Is the market a bubble ready to pop?

Executive Summary

The market for artwork is a paradox: increasingly global and celebrity-driven, yet just as likely to take root in a New Orleans park or an online website as a high-end Manhattan gallery. Its products range from paintings and sculpture to prints, antique tea sets and furniture, even Banksy graffiti. It’s a major employer, accounting for more than 6 million jobs worldwide, and at its highest levels is driven by rich people getting richer: a mixture of supply and demand, greed, desire, and socializing, to the clink of Champagne flutes. The market has repeatedly set record prices, but experts warn it could be a bubble primed to pop. Yet online sales are growing, and investors are hunting for the next big thing, including African art. Among the issues under debate: Is the art market like the financial market? Does the art business reward artistic merit? Is globalization harming artists and the art market?

Resources

Bibliography

Books

Findlay, Michael, “The Value of Art,” Prestel USA, 2014. An art dealer looks at the financial, social and intrinsic values of buying art through the prism of recent art purchases.

Polsky, Richard, “I Sold Andy Warhol (Too Soon),” Other Press, 2009. An art dealer’s gossipy, autobiographical look at the overheated market for Warhol and other contemporary artists. A fun insider read on the art market.

Thompson, Don, “The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art,” St. Martin’s Griffin, 2010. An economist’s behind-the-scenes look at the paradox of art economics and the machinations that create art superstars.

Articles

Baker, Stephanie, and Hugo Miller, “The Billionaire, the Dealer, and the $186 Million Rothko,” Bloomberg Markets, April 27, 2015, http://tinyurl.com/pknhtbk. A Russian billionaire collector sues his longtime art dealer for fraud, highlighting the need for regulation in the private art market, where half of all sales occur.

Crow, Kelly, “The Gagosian Effect: How the powerful art dealer uses his global network to fetch ever higher prices for his artists. Can it last?” The Wall Street Journal, April 1, 2011, http://tinyurl.com/z7oft6x. An in-depth look at gallery owner Larry Gagosian’s business ventures, approach and powerful connections.

Davidson, Adam, “How the Art Market Thrives on Inequality,” The New York Times Magazine, May 30, 2012, http://tinyurl.com/zdwyqnz. Fine art signals wealth—and high prices are a sign the wealthy are doing well. And that means a lot more jobs for art advisers and consultants.

Deresiewicz, William, “The Death of the Artist – and the Birth of the Creative Entrepreneur,” The Atlantic, January-February 2015, http://tinyurl.com/mac6otv. A look at the sea change in how artists have been viewed and labeled over hundreds of years: from artisans and apprentices in a studio to solitary genius to artist as professional and onward to artists as entrepreneurs with websites that sell their work.

Gamerman, Ellen, “Business Looms Larger in Art Classes,” The Wall Street Journal, Feb. 18, 2016, http://tinyurl.com/hnw8c34. Instead of studying famous artists, today’s art students are learning about spreadsheets and art auctions. Christie’s and Sotheby’s have added specialized courses and master’s degrees.

Jones, Susan, “Artists’ low income and status are international issues,” The Guardian, Jan. 12, 2015, http://tinyurl.com/jvfdxvm. Even in countries with strong subsidies and grants for artists, creatives’ earnings are low—and in Canada, only 43 percent of artists made money from their studio practice.

Sheets, Hilarie M., “The Resurgence of Women-Only Art Shows,” The New York Times, March 29, 2016, http://tinyurl.com/gwlxcxs. Galleries and museums are planning women-only shows as a way to cultivate new clientele. Some experts say disparities in the art world still loom large.

Werner, Anna, “A treasure hunt for undiscovered American artists,” CBS Sunday Morning, Nov. 9, 2014, http://tinyurl.com/mgcmue6. A look at a nine-month journey into small towns and artists’ studios seeking new artists for an exhibit about American artisans.

Zarya, Valentina, “Meet The Artist Who Paints the Stock Market,” Fortune, Jan. 12, 2016, http://tinyurl.com/gqlvrhp. Artist Sarah Meyohas attempts to fuse art and commerce by trading stocks, then painting their movements. (Her previous project was called “BitchCoin.”)

Reports and Studies

“Artists and Art Workers in the United States,” NEA Research Note #105, National Endowment for the Arts, October 2011, http://tinyurl.com/j7aruhl. Data on jobs and pay for artists, including musicians and others.

“The Contemporary Art Market,” Artprice.com, http://tinyurl.com/h2b2fkw. One of several resources that shows pricing in the contemporary art market annually.

“Cultural times: The first global map of cultural and creative industries,” United Nations Educational, Scientific and Cultural Organization, December 2015, http://tinyurl.com/ha5zvyj. A look at the “complex and colorful canvas” of creative industries by global region, their job creation and economic impact. Asia-Pacific is the world’s largest creative/cultural industries market with 12.7 million jobs in book publishing, newspapers, video games and more.

“The Hiscox Online Art Trade Report 2016,” Hiscox, 2016, http://tinyurl.com/j5oxw9a. Data and trends in online purchases and the 40 largest online sales outlets for art are available in this report by London insurer Hiscox.

“Skate’s Annual Art Investment Report, 2015,” Skate, 2015, http://tinyurl.com/zjhypns. Report by an art information company compiles extensive data on artists’ sales; shows the most valuable artists; ranks the artists who lead the auction market; and lists the most valuable works sold in 2015.

Prendergast, Canice, “The Market for Contemporary Art,” November 2014, http://tinyurl.com/gsyu66c An economics professor describes the “winner-takes-all” approach and unusual pricing models of the art market after he bought art for the business school.

