
Vince Cable, business secretary, has admitted there is “clearly a risk” of the UK entering a triple-dip recession and facing a Japanese-style lost decade of stagnant economic growth.Financial TimesCable says UK faces triple-dip recession 9th December 2012
  • 2012 PREDICTION: Sponsorship will continue to be a victim of "downsizing" by smaller companies. It may well be that your art society or local exhibition will suffer and you probably need a plan for "what if".  ACCURATE This is the first year that I've seen a major loss of sponsorship of awards and prizes right across the piece.  While some new sponsors are coming forward, my gut feel is that it doesn't make up for the losses.  All those organisations who rely on sponsors need to be giving them risk-assessments at the same time as you cosset them!
  • 2012 PREDICTION: Sales at the top level will be "bumpy" ACCURATE Sales via major art auctions have continued to be all over the place.  Major works not selling in some auctions and then record sales weeks later.  One can't help but wonder at times whether there is an attempt to massage the market to restore confidence.  An alternative perspective suggests it's about finding a place to spend cash which currently isn't earning any interest.  There again an awful lot of bankers are losing their jobs.......  
  • 2012 PREDICTION: Lots of effort will be applied to working out how to make it easy for people to pay. For example, paying a small sum each month is a lot easier to do than to pay out the full price of a painting. ACCURATE  I'm hearing very positive noises about how much the OwnArt scheme has helped both artists and galleries stay in business.  Collectors have told me that the existence of the scheme makes a difference to their decision on whether or not to buy in the current climate.  Artists should certainly been looking to be involved with galleries that use this scheme.
  • 2012 PREDICTION: There will be more emphasis on training people in how to generate funds.  UNSURE If anything is happening they're keeping it very quiet.  I tried googling different phrases to see what turned up and the net result was virtually nothing.  I refer people back to the first and second points above - let's hope things start to change in 2013.
Prospects for 2013
  • 2013 prediction: The tax man cometh - possibly with some very big bills for unpaid tax.  In the UK, we've been learning of late about individuals and companies who have been paying very low levels of tax - as in depriving the economy of proper levels of tax paid. I wouldn't be in the least bit surprised if there have been some "funny goings on" linked to the high end of the market where significant funds change hands.  HMRC's new focus on tackling industries, companies and individuals that have engaged in various dubious practices to evade/avoid payment of tax may well catch up with transactions in the art market in 2013.  If it does happen then it should make for some interesting stories in the press that don't end up being spiked by editors (see The most interesting stories are libelous in Sarah Thornton's Top 10 reasons NOT to write about the art market).
  • Portrait of Isabella Stewart Gardner
    (a renowned art collector) 
    John Singer Sargent (1856-1925)
    Oil on canvas, 190 x 80 cm
    Isabella Stewart Gardner Museum
    2013 prediction
    The UK faces a real risk of entering a triple dip recession with further loss of confidence in consumer spending.  I believe Vince Cable.  He is known for saying the unpalatable irrespective of whether it is politically correct. However he did predict that "The most likely outcome is that we continue bumping along the bottom."  The implications for art galleries and artists is that the current economic challenges for the art business as a whole will continue for the foreseeable future.  All business strategies and plans should assume this to be the case.  The likely outcome will be costs will be cut again, sponsors may be less than enthusiastic and the public's confidence in buying art will continue to be deflated in relative terms 
  • 2013 prediction: Sales below £1,000 will do better than sales above £1,000.  I've been noticing again and again in exhibitions that sales are much better below £1,000 than above it. 
  • 2013 prediction: Artists will cosset their art collectors and find new ways to make them feel special.  Sales above the £1,000 are often to existing collectors or those that know them.  It's much more effective to make sales to existing collectors than to new ones.  Hence artists who are routinely selling above £1,000 need to make sure that their collectors feel important and special.
  • 2013 prediction:  There will be a focus on improving the commissioning process so that those with funds get what they want and/or show off what they own e.g. paintings of their favourite people / animals / houses / artifacts.  Commissions are also a good way of 
Art Media and Genre
My predictions for 2012 - and what actually happened This is a review of the business of art - hence predictions do not relate to those who produce art for their personal pleasure and have an income or other support independent of any profit they generate from their art.
  • 2012 PREDICTION: Artists will continue to focus on trying to find subject matter and formats that people will buy on a consistent basis.  ACCURATE  There's a limit to how long people are happy to go down the starving artist route.  If you paint to live, then ultimately at least some of your output has to be capable of being sold.  This is an ongoing theme - although not one which people talk about a lot.  I note artists developing different subject matter and approaches and I know that for many at least some of this is about trying to find a way of improving sales.
  • 2012 PREDICTION: More artists will need to analyse the real costs and benefits of different media and formats. Artists can't afford not to know what sort of return they get on the different types of art they generate. UNSURE While I think a lot of artists are thinking more about costs, I'm not at all convinced that many of them have done an analysis of what their paintings cost to produce.  I know a few do, but I regard them as being the exception rather than the rule.  What genuinely surprises me is that there is little evidence that the situation has changed much in recent years despite increasing economic challenges and fluctuations in sales.
Prospects for 2013

