BA Hons History of Art and Design

Major Theoretical Project

HAD6001-40

James Brown

To What Extent Have Digital Marketplace Platforms Democratised the Primary Contemporary Art Market Since 2010?

Georgina Savery-Smith

324557

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Table of Contents

INTRODUCTION 3.

Contemporary Relevance

Methodology and Structure

4.

5.

CHAPTER ONE: THE RISE OF THE INTERNET AND THE CREATION OF THE ONLINE ART MARKET

7.

CHAPTER TWO: THE DEMOCRATISING INTENTIONS OF DIGITAL MARKETPLACE PLATFORMS

9.

CHAPTER THREE: THE HIERARCHICAL STRUCTURE PREVAILS

Future of the Online Art Market

17.

26.

CONCLUSION 27.

BIBLIOGRAPHY 29.

APPENDIX 36.

SELF-EVALUATION 41.

STATEMENT OF ORIGINALITY 42.

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Introduction

‘Art as a luxury good is also remote; it is hard to access; it is often expensive.’ Abbing (2002

p.28).

The words of cultural economist Hans Abbing epitomise how the consumption of art within

the art market has long been thought of as inaccessible. The traditional Western art market

has historically been characterised by established hierarchies, significant barriers of entry,

the upper class and the close contact between elite members of society. This investigation

will attempt to determine whether or not the consumption of art has since been

democratised by the recent development and proliferation of digital marketplace platforms.

It will critically analyse the seemingly democratising features of this platform model,

considering their economic, political and sociological implications. Thus, this study will

examine the evolving state of the contemporary art market as it undergoes the process of

digitalisation. Furthermore, it will also assess to what intensity digital technology has future

potential to fundamentally alter the art markets powerful hierarchical structure and social

inclusivity. In the process, this study will attempt to reposition the online art market as a

significant and autonomous component of the art market. Proposing that at present, such

digital marketplace platforms have only had a marginally democratising effect on the pre-

existing wider art market.

The premise of democratising the art market in this study is based upon the dissemination

of artists, their artworks and art related information, amongst a greater variety of the

population. More specifically, those individuals who previously have not been in contact

with such art or have felt they were unable to access it. Hope and Ryan discuss the ethos

behind the democratisation of the art market, describing it as a ‘belief that every person has

the right to engage in the arts’ (2014 p.13). A concept which would arguably result in moral

and cultural benefits; as social scientist Kate Booth reiterates, if art is democratised ‘this is,

in and of itself, a good thing’ (2014 p.209). Despite Booth’s optimism, there are in fact

various differing opinions on the possibilities of a democratised art market, each of which

will be discussed during the process if this investigation.

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Contemporary Relevance

Despite being one of the most pressing themes shaping the art industry over the last decade

(2010- 2020), the digitalisation of the art market has arguably been largely ignored.

Therefore, making it a particularly important topic to address. Both Bishop (2012) and

Waelder (2013) comment on this absence, sharing a belief that the art world has

predominantly shunned, rather than embraced digital advancements. Art critic, curator and

researcher Waelder, for example, claims that institutions ‘have almost totally ignored’ the

development of the online market (2013 p.51).

The lack of attention paid to the online market’s expansion is further highlighted in recent

art market literature. There is a considerable lack of scholarly work discussing and theorising

the development of digital art platforms. For as scholar Elena Sidorva observes,

‘contemporary art market researchers do not pay too much attention to the phenomenon

of the internet as a powerful art market disruptive’ (2019 p.1). A number of theoretical art

market books, albeit including those which were published prior to the (2010’s) online

boom, do not mention the online market (E.g. Globalisation and Contemporary Art by

Harris). Those who do make note of the online market, including Georgina Adam (2014),

Noah Horowitz (2011) and Edward Winkelman (2017) only do so briefly and in passing.

Furthermore, comprehensive scholarly literature on the digitalisation of the art market is

few and far between. With only a handful of texts solely focussing on the subject, almost all

of which are in the form of journal articles rather than books. The academic novelty of the

subject is particularly astonishing considering the online market now stands as its own

important and autonomous segment within the wider contemporary art market, valued at

roughly $ 5.9 billion in 2019 (McAndrew 2020 p.242). In order to appreciate the significance

of the online sphere one must understand the size and scale of the total contemporary art

market. In 2019 the global art market was valued at ‘an estimated $64.1 billion’ (McAndrew

2020 p.17).

This topic’s relevance and significance has recently been highlighted during the current

(2020) COVID-19 crisis. Now deemed a global pandemic, COVID-19 has and will continue to

have dramatic consequences across the world. As a result of which, the art market is at

present experiencing considerable ramifications. The industry, comprising art museums,

galleries and events in which ‘business is typically conducted in person’ (Kazakina and Weiss

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2020) and in close physical proximity, has witnessed worldwide closures and

postponements on an unprecedented scale. Examples of closures include that of major

auction houses, Christie’s and Sotheby’s (Brady 2020). Due to such closures and

cancellations, institutions are precariously speculating as to their future as they are forced

into a digital corner, with those who can afford to scrambling to ensure the digitalisation of

their business. This includes smaller companies like Baltic Centre for Contemporary Art who

made a quick shift online (Sharratt 2020), as well as more prominent international

institutions such as Art Basel, who presented their fair online, displaying over 2000 works

(Pogrebin 2020). This has prompted radical changes to traditional art market interactions.

With hindsight, the art professionals and companies who had previously made the decision

to partially or entirely move online seem prescient, as digitalisation becomes critical for all

within the industry.

This investigation consequently arises at an interesting time where both the current and

future state of the art market is deeply uncertain. Raising the question, does the crisis have

the potential to be the catalyst of change, which will ultimately result in a permanent move

online for the art market? As the adapted digital market may evolve into the new, more

democratic industry standard (Brady 2020).

Methodology and Structure

In order to gain a better insight into the inner workings and intricacies of the online art

market and the wider art market in general, this study is informed by a combination of

primary research, market reports and thorough reading of the literature. Importantly, this

study uses qualitative research methods in the form of online interviews in order to provide

an in-depth sense of various art market perspectives. The online interviews were carried out

with two different online business models: firstly, market leader and digital marketplace

platform, Artsy and secondly, the smaller scaled digital gallery known as ModernArtBuyer.

Both interviews were based upon a series of questions regarding fundamental changes

within the art market, the extent of democratisation within the art market and the future of

the online market. The two interviews with those working in the digital art industry were

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complemented by an interview discussion with independent visual arts consultant, Andrew

Mummery.

Furthermore, this study also draws on an extensive range of academic sources, including key

art market reports, Art Tactic’s Hiscox Online Art Trade Report, which focusses exclusively on

the online art market and The Art Basel and UBS Art Market Report, which is commonly

regarding as the most wide-ranging report available. In general, this study will integrate

material from a variety of different case studies. By employing these assorted modes of

enquiry, this study attempts to illuminate the complexities of the online art market, the

contrasting opinions of its democratising effects and its place within the art market as a

whole. It should also be noted that the methodology of this study is complicated by its

contemporary nature, it is difficult to come to a comprehensive conclusion on this subject as

it is currently undergoing substantial changes due to COVID-19.

This study is composed of four main chapters. Providing a contextual background, the first

chapter begins by briefly summarising the technology boom and the rise of the internet,

concentrating in particular on the formation and evolution of the online art market.

Following this, chapter one then goes on to identify three important online business models,

examining the digital marketplace platform in particular. Chapter two discusses the

supposedly democratising characteristics of the digital marketplace platform within the

online art market. In doing so, this chapter measures the democratic abilities of digital

marketplace platforms on the basis of accessibility, audience size, dissemination,

transparency of information and decreased sale values. Having covered this, chapter three

goes on to reveal that the perceived democratisation of the art market, via digital

marketplace platforms, is to a large extent false. It proposes that the elitist and hierarchical

structure of the art market has remained unscathed, suggesting that digital marketplace

platforms have not had the disruptive and democratising effect promised. To support this

argument, chapter three will address the issues related to the internet and the select few

platforms which promote hegemonic ideologies. The remaining part of the study proceeds

to question the future state of digital marketplace platforms and the online art market,

taking into account the effects of COVID-19.

