Analysis: One year into pandemic, the art world adapts to survive
18/03/2021 14:56
* Art market shrank by more than a fifth last year - report
* The rich got richer, cushioning the pandemic blow
* Art fair sales worst hit, experts say
* Auction house sales slip, but online business brisk
* Digital-only art explodes in popularity
(Adds description of gallery in paragraph 17)
By Brenna Hughes Neghaiwi and Barbara Lewis
ZURICH, March 18 (Reuters) - The hubbub that descends each
summer on a sleek exhibition hall in Basel, where collectors
snap up art and hunt for hot-ticket new talent, is likely to be
replaced this year by lines of socially distanced Swiss waiting
for COVID-19 vaccines.
The Herzog & de Meuron building usually hosts one of the
world's biggest art fairs in June, but last year's event was
cancelled due to the pandemic and this year's has been moved to
September. The adjoining congress centre, meanwhile, has been
turned into a vaccination hub.
The art world is reeling from the impact of lockdowns,
travel bans and social distancing, and fairs like Art Basel
suffered more than most. The business of buying and selling art
is having to adapt to limit the damage.
Global art sales fell 22% in 2020 to $50.1 billion, UBS and
Art Basel's Art Market Report published on Tuesday showed, the
steepest market drop since the financial crisis.
But the picture was uneven, as buying by the ultra-wealthy,
notably from Asia, held up.
In contrast to the 2007-2009 financial crisis, when many of
the world's rich lost money, the super-rich have become richer
during the pandemic as financial stimulus and volatile markets
served to increase their fortunes.
Big auctions houses, led by Sotheby's and Christie's, were
already used to telephone bidding and online sales, and so could
pivot relatively easily to appeal to cash-rich clients.
Both reported an overall dip but saw record online activity
and resilience among Asian buyers, while pre-pandemic trends of
interest in Black, female and living artists were reinforced.
This year, they hope to build on that, capitalising on an
influx of young collectors who have found the online world more
accessible than old-style auction rooms, and as more traditional
buyers yearn to return to the real world.
"There is enormous pent-up demand for experiences and even
spending, once there's a bit more stability and predictability,"
Sotheby's Chief Executive Charles Stewart told Reuters.
"We have the potential for just the biggest boom for a
period of time, assuming that we get to a place where people are
comfortable leaving their house."
BEEPLE
For Christie's, 2021 has seen spectacular confirmation of
the potential to create wealth from the virtual world as it
hosted a record-breaking $70 million digital artwork sale this
month. urn:newsml:reuters.com:*:nL8N2LA5UN urn:newsml:reuters.com:*:nL8N2L95XZ
In an online auction held over 14 days, bids on the work by
U.S. artist Beeple started at $100 and accelerated dramatically,
with 22 million visitors tuning in for the final minutes of
bidding.
Christie's plans to follow up on the success with further
sales of non-fungible tokens (NFTs), or artworks that exist only
in digital form.
More people appear to be willing to purchase artworks online
without seeing the real thing first.
"What we have observed is the simple behavioural truth that
collectors are more willing than ever before to buy from an
image," said Rachel Lehmann, co-founder of Lehmann Maupin, which
has galleries around the world.
But she added that the digital space presented a challenge
for artists and artworks that don't translate well into an
online image.
WINNER TAKES ALL
For German artist ANTOINETTE, lockdown was not all bad: the
cancellation of public events allowed her an extended stay in
the east German castle of Merseburg where she was working.
Using only pencils, she is creating intricate drawings on
5-metre high panels that form part of a multi-year project on
European cultural identity entitled "ALTAR of Europe".
Socially-distanced locals can watch her work through the
windows and ANTOINETTE said they had become her network.
"I've come to feel like a part of the community," the artist
told Reuters.
But if she is fulfilled artistically, financially her
situation is perilous, as commissions such as portraits have
dried up during the pandemic.
Smaller galleries are also struggling, experts say, because
the pandemic has accelerated the concentration of the art world
into fewer hands - very wealthy buyers and high-profile and
established sellers. https://reut.rs/2LNUmNW
"Compared to the last recession, when everybody's wealth
went down, in this one billionaire wealth has really risen," art
economist Clare McAndrew, who authored the Art Market report,
said.
"These things are good for art sales ... But it does bring
us back to our old problem of the infrastructure being very top
heavy and kind of winner-takes-all."
The UBS and Art Basel report found fairs accounted for 43%
of art dealer sales in 2019 but only 22% in 2020, just under
half of which were generated by digital events.
"The digital world is concentrating buying on what is
fashionable (on social media) and through the big galleries that
employ more than 100 people," said James Mayor, who has run the
Mayor Gallery in London since taking it over from his father in
1973.
Although he always attended Art Basel, he has avoided its
digital offerings, which he says are no substitute for the
real-life event. Some others agree.
"So far, digital formats have not replaced this as we
benefit from face-to-face interaction and the atmosphere of a
physical fair," Stefan von Bartha, director at Basel-based
gallery von Bartha, told Reuters.
It is not just galleries that suffer.
During a normal year, Art Basel's nearly 100,000 visitors to
the city help boost hotel room occupancy to almost full capacity
during the first four days of the fair, or by some 35%–60% over
average levels over the week, Basel's tourism office said.
SOUL SEARCHING
Galleries and advisers interviewed by Reuters anticipated a
recovery in demand for fairs and art tourism post-pandemic.
Art Basel has scheduled a fair in Hong Kong for late May.
Other major fairs, including TEFAF and Frieze, have said they
expect to proceed with live fairs in some format later this
year, complemented by digital participation.
But even before the COVID-19 crisis, some said there were
too many fairs, and galleries and collectors say they will be
more selective, sticking to the more local focus they have
experienced over the last year.
In Hong Kong, galleries report strong business as China made
an early recovery from the pandemic and the appetite for
contemporary Chinese art grows.
"People have become very used to the extravagance of big
fairs and big biennales celebrated in so many major cities," Leo
Xu, senior director at David Zwirner Hong Kong, said. "Honestly,
I don't miss that."
The gallery, one of Zwirner's six international locations,
managed to increase sales in 2020, Xu said, primarily through
outreach to wealthy, tech-savvy Chinese.
Also in Hong Kong, the Villepin gallery, run by former
French prime minister Dominique de Villepin and his son Arthur,
opened in March last year at the height of pandemic lockdown and
said it had done "very well".
In New York, gallery owners said there were positives,
including a much-needed reassessment that might mean peripheral
art fairs disappear, while Art Basel will almost certainly
bounce back.
Sean Kelly, who runs a contemporary art gallery in New York,
said the loss of art fair revenues has been offset by cost
savings from not attending.
"We have to start thinking about the cost of the art fairs
and I don't mean the financial cost. I mean the physical and
environmental cost," he said.
(Reporting by Brenna Hughes Neghaiwi in Zurich, Barbara Lewis
in London and Joachim Herrmann in Merseburg, Germany; Editing by
Mike Collett-White)
((brenna.neghaiwi@thomsonreuters.com; +41 58 306 77 35;))