I walk around very many exhibitions during the course of a year and look at an awful lot of art.  Whatever talent I had before I started for 'spotting' good artwork has certainly been honed by reviewing so much art.  I can now almost always tell which art will sell and which art will hang on the wall of an exhibition without even a sniff of interest.

It emphatically is not about a particular genre per se (although some have proved more robust in the face of economic challenge than others) or size or media.

In my opinion, it's almost always about the impact, its inclusion within a coherent body of work and the way in which the artist has used and developed the media.   Good neutral framing also helps! 

For example, work hung in a group of similar artwork by the same artist invariably looks better than it does on its own - it has more impact.

I often stand and look at art from about 30 feet away so that I can assess the impact before I read who painted it and whether or not is had won a prize or sold.  I find the websites of artists also convey very well those who understand about the effect of presentation and impact.
  • 2013 predictionBoth the 2012 predictions should also apply to 2013.  Artists aiming to earn an income from art will or should:
    • focus on trying to find subject matter and formats that have consumer appeal (ie sell!)
    • analyse the real costs and benefits of different media and formats (ie maximise profit)
  • 2013 predictionSpecialist genres will continue to be relatively stable in terms of sales.  During the first of the recent recessions, genres which have an established collector base who are passionate about the subject matter or type of art (wildlife art, animal art - particularly horses, dogs and cats, botanical art and miniature art)  continued to do relatively well on sales.  I'd expect this trend to continue.  As indicated above, collectors tend to go for repeat buys.  I've observed in previous years that those who jealously guard their mailing lists of past purchasers and cosset them with Buyers' Previews seem to do rather better.
  • 2013 prediction:  Fine art hand pulled prints on paper will continue to sell well.  They're original, they're affordable and they look like "proper art" in a way which photos or photorealistic art sometimes does not.
Art Galleries and Museums
My predictions for 2012 - and what actually happened
  • 2012 PREDICTION: Essentially business as usual but more so and with a particular emphasis on being cost-effective.  Prestigious / publicly funded museums and galleries will 
    • pursue blockbuster exhibitions UNSURE  I think the intent is there but the bugdets are sometimes not big enough. The blockbuster is almost always wholly dependent on securing major financial sponsorship.  Given the fact that a number of the  investment banks have been facing difficult times since some of their less savoury activities came to light they're now facing big fines and I'm guessing money for sponsorship of the arts is less readily available.  Unless you're a company needing to rebuild its reputation.....
    • increase charges for special exhibitionsACCURATE  the trend seems to be towards ticket prices increasing faster than inflation
    • keep costs down by repackaging the in-house collection as an exhibition - and then charging people to see it! ACCURATE  The current landscape exhibition at the National Gallery has been suggested to me as a case in point.  It's charging people to see paintings which can normally be seen for free - plus it minimises the costs of transport involved.  There has to be a lot of educational and additional content to make this approach valued by exhibition visitors - as opposed to going away feeling like you've been ripped off.
    • continue the existing pattern of partnerships with other museums to defray costs and improve the quality of exhibits ACCURATE If anything I'm seeing more and more partnerships.  We seem to have a Premier League and First Division emerging as the smaller galleries start to engage with this strategy more and more!
    • promote bookable exhibitions. ACCURATE There's been a lot more promotion around bookable tickets in 2012.  It helps cash flow and also provides a mechanism for reminding people the exhibition exists while at the same time suggesting its' becoming a scarce commodity - which increases the appeal of an exhibition.  I did wonder how many of those in the queues for the Da Vinci exhibition knew what they were going to see!
    • pursue all avenues for generating additional income from associated activities or merchandising MIXED RESPONSE Active but yet optimising. Again the problem seems to lie with following traditional models for retailing.
    • reduce crime and the theft of artwork   UNSURE We're still seeing thefts of major works of art.
