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Emilie Trice is a writer, curator and artist based in Denver, Colorado. Her writing has been published online by The New York Times, The Paris Review, Artnet and Artforum, among other outlets.

The numbers have spoken and 2021 was, reportedly, a solid year for the art market. 

Art Basel and UBS’s annual Art Market Report dropped this week. Authored by art economist Dr. Clare McAndrew, the report, in PDF form, is 279 pages long and full of aesthetically-pleasing data visualizations, covering such topics as “Online Sales and Strategies,” “Dealer Margins,” and the emerging NFT market, ie “Expenditure on Digital Art and NFTs” (spoiler alert: it’s 11%, but more on that later). 

The good news? The global art market is definitely up, with “aggregate sales of art and antiques by dealers and auction houses reaching an estimated $65.1 billion, up by 29% from 2020, with values also surpassing pre-pandemic levels of 2019.” (pg.14) 

Auctions in particular had a great year, with “public auction results” up an astounding 47%. This could be attributed to, among other notable sales, the iconic Macklowe collection—which Sotheby’s divided into two separate sales, the first of which achieved an eye-watering $676.1 million in November 2021 (the second sale is scheduled for May 2022).

The Art Market Report is a useful tool—a means to “zoom out” and get a sense of the art market’s overall economics, power dynamics, trends and (new) norms. It also divulges the buying behavior of a sample of HNW (“high net worth”) collectors, which it defines as “having a current net worth, excluding real estate and private business assets, in excess of $1 million.”(pg.209)

The report surveyed 2,339 HNW collectors—based on specific criteria, such as having spent a certain amount on art in the last two years—from ten geographic markets. However, the report’s authors also clarified that the respondents to said collector survey tended to skew somewhat younger, which should be taken into consideration when evaluating the results: 

“As in previous years, although the questionnaire was distributed across a broad range of age groups, the breakdown of qualified respondents was dominated by millennials (52%) and Gen X collectors (35%), reflecting the most currently active collecting segments in the market.

Boomer and Gen Z segments accounted for just 12% of the total respondents, with many screened out during sampling. The results of the survey therefore reflect findings from younger collectors that dominate the sample, although comparisons are given across generations where possible.” (pg.209)

Below, we’ve outlined some of the most important takeaways from the report, as well as notes on how best to utilize your Artwork Archive account to take advantage of these findings for your art business, whether you’re an emerging artist, a gallery owner, or an active collector.

***Similar to the infographics found in the Art Market Report, Artwork Archive provides artists, gallery owners, advisors, etc. with personalized data analytics of their unique art businesses and collections with the Insights feature, which offers a holistic view of art inventory, sales by location, revenue over time, and other important stats. 

A slight correction in online vs in-person art sales, but online sales continue to grow.

One surprising statistic is that, reportedly, “Online sales accounted for 20% of sales in the art market, down by 5% in share year-on-year but still more than double the level of 2019 (9%).”(pg.21) A spike of online art sales in 2020 is not totally surprising, considering the pandemic’s lockdowns were at their peak during that time.

Still, the data shows that online sales continue to play a critical role in the art market. In fact, “The shift to online was evident, with buying directly through a dealer’s website or OVR (online viewing room) more widely used (44%) than in-person gallery sales (42%). However, if choosing between offline and online, most collectors (69%) still preferred to view art for sale in person.”(pg.17) 

There’s also been persistent repercussions of the pandemic on the art fair circuit. In 2021, for example, 96 art fairs were canceled.(pg.54) Other fairs shifted around in the calendar in an attempt to circumvent pandemic-related travel restrictions—with varying degrees of success. 

Prior to the pandemic, fairs constituted a staggering 43% of revenue for galleries. However, the associated expenses and general staff burnout that art fairs engender made them a kind of necessary evil for many dealers.

While fairs have yet to return their pre-pandemic revenue gains for galleries, dealers seem to be doing fine without them—some even expressed relief at the chance to “step off the treadmill,” so-to-speak, and slow down during the pandemic. Overall, in 2021, art fairs represented 29% of gallery revenue, up from about 19% in 2020.

