Galleries, fairs and auctions at Covid-19
Nov 16, 2021
The online art market continues to grow and is emerging as the most immediate solution to the cancellations of fairs and auctions. We review the most significant cases in this crisis and their development in recent years.
The world economy is being plunged into a scenario of in5-certainty as Covid-19 spreads across five continents. To contain the spread of the virus, museums, art galleries and cultural centres have been closed, and auctions, art fairs and exhibitions have been cancelled or postponed, many of them without dates, bringing the cultural industry to a near standstill. The art market could withstand the new challenges if galleries, auctions and institutions are agile and explore innovative ways to support their artists and serve their clients. Resilience opens up a new landscape in 2020 where art agents are looking for technological solutions to interact, a digital transformation that is gaining urgency.
According to its historical economic data, the art market reflects less volatility in situations of recession or financial crisis. The volume of sales -both in the private market and in public auctions- was 64,100 million dollars in 2019, of which the Spanish market represents 1 %. These global figures represent a total increase of 9 % from 2008 to 2019.
Art Basel Hong Kong was the first major art event to announce its cancellation. It reacted quickly by establishing a digital fair
Online sales in the period from 2013 to 2018 have gone from $1,507 million to $4,636 million. The most purchased technique has been painting, surpassing for the first time the Print, andthe most used social network to follow artists and Buy art is Instagram (certifies the Hiscox Online Art Trade Report 2019). According to a survey of 70 online platforms, the average sale price is $5,000, although around 10% of their transactions are over $250,000. On the other hand, another survey of 660 HNWs (people who invest more than $1,000,000 in different assets) shows that they have purchased works online for $50,000 (65%) and 8% have purchased pieces above $1,000,000 (McAndrew, 2020).
The weight of the fairs
During 2019, galleries and dealers accounted for 56 % of the total sales volume, compared to auctions (44 %). Private sales have increased by two percentage points to the detriment of the secondary market, with galleries gaining more importance. Art fairs are a very important sales channel for both galleries and dealers (between 30 and 47 % in 2019 of the total annual turnover). However, Covid-19 threatens this hegemony.
In early February 2020 Art Basel Hong Kong was the first major art event to announce its cancellation due to the coronavirus. The organisation reacted quickly by setting up a digital fair in March, so that exhibitors could present, free of charge, the works they intended to show at the stands, now through the so-called "Online Viewing Rooms". Throughout the month of February fairs such as ARCOmadrid were held with great public and sales success, however, on 11 March TEFAF, in Maastricht, had to close four days before its closing date after some of the exhibitors tested positive for the coronavirus. The closure was a severe blow to the participants who were counting on this major event for their economic survival. Subsequently came the trickle of cancellations and the postponement to dates beyond the summer: Frieze New York, Art Basel, Art Dubai, or ARCOlisboa, among others.
Some galleries have been able to react with innovative proposals, such as the Spanish Sabrina Amrani with openings via videoconference and digital exhibitions, the British Saatchi, with virtual visits to the artists' studios, or the American David Zwirner who, with their headquarters closed, have migrated to the online format in order to be able to continue exhibiting and selling art. In Spain other galleries are providing content, videos and documentation through their newsletters and websites, such as NF or Heinrich Ehrhardt. There are online platforms that are offering galleries the possibility of virtual exhibitions or sales. Some galleries have also been experimenting with digital marketing either on social networks such as Instagram or with Display advertising on Google.
Joël Andrianomearisoa: 'From Home'.
The virus has also affected auction houses. Postponements in Hong Kong and mainland China began in January, followed by Christie's, Sotheby's and Phillips in New York. On 22 March Sotheby's closed its offices and salesrooms. On 2 April it announced that it was laying off 12% of its staff and reducing the salaries of its remaining employees. However, the major auction houses have a lot of experience in online sales. Sotheby's, for example, recorded an increase of 25 % in 2019.
Meanwhile in China, now recovered, Phillips will hold his Hong Kong auction in June at the JW Marriott Hotel, and some Shanghai galleries, such as Made In, have announced their reopening under strict security measures: face masks during the visit, verification of the QR code proving Shanghai residency and body temperature checks.
The art market reflects, according to its historical economic data, lower volatility in recessionary situations.
The closure of all museums represents a hard blow for the cultural sectors. Art galleries such as El Prado and the Lázaro Galdiano are disseminating educational resources, online catalogues and exhibition videos. In the United States, there have been initiatives such as that of The Getty Trust, which has donated 10 million dollars to support non-profit art associations in Los Angeles. Also noteworthy is the Google Arts & Culture project, which has been compiling virtual tours of museums around the world for many years.
In Spain, the Instituto de Arte Contemporáneo (IAC) has issued a report that reflects the same global trend, cancellation of exhibitions in galleries and museums, a drop in art sales and layoffs. Added to this is the fact that the sector lacks the digitalisation necessary to confront a situation of confinement. It would be a good time for agents to begin to see technology as an ally and not as a competitor to the face-to-face format.
