Globalization

Art and insurance are both global businesses. However, as it is internationalized, art becomes vulnerable to more interruptions and uncertainty.

According to the South China Morning Post, the results from a Christie’s auction house’s annual show in 2017 revealed that clients in Asia spent more on non-Asian art and artifacts than Asian pieces. Despite a growing appetite for Western art in China, the trade war and political unrest has taken a toll on consumption. For example, a New York art gallery expanded to Beijing and Hong Kong, but closed due to uncertainty. In the United Kingdom, the world’s second largest art market, Brexit is having a similar impact on the art market.

The unknown will continue to impact the global art market in the new year, affecting both appetite and prices. Failing to find solutions to these overarching issues will lead to negative impacts on art consumption. After all, the art market, like any other financial market, does not thrive on uncertainty.

On the positive side of globalization, art is flourishing in the Persian Gulf, Saudi Arabia, and Russia – markets that helped stabilize prices during the last global financial crisis. The value of Arab states in the art market is reinforced by recent expansion like The Louvre and Guggenheim’s new locations in Abu Dhabi. Russia’s hot market, however, may see some softening in 2020 because of sanctions and fluctuations in the petroleum market.

Climate Change

Collectors, galleries and institutions will continue to grapple with climate change exposure. According to the World Meteorological Organization, over 62 million people around the world were impacted by extreme weather in 2018. The uptick in extreme weather events – from hurricanes and wildfires to subzero cold and drought – all factor into how art needs to be handled, transported, displayed and stored.

There are different exposures to art based on zip codes. In the event of a catastrophic loss, insurers know what the exposure is and how it has been priced. Since 2005, insurance professionals have focused on aggregate issues, or accumulation of exposure, in the wake of Hurricane Katrina and Rita to ensure there is enough reserve to fulfill policyholder’s claims.

The art world will also continue to struggle with rising water levels. The World Meteorological Organization’s report also claimed that over 35 million people were affected by flooding in 2018. Coastal cities that serve as hubs for the industry, like Miami, Venice, Amsterdam, and New York, are a growing area of concern. Conversations about how to best safeguard the art will continue in the upcoming year – with everything from moving facilities to building new systems to protect priceless works. 

The damage that was caused and the significant losses were, to some degree, a surprise to the insurance industry, which had never seen seasons with that degree of intensity. Areas faced with wildfires, as well as surrounding areas, become more susceptible to flooding while recovering. This increased risk is a result of the dramatic change in terrain and the ground’s diminished ability to absorb water. The Federal Emergency Management Agency says that areas affected by wildfires are at increased risk for up to five years to face flash flooding and mudflows, even if they were not typically flood-prone areas in the past. 

Wildfires continue to intensify in both scope and frequency. In 2016 and 2017, California was hit by major brushfire losses. According to the National Interagency Fire Center, there were 65,575 wildfires in 2016 and 71,499 wildfires in 2017. In 2016 5.4 million acres were burned, and in 2017 it increased to 10 million acres, which was higher than the 10-year average.

This is a major concern for the art industry, since fire makes the restoration process of damaged art very difficult, and at times impossible. Fire can completely consume artwork, and smoke and heat damage can lead to significant challenges. All art collectors, especially people in fire-prone areas, need to invest in art insurance or risk losing their pieces for good.

Escalation of Art Values

In 2020 art values will continue their sharp upward trajectory as wealth increases around the world. According to The Art Market 2019, a report written by founder of Arts Economics, Dr. Clare McAndrew, the art market was valued at $67.4 billion in 2018, a six percent increase from the year before.

The spread of wealth around the world has expanded art worldwide, especially in China – now home to the world’s most billionaires, India, and Saudi Arabia; access to disposable incomes to acquire artwork has increased consumption. However, this becomes a matter of supply and demand; there are only so many historic artworks available for purchase.

Overall, there are many changes on the horizon within the art market in the new decade. Similar to other areas of business, the art world will need to prepare for and adapt to challenges presented by societal, economic, and environmental concerns. Looking ahead, it will be interesting to see how these obstacles are overcome, and how it will impact the way art is bought, sold, and protected.

Joe Dunn has served as president & CEO of Huntington T. Block (HTB) for nearly 15 years.  HTB is the leading specialty fine art insurance brokerage firm in the United States and manages exclusive underwriting facilities for Lloyd’s of London. Joe has grown the practice by successfully leading the team by providing risk management and insurance solutions to the fine art industry. Sources: South China Morning Post, World Meteorological Organization, Federal Emergency Management Agency, National Interagency Fire Center, The Art Market 2019, and Arts Economics.