  • 2012 PREDICTION: more art will be sold through dedicated art fairs and more artists will aim to link up with one. The art fairs are popular with collectors, they get to see a lot of art in once place.  Good galleries now compete for a place at the good fairs.  ACCURATE (with caveats). There's no question that a lot of art gets sold at art fairs and (despite the costs involved) being able to get a slot at an art fair can make a very significant difference to the bottom line of a gallery - if it does it well and if it selects the right artists to exhibit.  
  • 2012 PREDICTION: more galleries will close but more artists may start selling art on the high street. Gallery closures will be driven by collectors preferring art fairs, the decline in footfall on the high street and the fact that people are being very careful with their cash.  Sales have dropped significantly for many artists.  MIXED RESPONSE I've heard about yet more closures of galleries and low levels of sales - and have also seen the dead websites.  However the shake-out seems to be reduced, probably because so many went in the first recession.  Unfortunately I've heard very little about artists and galleries devising a new and more robust business model which enables gallery spaces to stay open and show art.
  • 2012 PREDICTION:  more galleries will go online and more art will be digitized - it's one way of cutting costs MIXED RESPONSE  I look at a LOT of gallery websites over the course of the year, most of them in the UK.  In the last year I've NOT noticed a lot of change.  The leading galleries are presenting work well digitally and will continue to improve.  By way of contrast, those which are 'stuck in their ways' continue to behave as they have always done
  • 2012 PREDICTION:  a few galleries will begin to explore the latest feature of retail marketing ie multi-channel marketing (eg see it online, order it and pick it up in the store of your choice OR see it in a store and order it and have it delivered to your home).  UNSURE   I'm not convinced this has taken off - although it has to be the logical next step.
  • 2012 PREDICTION: The major art competitions and national art societies will need to work hard at reducing exhibition costs for artists if the exhibit is at some distance from home.  MIXED RESPONSE - I'm seeing more and more calls for digital artwork as entries for the screening stage of art exhibitions and open exhibitions by art societies.  This reduces travelling and/or courier costs plus framing costs are eliminated for work not selected for the next stage.  However I'm also seeing competitions (notably the BP Portrait) which has previously organised regional collection points and this year is not doing this.
Prospects for 2013
  • 2013 prediction: Artists and art galleries will begin to devise a new and more robust business model for selling art.  Businesses which survive and thrive are those which adapt to new contents and changing economic conditions.  I may be being optimistic here but I believe there is a better response than the traditional model.
  • 2013 predictionArt Galleries which want to survive will generate and/or improve virtual exhibitions for selling art on their websites at the same time as B&M exhibitions. This is a trend which is unfolding slowly - with the lead being taken by those who are realising a virtual exhibition offers an opportunity to capture sales in association with an exhibition.
  • 2013 prediction: Artists and Art Galleries will place more emphasis on private online previews for people who have bought work at previous exhibitions. Those who have bought before are more likely to buy again and a small number of galleries and societies run very successful buyer previews in galleries. This makes people feel special - the collector gets to mix with "people like us" rather than those who typically turn up to Private Views. The logical next step is to put these private online previews online so that those who cannot attend the preview can still review - and buy - the work before the exhibition opens to the public. 
Selling Art Online
My predictions for 2012 - and what actually happened
  • 2012 PREDICTION:  engaging with prospects and developing customer loyalty will become major priorities for all those seeking sales of their art online.  Those doing well may well be those who excel in this area rather than their art technique UNSURE   I've not noticed any great change in 2012.  While there may be more Facebook Pages around I'm not seeing a lot who use them well.  It's also not so easy to tell what changes have been made offline except via anecdote.
    • Some recognise the need to invest in relationship management and provide an excellent response
    • Some work hard at improving their response
    • A lot don't even recognise the need to spend time on customers as well as on producing art.