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Chapter One: The rise of the internet and the creation of the online art market

The proliferation of information and communication technology across the globe has

revolutionised the lives of those in the developed, western world. Ubiquitous, digital

technologies have affected all sectors of the economy, not excluding the art market. The

complex entanglement of digital technologies with the arts, ‘has changed the art market

almost beyond recognition’ since its inception (Flynn 2016 p. xxvii). Rapidly developing art

related technologies and the creation of e-commerce companies have greatly influenced the

way in which art is created, bought, sold and consumed.

The concept of selling art online is not a recent one. In conjunction with the rise of

technology, the online art market has been consolidating itself for three decades, as several

scholars (Sidorva 2019, Waelder 2013, McAndrew 2016) reference digital companies selling

artwork from as early as the 1990’s. Although, according to Fernandes and Afonso (2020

p.1) the majority of the digital art businesses created during this period lacked the success

and longevity needed to endure the collapse of the dot.com economy in 2000. The

Sotheby’s – eBay partnership, in which ‘tens of millions’ (Thompson 2014 p.243) was

invested, provides a representative example of such early failures. Following the economic

crash, a series of new digital companies, such as Saatchi Art began to emerge in the early-

mid 2000’s as the market gradually began to gain strength again. The steady development

of the online market continued up until 2010 when as Anna Dempster (2014 p.81) notes,

the online industry began to experience more exaggerated growth, with much work being

done to implement technology into the art market. Reflecting the wider economic market,

the continuing growth was primarily a result of people becoming more confident and

comfortable with purchasing goods online. According to renowned economist Clare

McAndrew, the following period from ‘2010 to 2014 was the key period’ (2016 p.163) in

which the industry saw consolidation and the accelerated arrival of several new e-

commerce companies.

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The innovative companies took the form of three notable business models - digital auctions

(e.g. Paddle8, Sotheby’s, Invaluable), digital marketplace platforms (e.g. Artsy, Saatchi Art,

Artnet) and digital galleries (e.g. Degree Art, Rise Art, New Blood Art). One of the largest

sectors of the online art market, digital auctions are predominantly formed from offline

auction houses, as in the case of Christies (online) and Sotheby’s (online). Their online

counterparts allow buyers’ to simultaneously bid online without a live auctioneer and

without ‘the social barriers of bidding at traditional auction houses, where you often have to

be of a certain status and wealth.’ (Le Journal de Artmarket Guru 2018). Solely online, digital

marketplace platforms remove the bidding element associated with auctions, instead

allowing buyers to purchase works in one simple click. Finally, digital galleries provide an

online version of the traditional art gallery, a model which can exist in either both online

and offline channels, or solely within the virtual online channel.

While each business model continues to function within the current structure of the

contemporary online art market, this study focusses in particular on the digital marketplace

platform. A platform which has witnessed considerable proliferation in Western countries

over recent years, due to the launching of a number of start-up companies. Digital

marketplaces revolve around the sale of multiple original works by various different artists

within one single space, the artworks can be uploaded directly by the artists (such as in the

case of Saatchi Art), or through traditional galleries (such as in the case of Artsy). Unlike

(online) auction houses however, marketplace platforms conveniently allow the buyer to

make an instantaneous, one-click purchase. At the forefront of this platform model are

companies such as, Artsy (2009) and Saatchi Art (2006).

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Chapter Two: The Democratising Intentions of Digital Marketplace Platforms

Digital marketplace platforms make for an interesting focus in relation to democratisation

for several reasons. Firstly, the last decade has seen this platform model gaining in

importance (Miegroet et al. 2019 p.131). According to Cain and Kaplan (2016), recent years

have seen digital marketplace platforms surpass digital auction sites ‘as the favoured

method of purchasing art’. Therefore, taking on a more prominent role within the online

sector of the art market. The prominence of this market model is further illustrated by the

interest of major insurance firms. As noted by Kangsan Lee within Art and the Challenge of

Markets, ‘HISCOX is further evidence of how markets and consumers are paying attention to

the numbers of this narrowed and specialised market.’ (2018 p.72).

Secondly, the primary purpose and intentions of such platforms has been to democratise

the art market. The very existence of these sites indicates a shift towards democracy. Upon

arrival, digital marketplace platforms had promised to dismantle the existing hierarchical

structure of the traditional art market (McAndrew 2016). Art historian Tom Flynn recognises

the objectives of the marketplace platform in his work titled The A-Z of the International Art

Market. Although principally a reference for definitions, Flynn’s book provides a

comprehensive and wide-ranging look at the global art market. Flynn observes platforms of

this form to be ‘a new breed of art market ‘disrupters’ … bent on sweeping aside what they

see as the sclerotic, containing structures of the traditional market ‘(2016 p.xxvii). The

democratic intentions of marketplace platform business models are evidenced in their

mission statements, for example according to Saatchi Art’s mission statement, their goal is

to ‘promote new, contemporary talent and bring great art to a wide audience’ (Saatchi Art

2019). Digital marketplace platforms have attempted to democratise the art market through

the following methods: encouraging social inclusivity, removing barriers, targeting a wider

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audience, encouraging new buyers, disseminating information and encouraging lower value

sales.

Firstly, and in contrast to the traditional offline market, digital marketplace platforms aim

for social inclusivity (Milano 2019, Arora; Vermeylen 2013, Hope; Ryan 2014). They are

(intended to be) inherently social; as Milano notes, such platforms are ‘socially inclined

(2019 p.12). One of the key elements of the digital marketplace platforms is their ability to

facilitate social engagement and connect people online. Referencing Artsy, Robertson writes

that ‘The platform makes connections between members of its online audience’ (2016

p.216.). Similarly, Saatchi Art also illustrates this point clearly as the platforms allows any of

its users, appreciators and prospective buyers to leave comments underneath artwork

(Saatchi Art 2020). In their discussion of digital platforms interactivity, Arora and Vermeylen

point out that ‘Interaction becomes particularly relevant in the consideration of certain

primary market models as it allows clients to make direct connections with artists’ (2013

p.324). This form of direct communication reduces anxieties and enhances the feeling that

the art market is open and accessible. Hope and Ryan’s text titled, Digital Arts: An

Introduction to New Media, provides a methodical examination of the effects of social

engagement brought about by digital interfaces (2014). Together, they propose that

‘Improved participation in the arts counterbalances the historical trend in which

involvement in the arts was primarily the domain of middle and upper classes’ (2014 p.12).

Hope and Ryan’s proposal suggests that this progress has enhanced the process of

democratisation, however the validity of their argument will be tested.

Increased accessibility is arguably the most frequently referred to way in which digital

marketplace platforms have attempted to democratise the art market in recent years.

Achieved by breaking down barriers of entry into the art market, the proliferation of digital

marketplace platforms has meant that (theoretically) anyone with access to digital

technology is able to consume artwork, whether that is absorbing visual or historical

information, or purchasing works. Accessibility is built into the nature of these sites. Unlike

the traditional, physical gallery which is ‘directed at making works of art, look expensive,

difficult, and exclusive’ (Velthius 2005 p.33), digital marketplace platforms are directed at

making the art market feel accessible and inclusive. As author and lecturer, Ronit Milano

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consolidates when he describes digital platforms as being open and accessible due to the

fact they present ‘almost no barriers’ for entering visitors (2019 p.12).

There are two main barriers of entry which are arguably removed by the digitalisation of the

art market. The first, and most frequently thought of in connection with the art market is

one of class. A barrier which, as previously mentioned, has long been perceived as being

deeply ingrained within the social and cultural structure of the traditional art market. The

class barrier, in short refers to the discomfort and intimidation linked with the physical art

world, for example entering a gallery space. By placing artwork online via digital

marketplace platforms, it no longer becomes possible for the physical barrier to exist. For as

Adam states, digital platforms allow those who ‘would be hesitant about entering an art

gallery to browse and educate themselves before buying, from the comfort of their homes.’

