Artprice Clarification Regarding the Article Published by Artemundi Global Fund on the Demise of Auction Houses
PARIS, December 9, 2012 /PRNewswire/ –
Thierry Ehrmann, founder and CEO of Artprice, wishes to clarify and remove any
misunderstanding or confusion between his company and the Artemundi Global Fund (AGF)
following the latter’s publication of an article on the demise of auction houses, and
particularly of Christie’s and Sotheby “For whom the bell tolls: the death of Christie’s
and Sotheby’s
[http://www.artemundigroup.com/2012/10/for-whom-the-bell-tolls-the-death-of-christies-and-sothebys ]
“.
In the first place, Artprice’s CEO wishes to state that it has no capital links,
interests, contractual agreement or partnership with Artemundi Global Fund whatsoever and
that there is absolutely no link between Artprice and the afore-mentioned publication
which highlights some of the economic and social realities that are now inevitable for
auction houses in the Internet era.
Five years ago, Artprice itself drew attention to the inevitable demise not of auction
houses that have been its partners for 25 years as such, but of auction rooms, in the
physical sense, as places where artworks have been sold for centuries via a process of
competitive bidding. Artprice suggested that the general public, including professionals,
amateurs and art collectors, is likely to gradually shift away from sales rooms, large or
small, and migrate to the Internet which now has roughly 3 billion users worldwide.
The confusion between Artprice and the Artemundi Global Fund seems to stem from the
fact that, firstly, Artprice’s article of five years ago used similar semantics, and,
secondly, the article by Artemundi Global Fund refers to statistics published by Artprice.
That Artemundi Global Fund makes perfectly legal use of Artprice data does not mean
that Artprice supports or agrees with the contents of AGF’s article, even if the latter is
undoubtedly based on serious data with substantiated and interesting arguments. Remember
that in the context of its historical activity and as world leader in art market
information, Artprice provides statistical information every year to 6,300 printed and
broadcast media as well as to a large number of research bodies.
Artprice’s position is very clear: the Internet represents for the auction houses -
which have always been its historical partners and clients – a significant cultural and
economic shock, just as it has been for the printed press.
In this context, Artprice believes the auction houses are making the right decision by
allying themselves with Artprice and particularly with its Standardised Marketplace
(protected by intellectual property rights) in order to conduct a mutally beneficial
cyber-metamorphosis, since the majority of them do not have the means to build adequate
infrastructures and/or because they do not have the copyright and Sui Generis rights to
reproduce Artprice’s Standardised Marketplace.
In fact, the leaders of the top global auction houses are fully aware that the middle
market is now on Internet. In an interview with the French economics daily “Les Echos”
earlier this year, the CEO of Christie’s unambiguously stated that “The future of the
middle market, i.e. of works priced between EUR800 to EUR10,000, is on the Net”. According
to Artprice, this middle market represents 81% of global art market auction transactions.
Pursuing this logic, Artprice can only observe (now that it is also physically
established in China), that for the large Chinese auction houses that have emerged since
the 2000s in contrast to the centuries-old Anglo-Saxon auction houses, the concept of
physical auction rooms does not really make much sense at a time when all the major
players with substantial purchasing power on the global art market are effectively using
the Internet and hence do not need to physically visit an auction house. Asia, which will
soon represent around 70% of the global art market, is in effect showing the way forward
for the 21st century.
Moreover, Artprice, via its partnerships, can already confirm that in 2012 China will
totally belittle the American and European art market after already substantially
exceeding it in 2011 (China 41.4%, U.S. 23.6%, UK 19.4%, France 4.5%).
For information purposes only, Artprice provides a link to Artemundi Global Fund’s
full text on the demise of auction houses in English. The page also includes links to
French and Spanish versions of the same article (original written Spanish)
http://www.artemundigroup.com/2012/10/for-whom-the-bell-tolls-the-death-of-chrisites-and-sothebys
) http://www.artemundigroup.com
Original Version in English “FOR WHOM THE BELL TOLLS: THE DEATH OF CHRISTIE’S AND
SOTHEBY’S
“Progress finally has caught up with the major art auction houses. Consider this
carefully. You are reading that Christie’s and Sotheby’s death sentence is about to be
carried out. It is time for the art industry to either be ready for the future or be left
behind? The concept of selling art at auction houses is an anachronism that has been held
up by the traditions of art sales that have supported old forms and stodgy protocols for
how to connect buyers and sellers.
The technology revolution is pretty much decimating every storied seller in every
industry and the art auction houses are not immune to the revolution. It was inevitable.
