Art Market’s Bright Post-Pandemic Future

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Courtesy of CK Golf (Flickr CC0)

It has been a little more than a year and a half since the COVID-19 pandemic began and the art market is steadily making a comeback. Millennial buyers spent the most during the first half of 2021 — doubling that of Generation X and almost four times that of what Boomers spent.

Cultural economist Clare McAndrew conducted a mid-year survey of 700 dealers. The statistics McAndrew acquired stated this time last year sales plummeted 20% — today they are up 10%. Art Galleries with a turnover of $13,414,990 or more succeeded to increase sales by 21%. Mid-tier art galleries saw around a 3% decline and those with a yield of less than $250,000 saw only a slight dip in sales.

The pandemic released one of the most remarkable developments; the art market embraced technology platforms thus allowing them to flourish. Some places even began holding physical events at the beginning of the first half of 2021. Online transactions doubled the level of sales from 2019, digital trading accounted for 33% of all sales.

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Courtesy of William (Flickr CC0)

Dealers established that online viewing rooms were not as lucrative as live viewings. However, they contributed around 4% to the top line which is down 9% from last year; many galleries have invested in their own websites.

The art world has slowly become digitally savvy. Foreseeably digital art has been identified as a key area of growth, according to a synopsis of 500 high net worth (HNW) collectors. Traditional media — sculptures, paintings, and works on paper — still constitute the greatest share of spending at 31%.

However, film, video, and digital are growing in importance and account for a significant 12%. Roughly half of HNW collectors stated they would be intrigued by buying digital works in the coming year.

At the beginning of 2021, non-fungible tokens (NFT) were a buzzword. However, their sales are largely conducted on non-traditional art market platforms. Digital art sales accounted for less than 0.5% of the primary market sales value. This share is expected to grow as the art market and NFT converge.

McAndrew’s data cited from NFTs namesake website, at the start of 2020 NFT sales on the Ethereum network grew from $17 million to $1.3 billion ¯ at the beginning of 2021. Around $324 million was from art transactions. Her data further shows  a secondary NFT market emerged in the first half of 2021, “with speculators trading in and out of NFTs at a much more rapid pace than would ever have been possible in the traditional secondary art market.”

Collectors and dealers are largely positive about the impact NFTs have on expanding interest in art. Questions remain over the “slush pile” of inferior secondary NFTs entering the market. McAndrew’s data suggests that the intermediation of dealers “in vetting quality and sorting information” and maintaining knowledge, expertise, and developing long-term relationships, will continue to be advantageous to both collectors and artists in the NFT world and beyond.

Written by Sheena Robertson

Source:

The Art Newspaper: The future’s bright: Millennials help art market stage post-pandemic recovery; by Anny Shaw

Top and Featured Image Courtesy of CK Golf’s Flickr Page – Creative Commons License

Inset Image Courtesy of William’s Flickr Page – Creative Commons License

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