The global epidemiological situation increasingly makes the art market participants seriously consider its future. Canceled mass events have already hit the industry, but these are most likely just the first signs. The total amount of financial losses will depend on the quarantine duration and post-epidemic enthusiasts of art votaries. Even if the virus has been completely defeated, the chances are still high that new diseases appear. In this context, old forms of work are no longer relevant, with the market gradually moving into the virtual space.
Black swan of the pandemic: who will suffer most?
By estimate, thus year’s revenues in the industry will drop by 60-80%. Mass event organizers will be the ones who primarily suffer financial losses due to the quarantine. Despite some easing of restrictions, it has been decided to cancel this year’s La Biennale Paris. Every year, the exhibition attracts several thousand collectors, art dealers, art experts, and art connoisseurs. Before the introduction of the ban, 85 exhibitors had been registered, but the organizers had to postpone the event. It will be not before September 2021 that the 32nd edition of the exhibition will be open to the public. It should be mentioned that the previous year was also unlucky for La Biennale Paris: only 75 exhibitors compared to 195 at the FIAC contemporary art exhibition. The pandemic is likely to cause additional problems for antique dealers and trigger a further shrinkage of this segment.
The Southeast Asian markets are facing the same difficulties. Hong Kong has completely closed its border with China and imposed restrictions on mass events. In early February 2020, a message from Bernd Stadlweiser – the CEO of the Swiss MCH – was posted on Art Basel Hong Kong website informing that the fair would be canceled. The news was a cruel blow not only for art connoisseurs but for local galleries as well: over the last years, Art Basel Hong Kong has become almost the most important platform for selling paintings. The situation has aggravated the already difficult economic situation the galleries and artists found themselves in due to the recent opposition protests.
Other world-famous participants of the art market have faced the same problems. Christie’s Auction House has canceled the major Evening Auction in New York in May. It is worth reminding that the House and Sotheby’s control 90% of the market, so the cancellation of the scheduled events will hit the whole industry. However, it doesn’t plan to postpone the auction for the next year. Instead, it will resort to other forms of auctions. Not only widely promoted sites, but galleries all over the world are undergoing financial problems. Ban on visiting public places deprives them of income and thus, an opportunity to pay rent and utility charges. Renting large premises under the current conditions is economically unviable. In turn, closed galleries leave not a single chance for young artists to present their works to potential buyers.
The businesses focused on providing related services have suffered losses as well. For example, transport companies that used to deliver art objects have announced a new working schedule. The core staffing was kept performing its duties routinely, with other employees having been sent on vacation with the salary compensated by the state. The companies will stick to this mode of work until this October. Now it is difficult to estimate the total amount of financial losses.
After lifting the restrictions, the purchasing power will drastically drop, which may trigger a considerable market shrinkage. In such conditions, the competition for clients will become even fiercer. And new technologies with be the ones playing the key role in this competition.
Experts views on the art market problems
According to Mark Glimcher, the director of Pace Gallery, the situation with the Dutch Tefaf Maastricht fair has revolutionized the art connoisseurs’ minds. After 25 Covid-19 cases were discovered among the exhibitors and visitors of the event held early in March, it became clear that the virus can spread within upscale exhibition halls as well. The closed fair served as a signal of shifting to unfavorable working conditions on the entire European market.
Adam Fleeds – the Director of Arta transportation company felt pessimistic about forecasted income. The closure of the EU air borders has put an end to order transportation, and the governmental help is not enough to keep the company safe and sound until the quarantine is over. Against the falling purchasing power, one should expect the market to shrink.
Some legal conflicts may also arise due to the pandemic. According to Rudy Capildeo – a partner at Charles Russell Speechlys law office – in case of exhibition adjournment, the exhibitors won’t be able to return the advance payment they received under the contract. It may become a real problem for small galleries that don’t have any standby funds.
Evan Bird – an employee of US Trust – is optimistic about the future. He believes that auction houses will be able to review their marketing strategy under new conditions and optimize the costs of maintaining exhibition halls. According to the expert, digital fairs could become a new industry standard.
