Art auctions: the reasons for a dramatic decline that began before Covid
di Gaia Stanzani
year’s dramatic decrease in global auction sales was certainly affected by the Covid Crisis. However, as analyzed by Katya Kazakina and Allisson McCartney’s Bloomberg article published in November 2019, this decrease began before the pandemic; triggered by a global socio-political climate of instability that the pandemic has aggravated. Auction houses attempt to avoid a further devaluation of the market by predominantly crediting this significant decrease in sales to a decrease in supply, reassuringly stating that demand is still high and that buyers are still willing to pay high prices for masterpieces. However, this consistent considerable decrease in sales is probably the result of both diminished demand and supply.
Due to a global panorama of economic and political uncertainty caused by events such as Trump’s election, Brexit, Hong Kong protests and, currently, the Covid Crisis, owners of prestigious artworks are less willing to sell their pieces and buyers less willing to buy at high prices. Furthermore, as suggested by the Scott Reyburns’s New York Times article, this decrease in supply could also be the result of a decreased guarantee policy that discourages art owners to sell their works at auctions. Additionally, due to global socio-political and economic uncertainty buyers feel more comfortable purchasing prestigious art works through private sales rather than auctions. This is reflected by both Benjamin Sutton’s Art Market report and Scott Reyburn’s New York Times article that states that the private sales at Christies and Phillips rose by a significant 24% this year. This pandemic threatens an already precarious market by introducing the challenge of digital auctions. The online conversion of auctions presents a challenge for auctioneers as buyers become less willing to spend high amounts of money on art works they are unable to purchase and survey in person.
For this reason, the market of high end art works is particularly affected. However, this online conversion presents a possibility for a growth in lower end work sales as it presents auctioneers with a means to extend consumer reach. By shifting auctions online, auction houses broaden their reach, rendering themselves more appealing to a younger, millennial audience. In the long run this shift in modality could prove itself to be a useful tool of efficiency maximization as former in person lower end auctions could be permanently transferred online, saving costs and rendering live auctions increasingly exclusive and anticipated events. This pandemic also comes as an opportunity for potential growth and innovation, forcing the art market to adapt and restructure itself. This is reflected by the merging of competitors as auction houses and galleries come together to maximize and diversify their range of buyers. Major auction houses such as Sotheby’s plan to collaborate with a variety of smaller galleries to organize digital auctions and Christies is currently collaborating with La Biennale Paris to organize a digital auction. In order to avoid rendering digital auctions impassive and impersonal, auction houses are getting creative, trying to render online auctions as interactive as possible. As stated by Melanie Gerlis in the Financial Times, Sotheby’s plans to turn its digital auctions into a hybrid of standard zoom meetings and interactive video games. In doing so, Sotheby’s plans to ensure the complete involvement of buyers so that the auction itself is turned into a form of virtual art.
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