The post Three Key Trends Guiding the Art Market in the New Year appeared first on Art Business News.

In the weeks ahead, the majority of the art galleries in most of the popular cities will be open to showcase their greatest shows. Auctioneers will be present to show how their masterpieces are fit for sales. The art fair will pick up its speed as it progresses towards Art Basel in Miami.

As the fall season begins, you need to consider the global and political trends that will affect the industry. These trends will influence how the art market performs in the months to come.

1.    The chills of Britain’s Exit

London’s biggest art market is just around the corner. However, this year things could be different since Britain’s departure from the European Union will happen on 31st October. How will the impending Brexit affect the art transactions from now on?

First, foreign dealers and collectors will want to move their art out of the UK once the auctions are over to avoid transporting low-value pieces. Most dealers fear that the art market might experience some downfall if there will be a no-deal Brexit.

Last year’s annual art auctions in London was hugely successful because Brexit was not a distraction at the moment. In 2018, the art market in the UK grew slightly thus making it one of the biggest art markets in the world. According to the Art Market Report, UK’s art market was the second largest in the world.

The looming political tensions and complications with the logistics may prevent potential buyers from purchasing some of the best pieces of art in the world. However, Brexit might have a couple of benefits to buyers. For instance, it might allow high volume collectors to transport their holdings without having to pay taxes and import fees.

2.    The growth of Paris

Paris’s art fair popularly known as Foire Internationale d’Art Contemporain takes place two weeks after London’s Frieze. Paris’s fair has become increasingly popular in recent years thanks to President Macron who hosted a party for artists and dealers in town last year.

There have been several signs indicating a growth in the art market in Paris. For instance, one of the biggest dealers in the art industry, David Zwirner announced that he’ll be in town. His new space in the gallery will open during the fair with a Raymond show. A painting by Nicolas de Stael will also be lined up for the evening sale in Paris the same week.

3.    Tariffs and the Chinese Market

The first month witnessed trade wars between Donald Trump’s and Xi Jinping’s administrations in the art market. Any Chinese artwork that is more than one hundred years old entering the US market will be subjected to a fifteen percent tax. This added cost has been reported to havoc the Chinese art market not only in the US but also around the world.

Long before the tariffs were effected, tensions between the two great leaders could be felt. And now, the art market seems to be taking a toll. Pace Gallery announced in July that it would close its outpost which was opened in Beijing back in 2008.

Pace Gallery was among the first galleries from the west established in China. The founder of Pace Galleries reported that it is difficult doing business at the moment in China and it has been the case for some time now.

The trade war might not affect the Asia Week which is about to happen in New York because most of the art pieces available were imported before the tariffs were imposed. The longer the tariffs are imposed, the bigger the impact they’ll have on the art market in China.

4.    Midsize galleries on the rise

Last year, some of the biggest galleries in the world showcased the best works by deceased artists. This has given the representatives of the deceased artists a chance to work with some of the largest bodies of bibliographies, inventory and exhibition histories. This strategy has led to the rise of mid-size galleries which are showcasing the works of artists who might not be very popular.

For instance, Andrew Edlin is a New York-based dealer who showcases the works of outsider artists. A few months ago, his gallery reported that it would be representing the self-taught artist Pearl Blauvelt whose works were discovered in an abandoned home after her death back in 1987.

With estates becoming increasingly proactive, you can expect the level of competition in the art market to increase as well.

5.    Skateboards and whiskey are joining

London is expected to hold a unique sale of exceptional single owned pieces collected over twenty years by an anonymous collector. The estimated value of these pieces is around five million dollars. The collection consists of the most valuable collection of whiskey bottles.

At the beginning of the year, Sotheby offered an entire set of Supreme skateboards which are limited editions. They featured the works of Marilyn Minter and Damien Hirst to name a few. The single lot had an estimated value of eight hundred thousand dollars.

In May this year, Sotheby made the news again by making online sales of more than 1300 pieces of streetwear brand. In June, Christie set the world auction record when it sold the guitar of Pink Floyd, cashing a total of 21.5 million dollars.

Conclusion

As an artist or a collector, it’s important to take note of the trends happening in the art market today. These trends will affect and might revolutionize the entire art industry in the future. We have reviewed what is happening in some of the biggest art hubs in the world today.

By understanding these trends, you’ll have the ability to come up with clear strategies and resolutions to succeed in the future. Just like technology, art will play a huge role in the years to come.