  • 2012 PREDICTION:  artists will develop/improve their branding and how artists present themselves to the world  To be memorable involves more than just painting a great painting. MIXED RESPONSE Most young professional artists have got the message - they need a website. (see below)  It's now fairly unusual to work my way through a list of artists whose work has been selected for a prestigious competition and find they don't have a website independent of any galleries they sell through.  Older artists who are "set in their ways" remain in their own ruts. Some professional artists work hard at their branding and raising their profile but they are a minority.  There's lots who could do better with a little help.
Artists wanting fodder for their thought processes may well find sustenance in my collection of "resources for artists" websites - which can all be found in How to sell art online.
What I didn't predict
  • More top artists now have good quality websites which are well organised and accessible  In 2012, artists selected for prestigious art competitions in the UK typically had (1) a website (2) which wasn't too difficult to find eg lots of artists now rank in the #1 top spot in Google for a search query which is their name and 'artist' or 'art'.
  • More and more artists are now using Facebook as a way in to their own sites.  The trick is to leave the person who stops by wanting more........
  • Some artists swear Pinterest has helped them to sell art in 2012.  Personally I'd be more persuaded if I saw the figures and if the artist in question relied on their art for their living.
See the two lists of posts I wrote about Facebook and Pinterest this year in Part 1 of this review.
Prospects for 2013
  • 2013 prediction: More and more artists are realising that they need to drive their own careers and not rely on a gallery which does not respond well to market changes, the influence of the Internet and indeed may well go under as a result.
  • 2013 predictionArtists will get better at using social media to promote art at the same time as they get more wary about using it.  Ownership and control of images on the social media sites is of primary concern. 
See also Reviewing Art on the Internet in 2012 for a focus on the impact of mobile technology on reviewing / selling art on the Internet
Art shops and Art supplies
My predictions for 2012 - and what actually happened
  • 2012 PREDICTIONhighly specialised shops will remain popular but will also be vulnerable to the recessionACCURATE  The specialised art shops that I know are still going and look healthy every time I visit.  However they also seem to have licked their online businesses into shape - so I guess there is a future for specialist shops so long as they meet expected standards for shopping online as well.
  • 2012 PREDICTION: more suppliers will copy those who already embrace social media as a means of communicating easily with customers  ACCURATE  I'm seeing more and more art suppliers with Facebook pages and active communication with their customers.  The problem is if they're not careful it can feel like endless advertising.  Some get the balance right while others need to have a rethink.  My recommendation would be to watch what all the competitors are up to (if they're not doing this already)
Prospects for 2013
  • 2013 prediction / recommendation: The better art shops and suppliers will develop and refine their overall marketing strategy within the context of a declining audience for print publications and the increasing development of social media - which is where all the advertising money is going
  • 2013 prediction / recommendation : Both manufacturers and suppliers may start to pay more attention to the influence of the artists who represent their art materials.  Obviously the primary consideration is whether or not an artist can provide a satisfactory demonstration of their art materials, however the scope of their social network may also become a consideration with respect to secondary marketing.
What happened in previous years
If you like reading about what the past year looked like in previous years try checking out my previous end of year reviews of "who's made a mark this year?" posts as follows:

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  1. I think you were right on this one: 2012 PREDICTION: There will be more emphasis on training people in how to generate funds.

    There have been numerous courses on how to fundraise for your own art business using crowdsourcing. One of the biggest business trends in 2012 I'd say. Even Artquest has run workshops on how to do it. So the training you predicted was just a change of direction in where that funding was coming from! :)

  2. Very true - I've seen numerous crowdfunding projects - although rather less feedback about whether they achieved their targets.

    Thanks for the reminder.


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