(2014 p.122). Removing any face-to-face physical encounters. This is reinforced in several

art market reports which state that the removal of the class barrier is often listed as a

reason for entering the art market through digital sources. In the Hiscox Online Art Trade

Report from 2014 for example, 39% of those who were surveyed stated that they were of

the belief that ‘buying from an online art sales platform is less intimidating than buying from

a physical gallery’ (2014 p.13). A more recent report collated by Artsy themselves, titled The

Online Art Collector Report also produced similar findings, listing ‘the ability to avoid the

intimidation of the art world.’(Forbes 2019 p.6) as one of their clients’ key motivations to

purchase through digital channels. Together, the reports attest that while the removal of

the class barrier first attracted audiences during the ‘boom’ of digital platforms, it still

continues to be a source of attraction in the current market. By reducing the restrictions

associated with entering the art market, digital platforms have meant that a greater volume

of different class members feel artwork is attainable. This is confirmed by Dempster who has

reported that ‘The art world’s client base has also become more diverse’ (2014 p5).

The second barrier of entry arguably removed by digital marketplace platforms is one of

geographical constraints. Although, a more physical restriction than the previous,

geographical boundaries have also affected the art market since its inception. Doing so by

placing restrictions on those who do not have access to galleries, museums and institutions,

as well as those living in areas undeveloped or unserved by the art market. However, the

recent development of the online market has been crucial in ensuring that geographical

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location no longer provides a barrier of access for clients and potential buyers. For as

Sidorova acknowledges, digital marketplace platforms exist ‘in the virtual cyberspace

beyond national borders and continental divides’ (2019 p.2). In the case of the marketplace

platform this has allowed clients to access global art markets at a lower cost. Creating one

point in which an accumulation of artwork from artists and galleries across the globe can be

accessed. The online markets global base of buyers is further demonstrated within an

interview conducted with Artsy which revealed that their buyers and sellers are connected

across 190 countries with an ‘average transaction distance of 3,000 miles’ (2020).

In a similar manner to that of class barriers, the removal of geographical barriers can be

listed as a key motivation for purchasing online. As observed in the recent edition of The Art

Market Report, buyers are at an advantage because of the ‘broader range of offerings’ (2020

p.255). Mukti Khaire discusses the breaking of geographical boundaries in his chapter, ‘Art

Without Borders, Online Firms and the Global Art Market’. Khaire highlights the intentions

of digital platforms to ‘transform the art market on both the demand and supply side’ (2015

p.103). On the one hand it allows buyers from across the world to purchase artworks

despite their physical location. On the other hand, it allows for artists situated all over the

globe to display and sell artwork on primary-market platforms. Both of which have a

globalising effect on not only the online market, but the wider contemporary art market also

(Sidorova 2019 p.2). According to Marisa Enhuber, this newfound global availability in the

market is, ‘often equated to a democratisation’ (2015 p.122). So far, Enhuber’s statement

for democratisation seems to ring true as an increased global buying base is certainly

evident. However, arguments later on in the course of this discussion may suggest that

Enhuber’s expectant position isn’t entirely accurate.

Reducing the previously mentioned barriers of access (class and geographical) allows digital

marketplace platforms to operate in a highly democratic manner. Rather than being tailored

to a particular niche audience (like many of their offline counterparts), digital platforms of

this nature instead intend to widen the net of the art market by targeting a broader

audience. For example, Artsy acknowledges their ‘audience is much broader than people

who walk into any one gallery’ (2020).Though discussing the barriers to heritage, rather

than artwork, Taylor and Gibson (2017) comment on the ability of the internet to reach

large quantities of people. Their discussion signifies that it is this characteristic of digitisation

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in particular which has allowed democracy to receive so much attention in this context

(2017 p.409). Equally, this concept also applies to artworks displayed on digital marketplace

platforms, as John Zarobell echoes, ‘sites such as these represent art by and for the masses

‘(2017 p.214). Marketplace platform, Saatchi Art typifies this model’s wider audience,

attracting a significant 1.6 million monthly visitors to their site (Saatchi Art 2020).

The encompassing nature of such sites has meant that digital marketplace platforms also

have an increasing tendency to attract new audiences to the art market. This has been a by-

product of the digital marketplace platform in particular since their inception. Several

scholars including Fernandes and Afonso (2020), McAndrew (2016) and Adams (2014), as

well as various art market reports have acknowledged the importance of digital platforms in

reference to their ability to encourage new buyers. For example, the 2015 edition of the

Hiscox Online Art Trade Report noted that digital marketplace platforms are ‘proving

particularly popular with new art buyers’ (2015 p.5). In agreement Adam (2014), states that

the digitalisation of the art market has allowed companies to ‘reach manifold new buyers’

(2014 p.121). According to Artsy’s Online Art Collector Report, new audiences entering the

art market are primarily comprised of younger generations, more specifically those under

‘35’ (2019 p.21). The younger demographic of online art buyers is further confirmed by

ModernArtyBuyer who describes a noticeably ‘younger or more tech-savvy audience’

(2020).The online markets ability to attract new buyers of a younger age is proven by Hiscox,

who state that ‘Among millennials, 23% said they had never bought an artwork in a physical

space prior to buying art online’ (2019 p.2).

Furthermore, it is not solely through online transactions that digital marketplace platforms

have encouraged new buyers within the art market. The democratising effects of such sites

can also be seen within the wider contemporary art market. As demonstrated by Fernandes

and Afonso (2020) in their recent financial study of online art market sales. In which, they

recognise that online channels, such as marketplace platforms have been, and will continue

to be, integral in encouraging new buyers to the offline market (2020 p.3). For many

customers discover artworks through online channels and then make the decision to view

the work in person through a traditionally gallery format. Interestingly, Fernandes and

Afonso note this to be of particular importance in relation to those offline premises

‘operating in the lower and middle tiers’ (2020 p.3). In addition, as McAndrew (2016) points

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out, this trend can also be translated onto the more general consumption of artwork.

Where many museums and institutions are progressively seeking to attract ‘the broader

public audience’ rather than purely ‘art world cognoscenti’ (McAndrew 2016 p.164). This is

further exemplified in the continuing trend of the blockbuster exhibition. A format for

institutions which utilises digital channels, such as the traditional website and social media

platforms (e.g. Facebook and Instagram) for marketing purposes, in order to appeal to the

masses. Broadening their typical visitor range, the crowds include multiple members of the

public who previously may not have entered an arts institution. Therefore, integrating the

potentially democratised digital space with the physical traditional space.

The dissemination of information by way of digital platforms is another key aspect which has

helped to further democratise the art market. As increasing transparency combined with

access to information, is believed to benefit the process of decentralising power within the

art market. For an increased understanding and flow of art market information helps to

break down knowledge barriers. Digital marketplace platforms have the potential to

disseminate information of two forms, information regarding the artwork itself and

information regarding the sale of artworks. Concerning the artwork itself, digital

marketplace platforms have been undeniably beneficial in developing access to, as

Dempster (2014 p.5) claims an ‘unprecedented amount of information’. In an interview with

online gallery, ModernArtBuyer reveals this function of marketplace platform to be

imperative, stating that ‘In the long term the online art market will be essential for research’

(2020). Many sites, such as Artsy, ArtPrice and Artnet act as aggregators of art information,

playing host to a substantial amount of art related data. Unlike a traditional physical gallery,

the information provided by marketplace platforms is presented alongside the artwork and

is therefore immediately accessible. As standard, the information offered will include key

notes about the condition of the work, its size, framing and medium. But we are also seeing

an increasing number of sites offer more general art related, contextual information to their

users often in the form of editorial coverage. This may include material such as news,

exhibition reviews and topical or academic discussions, all of which allow the customer to

absorb correlating historical and social information. This is exemplified in the case of Artnet,

who in 2014 established Artnet News, a full-time journalistic site dedicated to art related

news (Artnet 2020). Author and art wealth advisor Alessia Zorloni (2013), attributes the

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openness of Artnet News to the fact that is ‘addressed to a wider audience’ and is ‘therefore

more populist’ (Zorloni 2013 p.44).