The auction house, a middleman that earns commissions that average 25 percent, has marked
its own grave through its inefficiency. Just as fast the internet destroyed newspapers,
the auction houses soon will be relegated to a footnote in the annals of history where the
list of businesses that have died due to poor business judgment grows larger by the
second.
For some, it is an incredible assertion that auction houses are dead when Sotheby’s
and Christie’s have had recent record sales, but those who question these facts have not
looked carefully at global auctions. While on its face, during the past five years gross
auction market sales have been steady in terms of gross sales, closer scrutiny shows that
the market has been buoyed by sales at the top 1 percent of the market which are not
sustainable over time. To put this in perspective consider that in 2007 the global auction
market reached its peak at $31.2 billion dollars while sales in 2011 were $29.9 billion
dollars. The recent numbers, however, are misleading because of record prices such as
Giacometti’s L’Homme qui marche at $104 million dollars and Munch’s The Scream at $119.9
million. It is probable that in a healthier economic environment these prices would have
not been achieved. In the art jargon, the Giacometti and Munch pieces are called objects
of passion, which are “trophies” purchased by the super rich. According to Art Price, 58
percent of the total auction market revenue in 2011 came from 1% of all lots, i.e., the
over inflated trophy art sales. Record prices for these trophy pieces certainly do not
reflect the general market. For example, according to Clare McAndrew, of the 36.8 million
art transactions in 2011 only 1,680 lots were valued over $1 million dollars. The
bottomline is that the amount of auction market sales are misleading.
The simple fact is that auction houses have onerous overhead, which they are afraid to
shed. You cannot blame them, but they have marked their own graves. Theirs is a fate that
they can neither avoid nor, as their actions show, wish to avoid. You do not need to be
Nostradamus to predict the future the art world. It is happening as this article is being
written. Art funds are growing in value and in number. What began as an investment
experiment in the late 70s has now been accepted as an institutionalized investment
vehicle. Moreover, art funds have the resources to attract highly valued art portfolios
and to form synergies with all the players of the art market, while auction houses are
stepping on everybody’s toes.
Internet sales are changing the infrastructure of the market; in the last couple of
years they have had a slow but steady growth. On average 5% of the auction bidding and 10%
of dealer sales are done online. Furthermore, internet has increased the amount of
information available to the public creating a more transparent and competitive
environment.
Ask the auction houses this question: Why do we need you? What are you doing for me?
The answer is increasing irrelevant as the auction houses try to hold onto a position that
already has been rendered irrelevant. This means the auction houses are blinded by
self-preservation and cannot be trusted when asked to evaluate your artworks because they
have such a high stake in the art that is being sold.
1994 work in Sears a guy in college tells you’re going out of business … The next
great seller of electronics will not have a store. Will not have been in bunnies as of the
last 200 years and will have a corporation with 200 Ivy league graduates. Yet that is
exactly what will happen.
So what is the future? The traditional brick and mortar auction houses are dead; it is
not a matter of if, but just how soon. Auction houses are an anachronism born of an age
before the internet and proficient computer users. In the past, an auction house was an
important location to connect a buyer and a seller. It was a place where accurate and real
market prices were set. A seller was willing to pay a premium because there were limited
means to reach buyers. But those days are gone. The auction house is an expensive middle
man that has become an unnecessary transaction cost. The future is an art exchange with
lower overhead where commissions will almost be zero. It will look more like the New York
Stock Exchange than Ebay or Amazon, but there is no doubt that the art market already has
moved in this direction. Paintings will arrive in a centralized location, be catalogued
and inspected by experts, and then sales will be conducted. Javier Lumbreras.”
About Artprice:
http://www.artprice.com (c)1987-2012 thierry Ehrmann
As of the close of markets on 21 December 2012, ARTPRICE will join the French SBF 120
stock market index. In the framework of its quarterly review of the Euronext Paris
indices, the meeting of Scientific NYSE Euronext Committee for Indices on 6 December 2012
decided to admit Artprice.com as one of the companies listed on the CAC Mid 60 and the SBF
120 indices. http://www.artprice.com (c)1987-2012 thierry Ehrmann
Artprice is the global leader in databank on Artprices and indices with more than 27
million indices and auction results covering more than 500,000 artists. Artprice Images(R)
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from 4,500 international auction houses and auctioneers and publishes a constant flow of
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today the world’s leading Standardised Marketplace(R) for buying and selling works of art
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SOURCE Artprice.com
