Gold Rush: Editions Take Center Stage in a New Era of Art E-Commerce

Lot 5 in Paddle8’s inaugural Editions auction, June 19 – July 3, 2013. Courtesy Paddle8, New York.

Lot 5 in Paddle8’s inaugural Editions auction, June 19 – July 3, 2013. Courtesy Paddle8, New York.

As has been discussed in countless articles and blogs, the trade in art has been particularly resistant to the e-commerce revolution that has fundamentally altered other markets in cultural goods (film, music, and literature). Though art has been sold via the internet for over a decade, online sales were estimated at only 1.6% of the overall US$56 billion global art market last year. However, analysts and professionals alike see indications that online trade in art is set to rapidly accelerate in the near future. As noted in the 2013 Art & Finance Report, internet sales are now making substantial inroads in the art market and should be taken seriously; 62% of art professionals surveyed “believe that online art business will play a significant role in the art market in the next two to three years.” The 2013 Hiscox Online Art Trade Report likewise projects that online art sales will to grow to approximately 19% of the total market over the next five years and that the main area for growth will be at the $10,000 and under level: this means selling a lot of prints and multiples.

Though a number of startups have come and gone over the past decade (for instance, the initially successful 20 x 200 closed unexpectedly earlier this year), the field has narrowed and gained intensity in recent months. A quick look at any of the new art websites reveals that editions (in the most general sense of the word, including not only printmaking but also multiples and imagery by photographers) undergird its offerings. Many of the new generation of art sites offer fresh business models that portend a fundamental shift in how art is sold. What most of them have in common is a desire to bring the art market down from its ivory tower and deliver it to a wider market, with the financial backing to give brick-and-mortar establishments a run for their money. In response, established auction houses, galleries, and websites are reinventing themselves to remain competitive. Among recent announcements: the highly anticipated “art-genome” site Artsy was launched, Artspace acquired the online VIP Art Fair, 1stDibs is expanding, online auction house Auctionata set a new record price for a work of art auctioned exclusively online, Christie’s also began to hold auctions exclusively online, and the stalwart Artnet named a new CEO in an effort to stay competitive. Perhaps one of the most telling signs that we’ve entered a new era is the fact that Amazon has gotten in on the action. The mega e-retailer announced a new Amazon-based art commerce site earlier this month in partnership with a number of galleries and the online auction/retail site Paddle8.

New Transparency in Retail Sales

For many years, Artnet—founded in 1998—provided the only centralized website for buying art from dealers, but Artspace, Artsy, 1stDibs, and Amazon are now jockeying for pole position. Artnet remains the leader, with approximately 1,700 galleries in 60 countries worldwide listed on its website, but many of these dealers are diversifying their online presence and creating profiles elsewhere as well. Artsy, a visual search engine that allows users to browse according to “genes”—or subcategories of subject matter, medium/technique, and style/movement—recently announced a new “gallery profiles” component, with an impressive list of over one hundred participating galleries and print publishers, including Gagosian, Aquavella, Mary Boone and print dealer Susan Sheehan.

Sheehan, who also lists on the IFPDA site, Artnet, Artsy and 1stDibs.com (a luxury products site that also offers designer furniture, jewelry, watches, fashion, and high-end real estate), feels that having a strong online presence is “absolutely essential. I have gone from having 2000 potential clients to 10 million.”  She estimates that approximately 50% of her sales are initiated online, with the bulk of these coming from Artnet, followed by 1stDibs. Sheehan handles selected prints by Postwar and Contemporary artists on the higher end of the print market, often important, early, or rare examples: prices generally range from around $10,000-$100,000 but the $500,000+ benchmark is not uncommon. Her experience flies in the face of the belief that collectors of museum-quality art must see a work in person in order to be persuaded to buy it, a finding that has been supported by recent market research. Sheehan says that about half of her clients who first contacted her online come in to see the work, but just as many purchase sight unseen.

In an attempt to demystify the buying of art, the gallery tradition of disclosing prices only “upon request”1 has been discarded by the new websites. Sheehan sees art dealing as a retail business and pricelists as a necessity: “When you walk into Bloomingdales you find clearly marked price on everything there –why should art be different?” Artsy is perhaps the most conservative in this regard, allowing galleries to choose whether to post prices or not; at the very least, browsers can search within predetermined ranges (Up to $5,000; Up to $10,000…Above $100,000). On 1stDibs, visitors need to create an account to see prices. On Amazon Art, prices are listed plainly, just as they are for a book or CD.