Bio

Michael Gorman is high skilled freelance writer and proofreader from UK who currently works at australian essay writing service and assignment writing service. Being interested in everyday development, he writes various blog posts for boomessays and papersowl and discovers new aspects of human existing every day. He can be reached via Facebook or check his Twitter.

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The art space has created opportunities for both art lovers and artists. For artists, there is an increase in areas of specialization and an increase in income for them. For art lovers, it stimulates and enhances the way they think and behave.

Despite the boom in the art business, many artists are affected by underpricing, difficulty in licensing and weather fluctuations which affect preservation. With the rise of technology, many art galleries have been experiencing positive changes too. A modern art gallery must consider implementing the following to do well in this line of business.

1. Email marketing

The online space accommodates billions of people. In 2018 it was recorded that there are about 4.1 billion online users. As a result, there is a great need for an online presence that will guarantee the visibility of the art galleries. Hundreds of galleries open every day. Art is becoming digital and it’s hard for content to be seen due to other activities.

Personalization goes a long way to enhance online art products. You can implement this by using marketing automation tools to personalize email subjects according to recipients’ name if you’re sending out a mass newsletter.

Email marketing has recorded great success in many modern businesses. If you implement it, the competition will have less effect on your product because you have a target audience.

2. Sales news, statistics and audience spending pattern

As an artist, you cannot do without following the news about art and art sales in the industry. For instance, in 2017 when global sales increased by 12 percent to $63.7billion, the follow-up on such news will give an artist the idea on how to sell and the best season to sell.

There is a lot of uncertainty in the market today, including the everyday political noise which will affect the interest rate. A very good example of such news is the sales of ARTnews and Art in America to Penske Media Corp in February 2019 which led to a $200 million cash infusion from sovereign nation’s public investment fund.

Keeping a tab on trends in governmental policies will further boost your knowledge on what is affecting your sales positively or negatively. You should note for instance that any government policy that restricts migration will affect the influx of people in art galleries.

There is an increase in the interior design sector hence, a change in the spending pattern in this sector. As an artist, you should understand the spending pattern at different seasons to successfully carry out a satisfying exchange.

The current trend is that galleries are now reserving high-dollar artworks to avoid driving the prices down in the market. For example, mid-market sees an uptick while the high art piece sees a pullback. This results in a higher purchase by the collectors. Although this might restrict placing the expected worth on your art, it will enhance the sales and growth of your business.

3. Growth of virtual reality around the world

The increase in digital and virtual reality in the world today is the game-changer for online sales. This growth is largely disrupting ancient approaches to the art business. Hence, as a 21st century artist, it is necessary to follow the digital growth.

Technological advances have made it easy for most people to have access to smartphones and many of these people spend a lot of time doing various things on their smartphones. You can leverage this emerging trend, to make your marketing completely digital. For example, enhancing your website’s navigation is a good way to reach out to more people who use mobile devices.

4. The ecosystem trend of exchange

As an artist, you should be open to the trend of collaborative exchange with other artists all over the world. The world is already a global village, collaboration and not independence is the new goal. This collaboration will encourage an ecosystem of exchange of different artworks.

Your collaboration is not limited to artists only but also to companies, art collectors and organizations that can support and sponsor art fairs. You should aim at following, creating and sustaining partnership that will promote your art business.

Creating this ecosystem of exchange is not to extinguish competition but to enhance a collaborative space and symbiotic relationship in the industry. With engagement in exchange and collaboration among participants in the market, the entire industry could transform into luxury space for all.

5. Interactive content

The world has left the stage of mere advertisement and it has developed to marketing through interactive contents. Interactive content is an excellent medium of marketing. By allowing your audience to interact with your content, you can boost engagement and create more love for your gallery.

You put up content that tells the story behind every art and seek their opinion. For instance, you can put up an interesting and captivating interactive post asking; which of your works suits their current interior design or individual preference.

Interactive content plays an effective role for customer research. You can do this by asking followers in the social media space on what works, artists and events they like. Alternatively, you could even give them ownership by allowing a poll on their favorite piece to feature in an upcoming window display you are setting up or theme of your next exhibition.

Conclusion

It’s evident that the art market has stood the test of time and continues to remain strong, even with the changes in social and economic conditions all over the world. Awareness of domination of online sellers and taking the advantage is the best for any art business to stay relevant amid emerging trends.

Michael Gorman is a highly-skilled freelance writer. He is one of the pro writers from UK who writes bid4papers review and engages in custom writing services. Being interested in everyday development, he writes various blog posts and discovers new aspects of human existence. He can be contacted via Facebook or check his Twitter.

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