Would the art market be able to go online completely?
Industry participants from many countries have already turned to the authorities asking to review the restrictions, and the initiative has gained support. For example, British Prime Minister Boris Johnson has presented a 60-page Our Recovery Plan. It allows employees of galleries and museums to return to their duties if they find it impossible to perform their work remotely. However, new approaches to the activity organization are under development that takes the existing and potential restrictions into account.
Art Basel HK decided to provide art dealers and galleries with an opportunity to present their works on an online platform. The viewing rooms were open from March 20 to 25. VIP guests got access to the platform from March 18 to 20. This innovation saved Art Basel HK, galleries, and artists in Hong Kong. Christie’s owners have made a similar decision. Instead of a series of fairs in several cities, they intend to hold online auctions as part of ONE: A Global Sale of the 20th Century that will be broadcast from Hong Kong, Paris, London, and New York. Sessions will be conducted by different auctioneers. Please note that the fairs will also be available in an offline format while keeping with all restrictions.
Attempts to unite isolated players into new communities became a kind of response to the crisis. Gallery owners and artists in Hong Kong were the first to take this initiative. They created the Art Power HK organization to provide various events with informational support and find the target audience on the Internet. Similar European platforms followed the initiative.
The future of the industry
It’s still too early to talk about a complete transition to the virtual space. Online platforms for presenting art objects have been available for several years, but until recently, their sales volumes remained relatively low. The reason might be that virtual copies can’t give a full-fledged sense of a real painting: the screen may distort colors, sizes, and textures. Experience has shown that the cost of paintings tends to affect customers’ intentions. On the Internet, it’s much easier to find those who want to buy a painting for 1 thousand dollars than for a few tens of thousands.
As for museums, the digital services development is much easier here. Even before the quarantine, these cultural heritage keepers displayed digitized copies of the exhibits and organized 3D tours of the exhibitions. These services attracted art admirers who didn’t have an opportunity to come to the museum. Moreover, presentations on the Internet helped to attract new visitors. After the quarantine was imposed, the digital services have become much popular. Most well-known museums have provided free access to their collections and started aggressive campaigns to attract new users. For this purpose, they often used not only digitized copies of the masterpieces but situational marketing techniques as well. For example, viewers are encouraged to reproduce plotlines from famous paintings.
Petro Riaska
Allworld.io service also contributes to promoting art in the virtual space. It helps artists to demonstrate their works using the augmented reality technology. Sculptures and contemporary art installations prevail on the pages of the website. Allworld.io eliminates spatial constraints and completely covers the target audience. The augmented reality technology makes it possible to assess the real spatial characteristics of sculptures, to comprehend their proportions and colors of their elements. When interacting with an art object, a viewer feels deep aesthetic enjoyment avoiding crowds and long trips.
Еhe art industry transition to the virtual space will have another, however, not yet obvious consequence: various galleries’ websites will be as close as one-click from a potential buyer. Therefore, it can be expected that the gap between promoted brands and developing projects will gradually be bridged. Galleries will become more approachable, with more affordable pricing. Young artists will have more opportunities to realize their potential, and they will no longer have to sell their works at understated prices.
Ukrainian galleries under quarantine
The local art market participants faced the same problems as their foreign colleagues. Self-isolation and the prohibition of visiting public places have brought many organizations to the brink of collapse. Except for online projects focused on interacting with a client in the virtual space. In Ukraine, this direction is being developed by KyivGallery. It was founded in 2007 and has an informational infrastructure for presenting works by talented artists. KyivGallery continues its work under quarantine and provides customers with original works of art without risking their health. It is the form of work that will gain the garland soon. Online art gallery KyivGallery is constantly replenished with new works by contemporary Ukrainian artists and sculptors, who work with relevant topics and are in unceasing conceptual search. You are welcome to have a look and purchase their works at affordable prices.
KyivGallery art expert