Troubling AI

So the art world is a funny space. When people outside the art world ask me about this world it is always apparent they are thinking about the world, as it headlines. The large sales by Sotheby's or Christies, things that are in the newspaper. This is a space I do not belong to, but this is the space most people think anyone attached to the selling of art belongs to. To their utter boredom, I start to deconstruct the art world. One that is excellently navigated in "Seven Days in the Art World" (2008) by Sarah Thornton. The Art Market, the Art World does not exist. She cuts the Art World in her book into

• The auction (Sotheby's and Christies for example)
• The crit (Art Critics and their role)
• The fair (Art Fairs like Art Basel, TEFAF and all the other ones)
• The prize (Like the Tate's Turner Prize)
• The magazine (like the Art Forum Magazine or the Art Newspaper)
• The studio visit (artist spaces)
• The Biennale (Venice Biennale in Italy or Dokumenta in Germany)

In her breakdown she does not include museums or art dealers or galleries, primary or secondary market (we are primary, the art has never been sold). Museums are another world entirely and galleries and their role in the art world is seemingly unimportant even evil attributes to much of this world.

There are several tiers, and multiple interlocking facets, but definitely no one market. It is very difficult to define the Art World and also the Art Market. As it does not actually exist as whole or with any transparency. This also makes it difficult to collect data points, as well as it being susceptible to manipulation and intangible factors such as prestige and fetish playing into different facets of this world.

So the data I feed it, is not anything any of my university professors would sign off on. It is a lot of intangibles and vibes that influence the market.

In an academic article, we should be using primary sources, that would be the TEFAF report and the Art Basel Report, but their data is collected by dealers and institutions self-reporting. We know self-reporting is not a reliable method of data collection without other factors to keep it accountable. In actuality, most data is reported by large institutions as a form of marketing to keep buyers belief in a favourable economic space. People do not buy luxury items if they feel like there are troubling times, whether they have the money for it or not. They might even decide not to sell some of their collection, if they suspect it would lead to a lesser sale, ruining the business model of an auction house, whose income is dependent on people willing to sell objects of proven financial and cultural worth.

So all the data is not good data, but the only data we have of this opaque world. The interpretation of said data also has an influence on the market, so we also include secondary sources. The interpretation of the data by "experts" in the field. As why or why not people buy is very dependant on the different spaces people view art, but also by the vibes of the economy, their friends, politics and life.

TEFAF, The European Fine Art Fair, a yearly prestigious Art Fair held in Maastricht is one of Europe's biggest and most prestigious art Fairs. In 2020 they attempted to create a baseline of data on the art world. Art Basel in Switzerland, the most prestigious European Art Fair, had been making this report for a couple of years, yet the data is scrambled. There are so many markets, so many art spaces, so many levels to this world that its difficult to have data on this world. They also did not follow up on this data. 

The TEFAF speaks about patrons of the arts, people that donate to museums or buy

Summary of TEFAF's Annual Art Market Report 2020

Focus of the Report:

• The 2020 report highlights philanthropy and patronage in the arts, shifting from last year’s focus on the Chinese Art Market.
• It explores how modern patrons’ priorities differ from previous generations and highlights new patronage models amidst global sustainability, transparency, and social impact concerns.
• The report emphasizes the importance of private philanthropy due to public funding cuts for the arts.

Trends and Developments:

• Art patronage now includes a range of models from public-private partnerships to corporate patronage and artist-led initiatives.
• New art markets in Asia, Africa, the Middle-East, and Latin America are emerging with diverse patronage ecosystems.

Survey Insights:

• A survey of 541 individuals shows that 78% support charitable and non-commercial arts organizations regularly.
• 85% of baby boomers support the arts, compared to 77% of millennials and 78% of Generation X.

Philanthropic Behavior:

• 67% of patrons volunteer their time and expertise, with higher participation among millennials.
• 94% of patrons are driven by passion for art, and 80% believe their support makes a positive difference.
• 73% of millennials value connectivity and social networking as a key motivation for giving.

Ethical Considerations:

• The report addresses ethical issues in art patronage, influenced by social movements questioning the origins of donations.
• Technology is transforming art patronage through crowdfunding, blockchain, and social media, making support more democratic and transparent.