Prices are also readily available on the catchall site Artspace, which recently announced a major infusion of cash. While it is clearly a commercial website, the initial impression is that of a virtual art lounge where browsers can stumble into a something they like by following their interests. Targeted to young middle- to upper-middle-class consumers, its tone is welcoming and unintimidating. Objects can be found by searches (price range, artist, medium, style) or through more contextual content: interviews, curated collections, and groupings such as “Investment Pieces,” “Global Spotlight,” or “Décor.” Gift cards are available, as is a Gift Guide section, with topics like “For Newlyweds” and “For the Dad Who Has Everything.”  Artists represented range from talented emerging artists (probably mostly from Brooklyn), to major artists like Richard Artschwager, Raymond Pettibon, and Andy Warhol.

In keeping with its approachable brand, Artspace embraces editioned work: its mission page states, “We offer limited editions and original works from the most recognized artists to rising stars and make them available for sale online, at affordable prices.”  The site also publishes its own editions in collaboration with recognized artists (such as Alexis Rockman [illustrated top], Fred Tomaselli, David Salle, and Assume Vivid Astro Focus). Prices start at around $100 and the bulk of its offerings are under $10,000, equally distributed between under and over $5,000. They begin to steeply taper off at around $25,000, with a $1.5M Louise Bourgeois sculpture currently the highest-priced work on the site.

“Living with art and engaging with artists should be accessible to everyone,
no matter where you live or whom you know.”
—The Artspace Team

Artspace’s commercial mission is accompanied by educational content, including an online magazine that includes a NYT-style “The Week in Pictures” slideshow, news stories, interviews, feature articles, an events calendar, and an “Art 101” section that provides breezy primers on the art world. The site also hosts nonprofit benefit auctions (such as IPCNY’s recent Spring Benefit Silent Auction) and appears to be gearing up to expand its services to virtual art fairs, recently announcing that it has acquired the pioneering site VIP Art Fair. VIP is currently presenting six themed “shows” online as details of the merger with Artspace are ironed out.

By contrast, Artsy exudes sophistication. The site design (and price-posting policy) is inspired by the hushed minimalism and spare whiteness of blue-chip gallery spaces. The target market is at a higher income level than that of Artspace, with a number of works at a $100,000 and over price-point. Its database also includes work from important public collections such as the Getty and The National Gallery, “for inspiration.”  The list of investors and board members is comprised of a number of major art-insiders, such as Dasha Zhukova, John Elderfield, and Larry Gagosian. As part of its art “genome” project, the site offers a social media component through which users can create a public profile, mark favorites, share works they like and follow artists, galleries, and nonprofits. Listings include a “more info” button that links to a brief discussion of the artist’s importance and a “view in room” button that allows users to get a sense of the work’s scale. Prints are listed under “Work on Paper” along with unique works, presumably in an effort to skirt any potential stigma attached to the idea of editions.

“Artsy’s mission is to make all the world’s art
accessible to anyone with an Internet connection.”
—Carter Cleveland, Founder and CEO

1stDibs was initially established in 2001 as a source for luxury goods and interior design. It has recently ramped up its art offerings with a “Fine Art” menu that includes a “Prints and Multiples.” Searches can be narrowed by subject, period, or artist. Sheehan notes that most of the inquiries she has received through the site come from “people looking to decorate” and have led to only modest sales.

Amazon Art, which launched this month, is betting that art sales can conform to its existing platform: as discussed on the New York Times’ Artsbeat blog, tongue-in-cheek reviews began almost immediately. The search menu includes a “Prints” category that currently has around 9600 objects, but there are clearly some expertise issues that need to be addressed. Readers of this column will likely spot the problems with this listing of Mary Cassatt’s “Under the Horse-Chestnut Tree” before reading the commentary below that points out a few of them: conflicting media descriptions (lithograph or aquatint?); do the dimensions refer to sheet or image/plate?; what kind of paper is it on?; where is the condition description?; why isn’t there a detailed image of the signature?; why is shipping only $4.49?. Additionally, it is hard to imagine that the blurry, low-resolution image could inspire an expenditure of $185,000.

Catalogue spread for Kiki Smith, Pool of Tears II, lot 93 in Phillips’s Evening Editions sale, April 29, 2013. Courtesy Phillips, New York.

Catalogue spread for Kiki Smith, Pool of Tears II, lot 93 in Phillips’s Evening Editions sale, April 29, 2013. Courtesy Phillips, New York.