The Next Step

Art Marketing and Branding

Johnson, Paddy, “Do Artist Branding and Hollywood Talent Agency Deals Kill an Artist’s Soul?” Artnet News, Feb. 25, 2015, http://tinyurl.com/zapvve2. A Hollywood talent agency’s decision to start representing visual artists sparked questions in the art world about whether those artists can maintain their creative integrity.

Mor, Ricardo, “Art Basel too aloof from the community,” Miami Herald, Nov. 30, 2015, http://tinyurl.com/z347apx. The giant art fair Art Basel in Miami Beach has become detached from its local roots as it has rebranded and marketed itself globally, an art critic says.

Artists and Collectors

Furness, Hannah, “Art world is ‘hotbed’ of corruption, collector claims,” The Telegraph (U.K.), June 2, 2016, http://tinyurl.com/z6zlj4d. British curator and commentator Kenny Schachter says the art world is immersed in secretive dealings and greed that has led to money laundering.

Grant, Daniel, “Artists Find Reason to Buy Back Their Own Work,” The Huffington Post, May 16, 2016, http://tinyurl.com/gomrudv. Some well-known and wealthy artists are bidding against collectors at auctions for their own works, often to deal them elsewhere or to protect their markets by buying pieces that otherwise might not sell.

Hube, Karen, “How Art Can Blow Apart Your Estate,” Barron’s, June 18, 2016, http://tinyurl.com/z4rxwxz. The IRS is scrutinizing appraisals of artworks above $50,000 and often demanding adjustments in value that lead to unexpectedly large tax bills for collectors.

Digital Art/Online Galleries

Krentcil, Faran, “You Can Now Buy Gia Coppola’s Art on The Outnet,” Elle, Dec. 7, 2015, http://tinyurl.com/hrxo2ja. The discount shopping website The Outnet began an online store selling paintings, sculptures and illustrations.

Smith, Russell C., and Michael Foster, “Talking With a Top Curator at Amazon Art, on the Fine Art of Reinventing Art Buying,” The Huffington Post, March 31, 2016, http://tinyurl.com/z7jo9mw. The senior manager of business development for Amazon’s art-sales venture discusses how she is trying to reach a wider audience.

Sparks, Heather, “Digital Art’s Mainstream Moment,” iQ by Intel, July 23, 2015, http://tinyurl.com/jhlo8oz. Practitioners of digital art, also known as ldquo;new-media art” and “tech art,” seek to change how people think about technology while influencing its evolution.

Forgeries and Fraud

Neuendorf, Henri, “Can DNA Verification End Art Forgery Forever?” Artnet News, Oct. 12, 2015, http://tinyurl.com/gvaseo8. In a study that several prominent artists have supported, researchers at the University of Albany and fine-art insurer ARIS have developed technology that could provide artworks with a unique synthetic DNA tag to verify their authenticity.

Taylor, Jeff, “The Secret to All Great Art Forgeries,” The New Republic, Jan. 6, 2016, http://tinyurl.com/hlg5hxp. Successful forgers not only have been able to create convincing fake works but also to understand how to corrupt the methods that the art world uses to determine authenticity.

Organizations

Art Dealers Association of America
205 Lexington Ave., Suite #901, New York, NY 10016
212-488-5550
http://www.artdealers.org/
Membership organization for fine-art galleries to promote scholarship and ethical practices; also seeks to help law enforcement track forged artworks.

Arts Management Network
Bauhausstr. 7c, 99423, Weimar, Germany
+49 (0) 3643 7402612
http://www.artsmanagement.net/
International organization that shares information, education and book directories on arts and business topics.

The Association for Cultural Economics International
c/o Juan Prieto-Rodriguez, executive secretary-treasurer, Department of Economics, Facultad de Economia,Universidad de Oviedo Avenida del Cristo s/n, 33006 Oviedo, Spain
+34- 985103768
http://www.culturaleconomics.org/index.html
Scientific organization with members from academia, foundations and arts organizations who study economic aspects of the arts and culture. Also sponsors the Journal of Cultural Economics, which publishes research and academic papers and studies.

General Services Administration Fine Arts Home
Art in Architecture and Fine Arts; U.S. General Services Administration, Public Buildings Service; Design and Development, Office of the Chief Architect
1800 F St., N.W., Suite 5400, Washington, DC 20405
http://www.gsa.gov/fa/#/about-the-collection
Searchable index of paintings, sculpture and other creative work owned by the federal government. Items date from 1850s to the present and are on loan to museums, courthouses or in government buildings.

International Art Alliance
2840 West Bay Drive, # 250, Belleair Bluffs, FL 33770
514-935-1228
http://www.thegreenhousesite.com/website_links.html
Publisher of directory of corporate art collections and related information on businesses buying art, photography and other creative work.

International Foundation for Art Research
500 Fifth Ave., Suite 935, New York, NY 10110
212-391-6234
https://www.ifar.org/collectors_corner.php
A nonprofit, member-based research organization on art law, authentication, collectors’ rights and more, with a journal and programs for collectors, including roundtables.

National Endowment for the Arts
400 7th St., S.W., Washington DC 20506
202-682-5400
https://www.arts.gov/about-nea
Federal agency that supports arts education and programming with data, grants, achievement awards; also publishes a variety of reports.

Working Artists and the Greater Economy (W.A.G.E.)
Brooklyn, NY
http://www.wageforwork.com/
Activist group pressing nonprofit art museums and organizations to pay artists for their work, and for agreeing to exhibit or speak.

DOI: 10.1177/237455680214.n1