Key Models and Innovations:

• The report presents new models of art patronage, such as the Arab Fund for Art and Culture and the African Culture Fund.
• Case studies include corporate patronage in South Asia and private museums in Latin America.

Conclusion:

• The report aims to inspire art supporters by showcasing diverse and innovative patronage models, emphasizing the importance of purpose and the broader societal impact of art patronage.

Summary of "Art Market 2022" Report

Key Findings
The global art market experienced significant recovery in 2021, with overall sales reaching $65.1 billion, a 29% increase from 2020.
The United States, China, and the UK remained the largest art markets, collectively accounting for 80% of total sales by value.

Global Art Market in 2021
Sales Trends: Sales in the global art market increased by 29%, driven by high demand and market recovery post-pandemic.
Market Share: The US held the largest share (43%), followed by China (20%) and the UK (17%).
Online Sales: Online sales grew, accounting for 20% of total sales, highlighting a shift towards digital platforms.
NFT's: Sales of art-related NFTs surged, contributing $2.6 billion, reflecting growing interest in digital art.

Dealers
Sales Performance: Dealer sales rebounded, with a 17% increase from 2020, totaling $34.7 billion.
Costs and Margins: Dealers faced increased operational costs, impacting profit margins despite sales growth.
Online Sales: Online sales became critical for dealers, accounting for 33% of their total sales.
Challenges: Dealers reported challenges such as political and economic volatility, competition with auction houses, and sustainability concerns.

Auctions
Auction Sales: Auction sales rose by 47%, totaling $26.3 billion, with a notable increase in high-value lots.
Top Auction Houses: Major auction houses like Christie's, Sotheby's, and Phillips dominated the market.
Price Segmentation: High-end sales (over $1 million) increased, while lower-end segments saw more modest growth.
Geographic Trends: The US and China led in auction sales, driven by strong demand and high-value transactions.

Collectors
HNW Collectors: High Net Worth (HNW) collectors played a crucial role, with significant spending on art despite economic uncertainties.
Digital Art and NFTs: Collectors showed growing interest in digital art and NFTs, with substantial investments in this segment.
Buying Channels: Collectors used a mix of traditional and online channels, with increasing reliance on digital platforms for purchases.

Outlook
Market Growth: The outlook for 2022 was positive, with expectations of continued growth driven by strong demand and market adaptation to digital trends.
Challenges: Ongoing challenges included economic volatility, regulatory changes, and competition among market players.
Sustainability: The art market's focus on sustainability and environmental impact was expected to grow, influencing business practices and consumer preferences.

Link to report

Summary of the Art Market Report 2023

Global Art Market in 2022
Global Sales: Increased by 3% year-on-year to an estimated $67.8 billion, exceeding pre-pandemic levels.
Transaction Volume: Recovered from a sharp fall in 2020, with a marginal increase of 1% in 2022 to 37.8 million transactions.
High-End Market: Continued to drive growth, especially in the public auction sector where works priced over $10 million increased in value.
US Market: Retained its leading position with a 45% share of global sales by value.
UK Market: Moved to second place with 18% of global sales.

Dealer Sector in 2022
Growth: Dealer sales grew by 7% to $37.2 billion.
Performance: Higher-end dealers performed significantly better than those in the lower tiers.

Auction Sales in 2022
Total Sales: Slight dip of 1% to $26.8 billion.
High-Value Works: Works priced over $10 million were the only segment to see an increase.

Regional Performance
Europe: France saw a 4% year-on-year increase in sales to nearly $5 billion, reaching a new peak.
China: Declined by 14% to $11.2 billion due to strict zero-COVID policies affecting access and sales, falling to third place in the global market.

Outlook for 2023
Collector Sentiment: High net worth (HNW) collectors were optimistic, with 77% having a positive outlook for 2023.
Economic Conditions: Slower growth expected due to inflation, supply chain pressures, and geopolitical tensions, particularly affecting advanced economies like the US.
Potential Growth: The reopening of the Chinese economy and significant growth in India and China were expected to drive global growth.

Key Trends
Digital Developments: Blockchain and other digital innovations continue to lower barriers to entry and improve market transparency.
High-End Focus: Increased concentration of wealth among the global elite has helped the market's resilience and recovery.

