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Will Art Fairs Replace The Traditional Art Gallery - ArtLyst Article image

Will Art Fairs Replace The Traditional Art Gallery

28-08-2011
 
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A new report from CINOA reveals startling new facts

High profile auction sales of Warhol, Picasso and the Impressionists reported via news headlines doesn't accurately reflect that art and antique dealers account for fifty percent of the global art market's sales. A new report sponsored by the leading non-profit dealer association CINOA finds that fairs and online business are poised to become the main source of revenue for dealers in the art and antiques trade. E-retail is expected to surpass traditional offline sales by 2020. Collectively dealers consist largely of discreet, low profile individuals and small businesses, preferring to focus on finding great art to match with the right client, rather than publishing high flying sales prices as the leading auction houses customarily do.  Clare McAndrew’s new study, the first of its kind, explores the essential role of art and antiques dealers within the art market and as a consequence society as a whole. It offers insight into how and why the art dealing profession is changing, and what this means for the trade as well as collectors. It has also been noted in the report that gallery visits are declining as the art market expands to new international centres served better by art fairs or electronic media. The growth of fairs brings with it huge pressures for dealers to fund travel, staff fairs and find enough stock. Whether the traditional gallery model can sustain all this pressure remains to be seen, so says The Art Newspaper.

The Facts


The market divide between dealers and auction houses has wavered at around 50:50 globally for the past decade. There are about 400,000 listed dealers of fine and decorative art and antiques in the major global art markets, however, the top 2% to 5% of dealers account for well over half the value of sales.

- Aggregate art sales worldwide in 2010 were approx. 43 billion euros (split roughly in half between auction houses at 21.1 billion euros in sales and dealers with 21.9 billion in sales).

- There are about 25,000 auction houses worldwide, with Christie's and Sotheby's dominating many sales categories.

- About 375,000 dealers are listed worldwide, with 5,000 or 2-5% of dealers accounting for half of sales by value. The average dealer does about 60,000 euros in sales, including those working part-time.

- The dealer sector is more male dominated with 56% male and 44% female while the top-tier auction houses are about 56% female, and second-tier auction houses are roughly split evenly.

- Collectors and dealers fall in an older demographic: 80% of buyers are aged over 45, 60% were over 55 years old. Dealers are primarily over 50 years old.
- The rise of the event-driven marketplace has seen a proliferation of dealer fairs. The one-room excitement of fairs competes with auction houses and their competitive energy.

- Nearly every dealer has a website, but online sales are low at 3-8% of dealers' sales totals. Web use is primarily for communication with clients, or to expose some inventory in     a low-risk way to a broad audience. The internet has provided more transparency to the market, including auction prices, but sometimes this information is incomplete (for
example, some art price databases show hammer prices and not the price with commission, or they do not show the best woks by an artist on the market).

- E-retail is expected to grow at five-times the rate of traditional offline sales and its year-over-year dollar intake is expected to overtake offline sales by 2020.

- A competitive challenge for dealers is the auction houses with their powerful marketing arms, and their increase in private sales.

- Competition for a dwindling supply of quality non-contemporary artworks and antiques is another hurdle.


The competitive landscape of the art market has seen many changes in the past 50 years as power has been redistributed geographically and between market players. One of the most recurrent themes that dealers cited in the research is the challenge they have faced in recent years of dealing with the increasing power of the auction houses, which over the past two decades have transformed from being wholesalers to effective retailers. Many dealers now compete with them for clients and stock. While the auction houses have gained relative market power over the past 20 years, the survey highlighted key areas where dealers still maintain a competitive edge. Dealers often offer better protection and fuller and more legally binding guarantees with less caveats. They can also be better value than auction houses as they often take smaller commissions.

For more information: Download the full CINOA report for free.

" It’s also important to protect your investment!! Having your artwork authenticated by professionals is an incredibly important step if you want to be successful in the art market. If you need any help on this please visit www.monetexperts.com. Have a great day! " - 01-04-2013  

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