Secondly, the rise of digital marketplace platforms has also increased the transparency of

the art market. In other words, it has amplified the availability of information regarding the

price of an artwork, its previous sales, as well as company profits. As Dr Ian Robertson

observes, digital platforms ‘supply the market with excellent and essential sales data.’ (2016

p.215). In effect, this dissemination of such data has resulted in insider knowledge,

historically held between the art markets exclusive members, transitioning to public

information, available for all to access. Both Horowitz (2011) and Dempster (2014) comment

on the effect the online market has had in improving the distribution of market information,

paying equal attention to the improvement of transaction transparency. However,

international art market expert Horowitz (2011) goes on to develop this point further,

describing an improvement in ‘the speed and scope with which these data are presented to

the public.’ (2011 p.211). For the internet (more often than not) permits any buyer

immediate market access, enabling them to search and locate an artwork and its related

data within a matter of seconds, at any given moment of the day. This gives the viewer a

sense of easement as they have all the necessary information, they need in order to make

an informed purchase. Additionally, digital marketplace platforms, over digital auctions

provide their customers with price transparency by clearly displaying the cost of a work. For

example, according to Iskin and Salsbury, Artsy ‘frequently includes prices for individual

works’ (2019 p.21). The significance of price transparency was revealed by Hiscox, who state

that ‘87% of respondents’ disclosed visible prices as an important factor when purchasing

art (2019 p.15). This newfound price transparency brings instant benefits to clients as it

allows them to determine, without time restraints or gallery pressure, whether a work of art

is within their budget or not.

Together, the immediate availability of both forms of information which has been provided

by digital marketplace platforms has been hugely advantageous for the art market. Enabling

a greater proportion of the population to access and understand art market information,

they have to some extent demystified the market. Outlining the democratic effects of

disseminating both forms of market information, Zorloni places a particular emphasis on the

resulting ‘increase in public awareness’ and ‘appreciation of art’ (2013 p.44). While Zorloni is

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to some extent correct in her analysis, the level to which market information has truly

become equal and accessible due to digitalisation will be critiqued at a later stage.

Importantly, an increase in democracy within the art market is also implied through the

change in volume of lower value sales. While there is some evidence of an increasing price

paid for contemporary artworks online (McAndrew 2020, Forbes 2019), today it is generally

considered that the majority of works sold through online channels, particularly in the case

of marketplace sites, are of a lower value than those sold offline (Zarobell 2017, McAndrew

2016, Milano 2019). As the latest Art Market Report (2020) demonstrated, when it stated

that currently online ‘price levels, for the most part, continue to be predominantly lower

than offline’ (2020 p.244). This is confirmed by Hiscox’s Online Art Trade Report, which

states that a majority, ‘78% of art buyers listed $5000 or below’ as the average price they

had paid for a piece of art (2019 p.14). The lower price point of artworks sold online is

epitomised in marketplace platforms who, from a business perspective generally aim for

low-value, high-volume sales. The intention to target lower-budgeted clients is further

exemplified by an examination of both Artsy’s and Saatchi Art’s sites, which reveals that

they both promote a ‘Browse art by price’ function (Artsy 2020, Saatchi Art 2020). This

allows the viewers to filter artworks depending on price, in the case of Saatchi Art price

brackets start at just £500 (Saatchi Art). Digital marketplace platforms are not the only way

in which the online market has lowered the price to enter the traditional market, other

examples of a lower price point online include, fractional art ownership platforms (Hiscox

2019 p.27). For example, Hiscox lists Artpolie as a new platform which ‘allows the average

person to invest as little as $50 towards works by Pablo Picasso and similar artists (Hiscox

2019 p.5).

Such a substantial increase in the number of sales at a lower value, due to digital platforms,

has amounted to significant growth in the lower end of the art market (Hiscox 2019 p.14).

The resulting widening of the market through this format, has allowed for a greater variety

of the population to gain access to artworks. Though it would be wrong to assume that

those purchasing lower value works are all of a lower socioeconomic status, it does signify

that price range of the online market offers greater accessibility. Milano identifies how the

online market has created significant shifts in this sense, attributing the cause to

‘exponentially increasing the number of low-cost artworks that suit the budget of the lower

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classes.’ (2019 p.16). Although Milano’s text largely refers to online auctions rather than

marketplace platforms, the sentiment of which this argument is based remains the same.

Marketplace platforms accommodate the entry of those who do not wish to, or simply

cannot afford to spend extortionate amounts of money on a singular artwork. Because of

this, digital marketplace platforms have begun to breakdown the art markets elite

connotations with high prices and exclusivity.

This chapter has attempted to provide a summary of the democratising features of the

digital marketplace platform. In view of all that has been discussed so far, one may come to

the conclusion that digital marketplace platforms have begun to break down the barriers

associated with the traditional art market. As ModernArtBuyer states ‘the openness that

digital platforms provide has to be a positive step’ (2020). The chapter that follows moves

on to question the validity of this argument by critically analysing the digital marketplace

platform and the online market which it sits within.

Chapter Three: The Hierarchical Structure Prevails

The perceived democratisation of the art market, as discussed thus far, is arguably an

illusion. Several lines of evidence actually suggest that digital marketplace platforms have

not had a democratising effect on the art market. Digital technologies have created a

façade, a false presentation of the art market as a place which is democratising and

becoming more inclusive. As Franz Schultheis et al. point out, ‘the frequently postulated

unlimited, so called flat and cosmopolitan art world quickly turns out, however, to be an

illusion.’ (2016 p.22). This view is supported by Fernandes and Afonso (2020 p.1) who state

that technology creates a false ‘illusion that the art markets are democratic and that the

masses are a part of it’. This false impression is exemplified in digital marketplace platforms

such as Saatchi Art and Artsy, who attempt to target the lower-budget, lower-class clients,

offering them a sense of social worthiness and actively encouraging ‘a sense of participation

in the game’ (Milano 2019 p.12).The extent to which large-scale websites like Saatchi Art

promote a problematic and false sense of democratisation will be discussed at a later stage

in this chapter.

17

A sizeable part of this predominantly false perception can be attributed to the industry’s

various art market reports which present flawed, and arguably idealised claims for the

online art market. Although online information through these accounts appears bona fide,

there are a number of caveats which concern their validity. In the first instance, it should be

noted that, as Miegroet et al. state ‘reports are dependent on results sourced from private

consulting firms.’ (2019 p.13). Art-business reporter Tim Schneider discusses the chief

issues associated with market reports in his article titled, ‘Why Online Art Market Surveys

Are Doing It Wrong’ (2017). Schneider identifies two significant issues; results are obtained

from a ‘kiddie-sized pool of sources’ and the report also surveys other items, referred to as

‘other collectables’ (2017). Although published in 2017, the issues Schneider outlines remain

relevant today as demonstrated in the most recent edition of the Hiscox Online Art Trade

Report (2019). For example, the ‘methodologies’ section states that the reports ‘findings are

based on responses from 706 buyers’ (2019 p.28). This very small sample selection is made

worse by the fact that each of the so called ‘anonymous’ buyers are solely sourced through

Hiscox’s and ArtTactic’s own ‘contact mailing list’ (2019 p.28). Furthermore, Hiscox’s most

recent report also highlights the lack of focus on contemporary art buying habits, disclosing

that a substantial ‘40%’ refers to other collectible items, including ‘furniture, decorative art,

antiquities’ (2019 p.28). While these objects are not too different from fine art, it does raise

an issue ‘for those of us solely concerned with quantifying the art industry’, as in the case of

this investigation (Schneider 2017). The combination of two different forms of data means

that it no longer becomes possible to determine which statistics, and by how much, refer to

contemporary artworks. Ultimately, art market reports are far from comprehensive and

therefore do not portray a clear picture of the current state and implications of the online

art market.