Link to Report

Summary of Art Market Reports

The Art Basel and UBS Global Art Market Report 2024

• Market Resilience: Despite economic and geopolitical instability, the art market remains resilient with a 4% decline in sales to USD 65 billion in 2023, surpassing pre-pandemic 2019 levels.
• Top Markets: The US retains the leading position with 42% of global sales, followed by China at 19% (surpassing the UK) and the UK at 17%. France holds fourth place with 7%.
• Sales Dynamics: High-end market sales declined, while transaction volumes increased by 4%, indicating more activity at lower price levels.
• Online Sales: Online sales grew by 7% to USD 11.8 billion, representing 18% of total market turnover.
• Dealer and Auction Sales: Dealer sales decreased by 3%, with smaller dealers (under USD 500,000 turnover) seeing an 11% increase in sales. Auction sales dropped by 5% to USD 28.9 billion.
• Art Fairs: Art fairs contributed 29% to dealer sales, down from 2022 but still higher than 2021.
• Outlook: Mixed expectations for 2024 with 36% of dealers anticipating increased sales, 48% expecting stability, and 16% predicting a decline.

Link to Report

Summary of the Art Market, with a capital A, on 2023 by the Art Newspaper by Kabir Jhala 13 March 2024

This is an article by one of the editors, the Art Newspaper plays a significant role to younger collectors when reading it. The summary of their take away from the Art Basel report is also mentioned, as it a secondary source people usually get most of their art information from.

Overall Market Decline:

- Global art market value fell by 4% in 2023, from $67.8 billion to $65 billion.
- Decline attributed to decreased sales of ultra high-value works ($10 million+).
- Influencing factors: rising interest rates, high inflation, geopolitical instability.

Sale by Sector:

-Auction sales fell by 7%.
- Dealer sales dropped by 3%.
- Largest private dealers (annual turnover >$10 million) saw a 7% sales decline.

Regional Performance

- **United States**:
- Maintains a 42% market share, down 3% from last year.
- Domestic market contracted by 10%, from $30.1 billion to $27.2 billion.
- New York significantly impacted due to high-value work sales decline.

**United Kingdom**:

• Market fell by 8% to $10.9 billion, below pre-pandemic levels.
• $10 million+ category sales dropped 42% in value, 35% in volume.
• Imports of fine art and antiques fell by 16%.

**France**:

• The market saw a 7% drop overall.
• Auction sales down by 10%, dealer sales by 3%.

**China and Hong Kong**:

• Markets grew by 9% to $12.2 billion due to post-pandemic spending.
• Growth tempered by a property market crisis in China.

Other Observations:

• Increased global trading volume, with galleries earning <$500,000 seeing an 11% sales boost.
• Rising business expenses are a significant concern for dealers.
• Online sales remain robust, nearly double the 2019 levels despite being down from 2021 peak.

Market Sentiment:

• 36% of dealers optimistic about 2024 sales, down from 45% the previous year.
• Expected declines in interest rates and inflation provide some hope.
• The art market remains susceptible to financial, social, and political disruptions.

Link to article

To compare the different Art Basel annual reports and evaluate the relevance of their predictions for the coming years, here is first a summary of their key insights and predictions from the reports from 2022, 2023, and 2024

Art Basel Annual Reports Comparison and Predictions Relevance

Art Basel Report 2022
Key Insights:
- Global art market sales increased by 29%, reaching $65.1 billion, indicating significant recovery post-pandemic.
- The US, China, and the UK were the largest markets, making up 80% of total sales.
- Online sales grew substantially, making up 20% of total sales.
- The rise of NFTs contributed significantly, with $2.6 billion in sales.

Predictions for the Coming Years:
- Continued growth driven by high demand and increased market adaptability to digital trends.
- The importance of sustainability and environmental impact in the art market would grow.
- Ongoing challenges included economic volatility and regulatory changes.

Relevance of Predictions:
- The prediction of continued growth and adaptation to digital trends was relevant. The following years saw sustained online sales and the NFT market remained significant.
- The focus on sustainability and environmental impact became increasingly relevant as more art market players considered these factors.
- Economic volatility and regulatory changes were indeed challenges, aligning with the cautious optimism seen in later reports.