Without the art fair revenue many galleries had come to depend on, so-called OVRs (online viewing rooms) became a sales lifeline—not only for galleries, but also for fairs desperate to maintain a presence on the calendar. According to the report, in 2021, dealers increased their attention to digital, while collectors continue to become “more comfortable with buying online,” leading to an overall gain in online sales (despite the previously noted correction). 

Online sales were further bolstered by the art world’s adoption of more creative digital marketing initiatives, “including improving the content and functionality of websites and platforms, which has enabled greater ease and better experiences of transacting online.” (pg.234) All told, in 2021, the “online market continued to expand…to reach an estimated 13.3 billion USD.” (source)  

***Artwork Archive’s Private Rooms feature empowers every artist, gallery and advisor to create their own online viewing rooms, share with potential buyers and receive direct feedback on individual works. 

Rather than sending collectors a PDF that they must download and which may require decreasing image resolution in order to attach in an email, Artwork Archive account holders can simply select works for a private room, password protect it (if they choose), and share within the Artwork Archive platform, which will update contact records automatically with links to which private rooms were shared, with whom, and when.

Private rooms are interactive sales offers, which can also include embedded videos (such as process videos or interviews with artists), installation images of the works in situ, and other dynamic assets to enrich the art buying experience. 

Collectors are acquiring works by emerging artists, not just established names.

Returning to the HNW collector survey, the results indicate that emerging artists are currently in favor, a statistic that even seemed surprising to the report’s authors themselves: 

“While it is often reported that the wealthiest collectors focus only or mainly on top-tier or star artists, the evidence from this sample showed that in fact most hold a diversified range of artists in their collections, including a high proportion of new and emerging artists.”(pg.214) 

According to research conducted by Arts Economics and UBS Investor Watch, art collections reported from the survey sample included the following breakdown of works by emerging vs established artists (pg.214):

• 23% of works by new artists, that is artists who were new to the commercial market and not yet represented by a gallery; 

• 22% by emerging artists or artists developing in their careers that have been showing in galleries or museums for less than 10 years; 

• 25% by mid-career artists who had been showing for more than 10 years in galleries or museums, and with an established name or reputation, but not yet considered top-tier; 

• 30% by established or top-tier artists that have a strong and well-established secondary market in the auction and/or gallery sector, and that were currently selling regularly for prices in excess of $100,000.

Essentially, almost half of the art collections surveyed were comprised of works by emerging artists. This is excellent news for artists without gallery representation. With the rise of online art marketing and sales channels, including social media platforms such as Instagram, artists can now directly transact with collectors on levels never seen before in the art market. 

That increase in market access, as well as the growth of collector confidence in acquiring works online, could account for the substantial levels of emerging artists in art collections as demonstrated by the breakdown above. 

Another highlight from the collector chapter identifies local galleries as being of critical value to collectors, in fact “57% of collectors across all markets would prefer to buy from a local gallery in 2022 if given the choice.” (pg.240)

And, finally, collectors have a propensity to support the artists they love by buying numerous works, “As in 2020, many collectors were also only buying the work of artists familiar to them or whose work they had bought before (44% in 2021).” (pg.244)

***Artwork Archive’s CRM (contact relationship manager) is a fully-integrated contact database that links to sold artworks, syncs client reminders with calendars such as outlook and ical, and automatically lists purchases, invoices, and other details within each contact record. 

Grouping contacts into strategic categories allows messages to be sent to VIP collectors or other targeted client segments—ie New York clients, Advisors, Corporate curators, etc.—increases marketing efficiency, which leads to more sales.

Strengthening relationships, fostering new connections and keeping your client base in the know about upcoming exhibitions, events, new bodies of work and the like are critical best practices to growing any art business. Artwork Archive’s CRM makes it easy to keep track of all your business relationships, no matter where they might be in the sales pipeline.

The ascendent Digital Art Market—including NFTs—forges on.