In spite of the previously discussed digital efforts in chapter two, the art market’s

hierarchical structure has largely remained the same (Sidorva 2019, Bishop 2012, Velthuis

2012, McAndrew 2016, Waelder 2013). In short, digital marketplace platforms and the

online market have arguably had little effect on the wider contemporary art market. As

Waelder states: ‘the traditional art market, remains untouched.’ (2013 p.54). Similarly,

McAndrew also comments on the lack of change due to the online market describing how

‘there has not been any significant signs of disruption, in the sense of a radical overturning

18

of the incumbent offline art market ‘(2016 p.163). Sociologist Olav Velthuis similarly

presents an account of the art market in which its structure has largely remained the same,

commenting on the art markets ability, ‘underneath a changing surface’ to remain in ‘stasis’

(2012 p.46). The persistence of the exclusive structure of the traditional offline art market is

evident in the fact that ‘the majority of art market operations still take place offline’

(Sidorova 2019 p.1). For as The Art Market Report states, currently the online art market

only ‘accounts for 9% of sales in the art market by value’ (2020 p.242). In the same vein, the

art market has not seen the considerable democratisation that was first promised by digital

marketplace platforms upon their arrival. Although, as mentioned, there has been a shift

towards democratisation, the art market is still a long way from being fundamentally

changed in this respect. As a large proportion of the art market continues to operate under

what Schultheis et al. refer to as a ‘strong hierarchical structure’ (2016 p.22), which adheres

to traditional terms of social exclusivity and insider knowledge.

Most notably, digital marketplace platforms have had little influence on the top end of the

contemporary art market. There continues to be a dislocated and elite high-end market

which remains untouched. As art consultant Mummery states ‘the psychology of collecting

among serious buyers in the top end of the market has not changed’ (2020). Despite

courageous efforts, significant value within the art market continues to be produced at the

top end of the traditional offline market, more specifically within dominant auction houses,

such as Sotheby’s and Christie’s (McAndrew 2016 p.164). In typical and customary form, big

name dealers representing renowned artists or emerging talent, have and will likely

continue to, sell within relatively small and exclusive closed circles. It is these close cliques

of art market insiders which ensure that high prices are maintained and that the top end of

the art market stays unaffected. Furthermore, according to McAndrew there is little

indication of ‘any major shift of higher-end segments to digital channels’ (2020 p.285). The

view of McAndrew is supported by Mummery, and ModernArtBuyer who state that they

cannot see the top end changing in the near future (2020). In fact, it could be argued that

the elitism of the top end of the art market is only increasing. Dempster (2014) draws our

attention to this issue in relation to the art markets rising price points, stating that ‘ever-

escalating prices and the economic power of those who can pay the winning bid have made

19

the art world more exclusive’ (2014 p.5). Dempster’s view is supported by Artprice’s Global

Art Market Report which states that there has been a ‘5% increase in art prices’ (2019 p.2).

The internet is frequently perceived to be inherently democratic, offering information to its

users equally. Up until this point in the investigation the internet, which plays host to the

digital platform has been portrayed in this manner, referred to frequently as a positive

source for access, communication and transparency. However, it could be argued that the

expectations associated with the transparency and equality of the internet are much greater

than the reality. Rather than acting as a base for democratisation, as originally intended, the

Internet now runs the risk of disrupting the newfound neutrality and accessibility. There is

extensive evidence which problematises the so called ‘digital democracy’ which has been

discussed thus far in relation to the internet. Recent literature has begun to illustrate that

the Internet, is in fact, not actually the democratised space it was once thought to be

(Enhuber 2015, Taylor; Gibson 2017, Hopkins 2019). For example, Enhuber observes that:

‘critics have already gauged the notion fallacious that the Internet itself is free and all

information on the Web is neutral’ (2015 p.126). Instead the Internet, over the years, has to

some extent strengthened the exclusive nature of the art market. Unregulated, the internet

has arguably encouraged hierarchies, breeding issues of inequality, power and

centralisation.

Although as mentioned in chapter two, there has been a shift towards transparency within

the wider online market, it should be noted that this is not the case across the board. The

internet has not provided complete informational transparency, and in the case of the art

market information continues to be asymmetrical. The idea that the internet plays host to

total transparency is questioned in online art journal Happening’s first art market report

produced in connection with Axa Art (Happening 2016). The report, titled The Art World:

Paradise for big Data, proposes that ‘there is hardly a single place on the internet where

true, perfect information can be accessed.’ (2016 p.10). Although relatively unestablished in

comparison to other previously cited art market reports, Paradise for Big Data provides

some useful insights into the perspectives of art market experts. For example, the report

includes art market specialist Adam’s response to the question, ‘what would be the positive

and negative effects of having more transparent information in the art market?’ as, ‘I don’t

20

believe in it personally’ (2016 p.25). Interestingly, Adams reluctant response raises

questions regarding the possibility of the art market reaching total transparency.

More specifically, digital marketplace platforms do not offer total information transparency.

In a very recent article concerning the informational asymmetry within the art market, Hans

J. Van Miegroet et al. (2019) critically analyses the digital marketplace platform, proposing

that they display a lack of data when compared with that of online auction houses. Noting

how ‘auction houses such as Sotheby’s and Christie’s have now fully embraced making their

sales results publicly available’ (2019 p.10). A statement which cannot be made for other

online market models such as Artsy, who refuse to publish their profits online (Milano

2019). Furthermore, despite improving on the offline markets price transparency, the online

market is far from absolute price transparency (McAndrew 2020 p.286). Adam summarises

the lack of transparency in the online art market when she states that, selling art through

digital platforms ‘is leading to less, not greater transparency in the market, running counter

to the freer access to price data that the internet was supposed to foster’ (2014 p.126). As

for the information which does get published online by digital platforms, it could be argued

that this is protected. Much like the barriers previously discussed in relation to the offline

physical market, digital marketplace platforms also contain barriers to entry, shielding

information. The barriers to such online art information are considered by Winesmith and

Anderson in their recently published, timely text titled, The Digital Future of Museums:

Conversations and Provocations (2020). Their insightful discussion proposes that there are

both ‘explicit and implicit barriers’ to accessing information online, of which they list,

‘orientation and navigation of online collections, their use of language and their

categorisation of objects and limited rich information’ (2020 p.13).

One of the Internet’s most substantial issues is its top down structure, where large

initiatives (in this case sites such as Artsy and Amazon Art) have gained significant control of

the wider market. Joao Enxuto and Erica Love’s collaborative work on the economic and

political impacts of new technology recognises this issue, stating that whilst the internet

brings advances, ‘ultimately the tendency has been toward the creation of monopolies’

(2014 p.43). The work of Enxuto and Love can be applied to digital marketplace platforms

within the online art market. For while digital marketplace platforms have on the surface

proposed a democratising business model, they have, albeit perhaps quietly, intensified the

21

hierarchical systems within the art market (Samdanis 2016, Zarobell 2017, Milano 2019).

Zarobell draws our attention to the issues of ‘online art portals’ in his social and economic

critique of ‘The New Platform’, stating that they ‘reinforce, rather than undermine

established social and market structures in the art world’ (2017 p.214). The reinforcement

Zarobell refers to can be seen in a select few, single, all powerful platforms which control

the online market space through their promotion of hegemonic ideologies. Platforms of this

nature include previously mentioned market leaders such as, Saatchi Art, Artsy and the wall

art, poster company Art.com. The powerful position of these sites is demonstrated in The

Art Market Report (2020 p.280), which confirms that the highest visitor traffic in terms of

marketplace platforms has ‘for the last three years consistently been Saatchiart.com and

Art.com’. For while digital marketplace platforms have encouraged access to both artwork

and information it is not without control; As Milano states ‘online information is accessible

to all yet is filtered and shaped’ by substantial art market companies (2019 p.12).