Art Basel Report 2023
Key Insights:
- The global art market value decreased by 4% to $65 billion due to high inflation, wars, and political instability.
- Sales of ultra-high-value works (over $10 million) declined significantly.
- The US market share dropped to 42%, with a notable contraction in the domestic market.
- The UK experienced a marked decline, falling below 2019 levels.
- China and Hong Kong showed strong post-pandemic spending initially but faced economic challenges later in the year.
- The global trading volume increased, indicating healthy middle and lower-tier market activities.

Predictions for the Coming Years:
- Expected declines in interest rates and weakening inflation might stabilize the market.
- Continued challenges due to economic, social, and political disruptions.
- Positive outlook for middle-tier galleries despite rising business costs.

Relevance of Predictions:
- The expected stabilization with declining interest rates and inflation was partially accurate as economic policies aimed to curb inflation.
- The prediction of ongoing challenges due to economic and political factors remained relevant, as these disruptions continued to impact the market.
- The positive outlook for middle-tier galleries was relevant, supported by increased trading volume in this segment.

Art Basel Report 2024
Key Insights:
- The global art market value fell by 4%, from $67.8 billion to $65 billion.
- Decline in sales of ultra-high-value works due to high interest rates, inflation, and geopolitical instability.
- The US market share dropped to 42%, with significant contractions in high-value sales.
- The UK market fell by 8%, with significant drops in high-value transactions.
- Strong early-year performance in China and Hong Kong, but economic malaise affected the latter half of the year.
- Increased trading volume, particularly among galleries with turnovers below $500,000.

Predictions for the Coming Years:
- Cautious optimism with potential for stabilization if economic factors improve.
- Continued impact of economic and geopolitical uncertainties.
- Potential growth in online sales and middle-tier market activities.

Relevance of Predictions:
- The cautious optimism for stabilization was reasonable, considering ongoing efforts to manage inflation and economic policies.
- The continued impact of economic and geopolitical uncertainties was accurate, as these factors persisted in affecting the market.
- The growth in online sales and middle-tier activities aligned with the increasing digital adaptation and resilient lower-tier market segments.

Summary of Predictions Relevance
Overall, the predictions made in the Art Basel annual reports for 2022, 2023, and 2024 were largely relevant and aligned with the actual developments in the art market. The reports accurately anticipated continued challenges from economic and geopolitical factors, the growth of digital sales channels, and the resilience of the middle and lower-tier market segments. The cautious optimism expressed in the predictions also matched the actual cautious recovery and stabilization trends observed in the art market.

My main takeaway from reading all the reports earlier this year, was what I sent to my artists. I will pull an extract from that e-mail:

Dear -,

It's been a while. The world is on fire, but also still turning. If you are interested in what that looks like in the art world. Here is a link to the Art Basel report on art, and all the other reports, from Artsy, Artsper. If reading reports are not your thing, it says pretty much that people are buying conservatively. Either from dealers they know or very established galleries. Most of the money went to art sold on the secondary market, Picasso's and Dali's for example, but their prices sold were significantly lower than what auction houses or blue-chip galleries are used to selling. However, hyper contemporary art aka you guys, living artists that made the art in the last twenty years, has exploded in sales amount, but not in price.

What I saw was that people bought a lot of artwork under 500-euro last year. Our sales were mainly based on collectors or their friends from sales from 2019 and early 2020. This corroborates Art Basel's reports that people were mainly buying from dealer they know. 

I was correct in my assumption late 2022 that art fairs (2023) would not be well visited. There has been a decline in in-person art fair visits over 2023, but there has been an increase in buying art at a gallery over 2023. There is an expected incline for 2024, but after my call with +ART FAIR+, they are at 4/5 exhibition capacity and lost a significant number of visitors last year. That is why they started selling the data of the people participating and visiting the art fair. The Art Basel Report thinks that art fair visitors will increase, but not higher than it was in 2022. My data being sold, really has left me with a sour taste in my mouth, and I can imagine that maybe visitors of the art fair may have this too. They also have told me, that they also informed me that they will have to refund the PR packages I have bought, due to staff shortage. I am going to sit +ART FAIR+ out and see what the repercussions in their visitors and exhibition numbers are and strategize for +ART FAIR+.