For better or worse, “There are no signs that the interest in NFTs will abate in 2022. 88% of HNW collectors said they were interested in purchasing NFT-based artworks in future,” according to the report’s synopsis. (pg.254) In terms of collectors’ overall spending on digital art and NFTs, research suggests that collectors are spending, on average, 11% of their art budget on digital mediums.

Those collectors also skew younger (much younger); however, according to the report, “Across all markets, a majority (76%) of collectors had purchased an NFT of some kind in 2021 (not necessarily related to art), and the share was as high as 89% in the UK and 81% in the US and Taiwan, with younger and newer collectors in all regions having the highest take-up.” (pg.213)

In general, “Sales of both art and collectibles NFTs have grown from $4.6 million in 2019 to $11.1 billion in 2021,” while “the value of sales for art-related NFTs expanded over a hundredfold in 2021 year-on-year reaching $2.6 billion, with even greater growth in collectibles, to $8.6 billion.” (pg.41) 

While NFTs remain controversial, especially with regards to their environmental impact and issues with market manipulation, the report ultimately concludes that this new art market and asset class is likely here to stay. For artists working in time-based media, such as video art and creative coding (or “generative art”), this is great news.

For other artists, as well as their gallerists, the NFT phenomenon is a source of both anxiety and cautious optimism. While technologists work on solving the issues challenging the mainstream embrace of NFTs—such as high gas fees, the blockchain’s aforementioned carbon footprint, and other “barriers to entry”—it’s recommended that all art market participants educate themselves about this emerging technology and determine if and how it can accentuate their sales revenue. 

It’s also important to note that NFTs allow artists to collect resale royalties on all of their secondary market sales through the use of “smart contracts." Resale royalties have long been neglected in the art market—to the detriment of many artists—so this is one aspect of NFTs that is generally positive for artists and for the art market in general.

Smart contracts and resale royalties contribute to the significance of NFTs as a potential mechanism for a sustainable arts career because the typical “art NFT” is traded within 33 days of its primary market purchase: “In other words, on average, art NFTs are bought and resold within around one month (versus the average resale period on the art market of 25 to 30 years).”(pg.46)

Two of the thought leaders highlighted in Artwork Archive’s free webinar “NFTs: Friend or Fomo” contributed to the Art Market Report: scholar and NYU professor Amy Whitaker and Berlin-based artist Simon Denny. (If you missed the webinar, you can access the slides with educational links, as well as watch the recording, by clicking on the link above.)

For those still inherently skeptical about the longevity and usefulness of NFTs, Amy Whitaker makes an important comparison between NFTs and the grandfather of conceptual art himself, Sol LeWitt:

“While NFTs may seem new, their trajectory follows a longer arc from earlier attempts of art markets to create tradable forms around ephemeral art. Sol LeWitt’s certificates of authenticity that accompany Wall Drawings mirror the relationship of NFTs as readily accessible images for which only one person or entity (the certificate holder) can claim ownership. 

Yet because of the lack of singularity of digital works or their existence in infinitely many identical copies, NFTs can transform the ecosystem of digital images, establishing this aura of ownership and, in turn, digital provenance of artworks.”

Digital provenance is a key concept that Artwork Archive has always been actively working to support for more than a decade. Even if you’re not yet comfortable with blockchain technology, you can still digitally catalog and document your art online—safely and securely. 

Provenance is critical to ensuring not only that artworks are authentic, but also that those same artworks were bought and sold legally. As the art market navigates new legislature intended to cut down on money laundering and other financial crimes, digital provenance will continue to gain importance throughout the art world. 

To read the full 2022 Art Basel and UBS Art Market Report, click here.

***Artwork Archive account holders can create a digital provenance for every artwork recorded in their account. This data is stored in the cloud and accessible through any wifi-enabled device, both internally (to the account owner), and externally, if the account owner chooses to publish their artworks online—either via Artwork Archive’s public profile, or by embedding their Artwork Archive portfolio into their own website. To learn more about cataloging your art and creating a lasting legacy online (and IRL), read this.
 

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