This hegemonic quality is certainly true in the case of mega-player, digital marketplace,

Artsy. Introduced to the public in 2012, Artsy’s innovative business model acts as an

intermediary, connecting its clients with over ‘600,000’ works of art, from a variety of

galleries and institutions (Artsy 2020). While upon initial inspection the company may seem

to be an exemplar case for democratisation, Artsy has paradoxically strengthened the

socially stratified structure of the art market. Commenting on the issues of digital platforms,

Marios Samdanis refers to Artsy as an example of an ‘online venture that seeks to dominate

the online art market.’ (2016 p.168). Artsy’s prominent position comes down to ‘large scale

investments which concentrate activities and power in single platforms’ (2016 p.168). For

example, in 2017 Artsy announced in an official press release that the company had

generated $50 million in new venture capital (Newhall 2017). The new wealth of the

company not only increased its influence in terms of finance, but also status.

The fear of a singular platform such as Artsy, becoming all-consuming and dominating the

online market is a reality for many smaller e-commerce companies. In fact, the Hiscox

Online Art Trade Report states that a substantial ‘Forty-one percent of the online platforms

believe the online art market will converge towards one or a few global platforms’ (2019

p.6). Online gallery ModernArtBuyer, for example, admits to feelings such concerns,

describing a need ‘to compete, as many of these larger platforms have huge financial

22

investment and teams of people working for them, which we can’t match so we are a little

dwarfed.’(2020). Furthermore, smaller galleries who choose to portray themselves online

through intermediate platforms are increasingly unsatisfied by the substantial subscription

fees which are required. Here, it should also be observed that Artnet’s status as a

marketplace platform is not too dissimilar, as their fees are also considered by mid-level

galleries to be ‘unaffordable to all but blue-chip clients’ (Johnson 2020). The issue of

dominant platforms has only recently been further exemplified by Artsy. According to art

critic and curator Paddy Johnson (2020), March of 2020 saw Artsy make the decision to

increase their membership prices by a substantial ‘40%’ (per month), taking general fees

‘from $375 to $650’. The decision, in light of the recent COVID-19 crisis and subsequent

limited funds, will undoubtedly have a negative impact on smaller galleries. Moreover, by

encouraging and deepening interdependencies between smaller companies and market

leaders, Artsy and other platforms of this nature are removing the possibility of freedom

from the traditional art market.

In addition, digital marketplace platforms may also be critiqued for their control over taste.

Historian and Curator, Owen Hopkins discusses the power larger companies hold online in

his highly sceptical article titled, ‘The internet is broken, and technology alone won’t be

enough to fix it’ (2019). Hopkins strongly proposes that ‘when you access a big platform

online with no entrance fee, it's because you are the product’ (2019). Here, Hopkins is

referring to the fact that digital platforms consistently analyse consumer habits, collecting

and storing data from their users, data which ultimately ends up dictating the products they

view online. Principally digital platforms have utilised this highly intelligent technology,

known as recommendation algorithms, to improve their product discovery, predicting other

works of art which the customer might also like. However, a more critical analysis indicates

that the recommendation technology also holds the ability to promote and establish

popular taste. By displaying works of similar visual appearance platforms are encouraging

their clients to purchase within the same realms, and in turn their artists to churn out

homogenous works. Abbing equates the growth of this technology with aggrandizing ‘the

growing body of mass-produced artwork’ (2002 p.307). Similarly, Mummery stresses the

concern that the continual process used by digital marketplace platforms ‘encourages more

volumes of undifferentiated product’ (2020). Zarobell discusses this concern in relation to

23

Artsy, stating that when one ‘searches for works of art on Artsy, one finds, as on google,

that one’s taste is reinforced and consolidated rather than extended to unknown domains’

(2017 p.214). The reinforcement that Zarobell notes is not just in the case of Artsy, but

many other sizable platforms who employ this strategy within their website. For example,

Saatchi Art who use the phrase ‘see more like this’ (Saatchi Art 2020). Those companies who

repeatedly reinforce established tastes are carefully placing artworks into what Velthuis

(2005 p.41) refers to as ‘the art world’s taste-making machinery’. The consolidation of taste

is perhaps true of digital marketplace platforms in particular as they have the ability to

control the tastes of new audiences entering the art market.

The growth and democratisation capabilities of digital marketplace platforms have arguably

been limited by the online markets inability to scale up due to offline desires. While digital

marketplace platforms have their advantages, many consumers continue to purchase in

traditional gallery spaces due to needs which cannot be met online. The traditional offline

market, in which customers can interact with experts and view tactile works, remains to be

the preferred destination to acquire art. The inability to view an artwork in person before

purchasing is therefore one of the most significant issues facing digital marketplace

platforms. Although there have been considerable strides in new technology, for example

the interview with Artsy reveals an ‘AR feature that allows collectors to place works they’re

thinking about directly on their wall’ (2020) the need to view artwork in person still persists.

For many collectors, this comes down to the need for authenticity, physical review and

quality inspection, however the pleasure of viewing the artwork is also a consideration.

Many people are of the belief that viewing artwork through digital channels, such as

marketplace platforms cannot replace experiencing the artwork in person. This is recognised

by online gallery, ModernArtBuyer who acknowledges that ‘art is an experience so people

will always want the opportunity to see works in person’ (2020). It is not just the physical

presence of artwork which makes the traditional market the preferred choice for so many,

physical interaction also plays a large role. The contact between and personal service of

those within the art market is a crucial part of the enjoyment and an integral part of

business. The experience that collectors receive in a physical auction house very much suits

those at the top end of the market. Arora and Vermeylen’s investigation into technology

acknowledges this, noting that, ‘Many art consumers derive pleasure from personal

24

contacts with artists and dealers in a gallery’ (2013 p.324). This is further exemplified by

Mummery, who describes the ‘one to one repour with individual collectors’ as a critical part

of the industry. However, it should be noted that the importance of personal contact that

Mummery refers to chiefly applies to the higher tiers of the art market, more specifically in

the case of serious collectors.

The extent to which digital marketplace platforms have had a democratising effect on the

art market may have also been previously limited by the general cooling of the wider online

art market. Placing the recent growth in online channels, due to COVID-19, to one side, it

should be noted that the online market was previously in a state of cooling. Prior to 2020,

the online market had witnessed a trend for the slowing down of growth, with various

indications that the online market had begun to deteriorate. Both of the market reports

which acknowledge the online market, Hiscox Online Art Trade Report and The Art Market

Report, had previously suggested a deterioration of its state. The Art Market Report, for

example, outlines a decline in the growth of sales through online channels after consistent

progress for more than five years (2020 p.244). According to Hiscox Online Art Trade

Report, the growth was down 2.2 % year on year, for the figures show ‘an increase of 9.8%

from last year (2018), down from the 12% growth rate experienced in 2017 (2019 p.3).

Combined, the two reports illustrate that sales processed through online channels were no

longer increasing, and the development of the online sector was beginning to level out. The

lack of growth in the online market could also be seen in the reduced number of new digital

platforms (marketplace as well as other models) emerging over recent years. As McAndrew

observes: ‘the proliferation of new companies may be slowing or has stopped’ (2016 p.164).

Those new arrivals which have appeared, seem to offer little competition as the companies

which were originally formed during the initial boom of the online market in the early

2010’s, continue to take a leading position.

A more contextual view, observing the status of other markets, reveals that the online

market had always been slow in growth, consistently trailing behind general e-commerce

retail (Hiscox 2019). This is reiterated by McAndrew, when she states that ‘the art market

has lagged behind other industries in terms of its online share by value (2020 p.244).

Moreover, the wider online art market has arguably not seen the scale of growth which was

expected of it during its inception. In agreement, ModernArtBuyer’s Lloyd-Smith describes

25

how she believes the online market has not grown to the extent first thought when it

initially took off. Lloyd Smith attributes this lack of growth to ‘a slowing down while initial

entrants realise this isn’t working for them’ and ‘larger galleries deciding to focus on their

physical spaces’ (2020).

To conclude, this chapter began by introducing the false sense of democracy brought about

by the digital marketplace platform. It went on to reveal that the traditional structure of the

original art market continues to remain intact, referring specifically to the top end of the

market. Crucially, this chapter proposed that the digital marketplace platform holds many of

the non-democratic features of the physical offline gallery.

Future of the Online Art Market:

The future of the online art market and digital marketplace platforms remains an interesting

subject for debate. Although, as Miegroet et al. note, it is ‘difficult to predict the future of

online art markets’ (2019 p.131), particularly during the current COVID-19 crisis. It should be

taken into account that the scope of this study is limited by the absence of academic

information on the full effects of COVID-19. The substantial consequences of COVID-19 on

the online art market are yet to be seen but will undoubtedly be uncovered in future

studies. There is of course a possibility that the effects of COVID-19, up until this point, are a

temporary reaction to the current circumstances and will not result in a permanent shift

online. However, from initial observations I suspect that the online market and within that,

digital marketplace platforms will witness systematic change and considerable growth in the

next period. Firstly, because in spite of a previous slowing in growth of the online market,

many platforms had stated they expected ‘more consolidation’ of the market in the coming

months (Hiscox 2019 p.6). This projected trend is further solidified when the art market is

compared to that of other economic industries which have transitioned online, such as

26

general retail. Finally, the recent events concerning COVID-19 will almost certainly benefit

the online art markets development and encourage consolidation. Galleries will likely want

to display their artworks online and will increasingly understand the financial benefits of

doing so.

However, reactions so far indicate that that if there is a significant and long-lasting shift

towards an online art market, existing large-scale platforms will hold substantial control. The

evidence of increased control in major marketplace platforms can clearly be seen in Artsy’s

‘25% increase in website traffic in the wake of coronavirus business lockdowns’(Johnson

2020).In turn, the transition to an online market is likely to result in a convergence of

market players. Hiscox suggests that the art market is expecting future consolidation, stating

that a sizeable ‘Forty-one percent of the online platforms believe the online art market will

converge towards one or a few global platforms’ (2019 p.6). While the research thus far

suggests a convergence of online marketplace platforms is anticipated, it should be

acknowledged that this will not be within the near future. As acquisition and merger

movement has been noticeably lower within the last year (Hiscox 2019 p.6). While as

demonstrated the potential state of the online market is unknown, its future is certainly

guaranteed.

Conclusion

The main purpose of the current study was to determine the extent to which digital

marketplace platforms have democratised the tiered structure of the contemporary art

market. This text has attempted to bring significance to the study of the online art market,

whilst implementing a critical perspective on its evolving state and subsequent economic,

political and sociological implications. It has outlined and analysed the allegedly

democratising formation of digital marketplace platforms within the online art market. In

doing so, this study has revealed that the notion that digital technology prefigures the

democratisation of the western art market, is highly problematic.

Chapter two has highlighted the somewhat democratising composition of the digital

marketplace platform, identifying some shifts towards the democratisation of the art

market. Through the various forms reviewed (social inclusivity, increased accessibility, wider

audiences, disseminating information and lower value sales), digital marketplace platforms

27

have in some respects widened participants and expanded the opening of the art market.

Importantly, as mentioned by ModernArtBuyer, this study has found that digital

marketplace platforms will play an important role in the dissemination of art market

information. Therefore, proving that marketplace platforms can to some extent foster

democratisation and the issues of the art market can in some, albeit limited, form be

mitigated. However, the evidence presented ultimately suggests that the majority of the

impact of digital marketplace platforms is only being felt within the lower tiers of the art

market, with works of a lower value, further down the market chain.

While acknowledging and approving of the optimistic view of the online market, held by

Sidorova (2019), Adam (2014) and Enhuber (2015), Chapter three has challenged the pre-

conception that digital marketplace platforms are intrinsically democratising. It has revealed

that the perceived democratisation of the art market is to a large extent false and that the

hierarchical structure of the art market is deeply imbedded within art market systems. It has

also implied that the hierarchy rituals and centralised structure of the traditional art market

continue online within digital platforms, as demonstrated in the case of Artsy. Moreover, art

itself as outlined by Abbing (2002) at the beginning of this study, has an augmented status.

As a result of this it is difficult to envisage what the art market would be like without such

exclusivity, for the indissoluble problem around the art market and artwork being a coveted

luxury item is the very thing that simultaneously makes art important and good.

While on the one hand the little change in the structure of the art market proves that the

market is not a democratised space in its current state, it also indicates that total democracy

will not be viable in the future. The primary focus on lower value works and the inability to

achieve higher prices suggests that digital marketplace platforms will struggle to ever

encroach on the top end of the art market. The effects of digital marketplace platforms have

only widened the lower end of the art market; therefore, the top end continues to function

in an elitist manner. As a result of this there will always be a section of the art market which

is enclosed and intimidating. In fact, as Dempster (2014) has suggested, it could be argued

that the exclusive nature of the traditional art market is only intensifying further.

Similarly, it is also difficult to predict the extent to which the online market will

fundamentally alter the art market as a whole. Although I suspect that the potential of

digital marketplace platforms to change the structure of the art market is limited. While this

28

study has proven that there is space for the online market and digital marketplace platforms

to consolidate, this may not equate in the democratisation of the market.

As a result of the research that this study presents it can be assumed that the contemporary

art market has not been democratised by digital marketplace platforms, at least not to the

significant extent which was originally intended. Instead, the hierarchical, power-based

structure of the art market has been simultaneously exaggerated and decentralised. The

digitalisation of the art market through digital marketplace platforms has encouraged

opportunities of democratisation, whilst paradoxically reinforcing the traditional and

established tiered structure of the art market. The introduction of democracy brings highly

incompatible but necessary capacities to the art market.

Word Count:10,305

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Appendix 1

ModernArtBuyer. (2020) Email to Georgina Savery-Smith, 15 April. [edited]

To what extent do you think that the art market has been fundamentally changed by digital art platforms?

New audience: digital platforms have opened up the art world to a new online audience. Most likely a younger or more tech-savvy audience that is comfortable browsing and buying online. I think that this tech-savvy audience not only understands how to buy online but trusts companies who sell online, so they know their data & privacy will be protected and that they will be able to return pieces if needs be. This new audience is also being drawn to some of the larger art fairs, so their initial online interest is leading to physical viewing and exploration too.

New opportunities: galleries, dealers, artists, artist groups, art trails etc all now have a seamless communication between their sales/website and their social media which is very powerful. From the comfort of their own home they can engage with the art world and purchase directly when it might have been a much more considered decision previously. The downside to this is that all competitors are one click away from each other, so the choice is much wider, and galleries/artists have to work

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harder & smarter. This is where projects like online exhibitions, videos & brand collaborations become really valuable.

New artists: more artists have a ‘shop window’ being able to promote their artworks through social media or through the very large online galleries that accept all artists for a fee. This is great for the industry in principle as it keeps momentum and gives both buyers and galleries and opportunity to invest in their work. The downside is that there is no curation – anyone can post up their work and call themselves an artist, so the boundaries of quality can become a little blurred for the untrained eye or new buyers. This is where galleries and dealers need to step in and offer a curated selection, as well as education around what to look for in a great painting, print or photograph.

Open access: Digital platforms offer a less intimidating environment in which to enjoy something that should bring us joy/emotion/dialogue, so visitors find the digital space a good starting point as it’s more open to everyone.

From your perspective, have such digital developments had a democratising effect on the art market?

Yes and no (see below)

Yes: digital developments have enabled access for all – both artists and buyers. Not all of the artists are of the quality you might see in a high-end gallery or to everyone’s taste but the openness that digital platforms provide has to be a positive step.

No: there is still an elite high-end market that remains untouched. Big name dealers, representing world-class artists or exciting emerging talent, still sell to global investors who trust them and their brand. While the lower end is much more open, the top end is still a more exclusive area and I can’t see that changing hugely in the near future.

While the online art market has its advantages, many consumers continue to purchase in traditional offline spaces due to a need for authenticity, physical review and quality inspection. Do you feel a sense of restriction in terms of scaling up due to such offline needs?

I don’t feel any sense of restriction. I also offer viewing opportunities for my clients – private appointments but also exhibitions and art fairs where I get to meet my clients face to face and discuss artists with them. It’s really about building trust between the gallery/dealer and the client. If the client trusts the dealer’s curation and advice, they will be happy to purchase artworks up to a fairly high price bracket without necessarily seeing them in person. Obviously the returns policy also comes into play here!

It’s worth saying that as with all businesses, no one can be everything to everyone so when you set your original business plan (or indeed every time your business

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changes direction) you outline your target audience and set out your offering (for example contemporary young European artists, or modern editioned prints) and then the channel to market should be established accordingly. If you plan to sell editioned prints and think that a young audience is going to buy them then digital platforms will work. If you want to focus on new emerging painters and turn them into globally recognised names then you need a high-end physical space in a desirable location, and you will need to be seen at exclusive art fairs. My own artist curation is reflected in my channels to market and at the moment I’m happy with that.

Do you have any concerns relating to single, larger platforms becoming all-consuming and dominating the online market?

Yes: smaller galleries may struggle to compete as many of these larger platforms have huge financial investment and teams of people working for them, which we can’t match so we are a little dwarfed. Having said that, we can win by being smarter with our comms and events (more collaborations with other similar small businesses for example), offer a more personal service (buyers will always speak directly to the gallery director) and offer a more curated selection of artists. Again, it goes back to the element of trust. Once buyers trust you and your gallery, they will come back time and time again without considering other larger galleries.

Recent reports have suggested a decline in the growth of the online market, is this something you recognise? Firstly, within ModernArtBuyer but also the wider market?

You’re right – it hasn’t grown as much as we all thought when it really took off around 10 years ago. There will naturally be a slowing down while initial entrants realise this isn’t working for them or while larger galleries decide to focus on their physical spaces for example and drop out of the digital market. Personally, I think it’s a slow, long term change so it will grow slowly over time but will sit hand in hand alongside the physical viewing opportunities. Art is an experience so people will always want the opportunity to see works in person, but I think people over time are becoming more open to the idea of buying art online.

How do you think the online art market will develop in the future?

As the younger, more tech-savvy audience moves towards being the majority consumer (i.e. homeowner looking for art or potentially an investment) online buying will become more acceptable. Old school ways will likely make way for simpler digital buying opportunities. As I said above, art is an experience so I think there will always be space for physical art fairs and galleries but in the long term the online art market will be essential for research and browsing, and also well used for buying.

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Appendix 2

Artsy. (2020) Email to Georgina Savery-Smith, 2 April. [edited]

To what extent do you think that the art market has been fundamentally changed by digital art platforms?

Artsy's goal is to connect more people to more works of art. Bringing more people into the art world as collectors helps more artists make a living and helps the galleries and auction houses that represent them. One tangible difference is that Artsy's audience is much broader than people who walk into any one gallery. We connect buyers and sellers across 190 countries and 6 continents, with an average transaction distance of 3,000 miles. It's much easier for most collectors to purchase online instead of making international trips for every acquisition they consider.

The numbers show that the online market is contributing increasingly to the art market—for example, the annual Art Basel and UBS Global Art Market report showed 9% of global sales occurred online. I recommend taking a look at the Online Art Collector Report and this article for more great data on how collectors think about buying online.

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From your perspective, have such digital developments had a democratising effect on the art market?

That's certainly the goal! By making more art, market data, and editorial coverage accessible to a wider audience, we aim to bring more art to more people and give them all the information they need to make a purchase. From our research, about half of new buyers find buying online to be less intimidating than buying from a gallery.

As one of the leading marketplace platforms, how does Artsy compete visually with viewing a physical work of art within a gallery?

The Artsy app has an AR feature that allows collectors to place works they're thinking about directly on their wall. Plus, our gallery partners provide multiple high-resolution images to give collectors the best sense of the work, and our team can help answer any questions.

Recent reports have suggested a decline in the growth of the online market, is this something you recognise? Firstly, within Artsy but also the wider market?

Artsy continues to see robust growth—for example, our registered users grew more than 25% in 2019, and we saw 58% year-over-year growth in the volume of sales conducted through the platform.

What are your predictions about future developments within the online art market?

While we're in uncertain times, we believe that the online market will become more important than ever as COVID-19 restricts travel, postpones fairs, and keeps physical spaces closed. The online market can help keep art moving and keep us connected.

Appendix 3

Mummery, A. (2020) Skype Conversation with Georgina Savery- Smith, 19 May. [edited]

To what extent has the art market been fundamentally changed by digital art platforms?

The psychology of collecting among serious buyers in the top end of the market has not changed. Although art has become more widely distributed.

How will the online market develop in the future considering COVID-19?

Raises questions as to whether there will be a systematic and sustained change, or the market will return to its previous state. The market won’t continue in the same way, there will certainly be a boom in growth of the online art market. But I do not believe the top end of the market will change dramatically as it is reliant on one to one report with individual collectors. This one to one relationship will not change. Platforms are limited by the top end of the market. The art market is about having access to information that very few people have. The online market will never replace gallery viewing, which will likely fall back into favour.

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Individual galleries will need to decide how they want to promote themselves. Big galleries will continue to use online format in bespoke viewing rooms. Online content is important, specific projects for particular mediums, e.g. editorials.

The issue with these digital platforms is that they encourage more volumes of undifferentiated product. The idea that if you like this work you may like other works from that gallery. Quality control clearly makes a difference.

Self-Evaluation Form

Name: Georgina Savery-Smith

1.Summarise your aims for the project.

This project aimed to evaluate digital marketplace platforms, determining the extent to which they have had a democratising effect on the traditional art market. This project also aimed to assess the extent to which the online art market has fundamentally altered the art market and make projections regarding the future of the online market.

2.How confident are you that the final piece achieves these aims and communicates your ideas to others?

While I believe this project made a case for both the democratising and non-democratising nature of the online art market and the digital marketplace platform, it was limited by its ambivalent final position. However, due to the contemporary and live nature of the project the simultaneous and paradoxical conclusion felt necessary.

3.How has the project changed your original understanding?

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While I was aware of the elitist issues which face the art market, when I first approached this project, I had an entirely optimistic view of digital platforms and their potential to democratise the art market. During the process of this project I have gained a more critical perspective of the powers of digital platforms and the Internet as a whole. Overall I have developed a deeper understanding of the complexities and paradoxical nature of the art market.

4.With hindsight, how would you approach the project if starting again?

If I was approaching this project again I would have begun the process of writing at an earlier stage, the enjoyment of researching meant that this was delayed. By doing so, problems I encountered when writing would have been met and handled earlier.

5.What advice would you give second year students about to embark on their projects?

I would advise second year students to begin thinking about their project topics as early as possible. The narrower your project topic the easier the research and planning stages become. Personally, I found planning to be a crucial element of the project in order to stay on track and include all relevant information that I had discovered.

HAD6001-40: Statement of Originality

The ideas and words in this project are my own, except where specific attribution is made to another source.

All sources of information, ideas and quotations are given in conformity with standard academic procedure.

This project represents new writing and research that have not been submitted for assessment by me at any point in the past.

Signed: G. Savery-Smith Date: 04/06/20

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Print name: GEORGINA SAVERY-SMITH

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