The Auction Houses Respond

The Editions Department at Phillips is staking its success on luxurious catalogues and traditional boutique auction house services. The department held its first Evening Editions auction in New York in April 2011, and expanded the event to London this past spring. These sales, which are scheduled to usher in the auction season, are intended to impart the same caché, drama, and glamour of auctions at a higher price-point; estimates in the recent sale began at around $8,000 and went up to about $200,000. In addition to the “je ne sais quoi” allure of the evening schedule, the glossy oversized catalogues are beautifully printed with detailed professional photography, large illustrations and lavish spreads. Descriptions are peppered with images of related works and quotes from the artist; portfolios are presented in their entirety, often with fold-outs. Lots are sequenced to build energy on the floor, arranged according to appeal, conceptual underpinnings, schools, and visual resonance.

Phillips’s approach is worlds apart from the grids of thumbnail illustrations that are accorded to prints in most auction sales catalogues. The luxurious nature of the cataloguing not only lends a greater sense of importance to the works on offer, but also facilitates an appreciation of the object’s singular physical presence or “aura,” to use Walter Benjamin’s term—the elusive quality that gives art its appeal and drives the impulse to collect. Benjamin argued, of course, that reproduction damages the aura of the work of art, but the closer a seller can approximate the visual impact of an object, the greater its potential as an object of desire. Last spring both Phillips and Christie’s impressions of Kiki Smith’s Pool of Tears II (2000)—an oversized hand-colored etching with powerful wall presence that had never appeared at auction. Christie’s put theirs on the cover and gave it a full page; Phillips included theirs in the Evening Editions sale, giving it a double spread and a quote from Smith (both houses included an image of the original book illustration that inspired the artist). Though Phillips’ impression came to the block earlier and had a higher estimate—factors that tend to dampen bidding—the Phillips impression sold for nearly 30% more than the Christies one ($27,500 vs. $21,250, including the 25% buyer’s premium both houses charge for hammer results in this range).

Cary Leibowitz, Phillips’ director of Contemporary Editions in New York, observes that the evening sales have attracted attention from “collectors and advisors with deep pockets who are normally not interested in editions…we are very happy with the number of lots that have achieved record prices.” According to Leibowitz, some 25% of the lots in the London February sale established new records and sale-through rates have been in the 80th percentile. Leibowitz also reports that sales are well attended with a healthy mix of collectors, dealers and advisors. As with other major houses, bidders can attend virtually and bid on lots in Phillips’s auctions through its website, but Leibowitz says Phillips has no other online initiatives in the pipeline: “We serve a serious art-collecting clientele…our catalogues and services allow potential bidders to really scrutinize the work. Online purchasing is for a different type of collector.”

The new online auction site Auctionata, however, has shown that collectors are willing to spend big money online under the right circumstances. Lot 57 in its June 21 auction, a previously unknown watercolor by Egon Schiele titled Reclining Woman, set a world record for a work of art offered exclusively online, selling for 1.827 million Euros (US$2.418 million) with premium. The work was authenticated by Jane Kallir, author of the Schiele catalogue raisonné and the recognized authority on the artist, and the lot description included her extensive commentary and an interview. In addition, the renowned appraiser and art historian Victor Weiner provided running commentary throughout the live auction (see video excerpt here).

Auctionata’s live auction studio with auctioneer Fabian Markus (left). Courtesy Auctionata AG, Berlin and New York.

Auctionata’s live auction studio with auctioneer Fabian Markus (left). Courtesy Auctionata AG, Berlin and New York.

Auctionata, which is based in Berlin with offices in New York, has secured $20.2 million in venture capital funds and is attempting to position itself as a direct competitor to the upper-tier houses. (Its first auction was held late last year). Auctionata’s sales take place online in real time via high-definition video. In addition to its existing Berlin studio, Auctionata recently announced plans to open a New York studio from which live sales will also be streamed. Smaller curated auctions with lots at a lower price point (generally under $1,000), are held weekly on Fridays; while larger auctions of higher-value works take place periodically (the June 21 sale was among the first). The house also has an online shop where items of lower value can be purchased outright at any time. Rather than employ full-time specialists, the house has contracted with various experts around the world (disclosure: I am among them) who place preliminary estimates on potential consignments from photographs submitted online. If the house accepts the work for auction or sale, it is shipped to Auctionata and presented online with professional cataloguing and photography; some lots include commentary from its team of expert specialists. On 16 August the firm will hold a print sale—“Graphic Art from Three Centuries”—but Noel Chhut, the director for North America, says there are no plans for regular print auctions. Print consignments are usually placed in the shop or interspersed with other lots in general auctions.

The more familiar Ebay model has been the favored format for the online auctions held by Artnet, Heritage Auctions, and RoGallery, each of whom sell a large volume of prints; these sites have been in the online auction business for years and lots tend to be on the lower end of the market ($20,000 and under), consisting of large editions by established artists (such as Jeff Koons’s Balloon Dog, edition of 3,000), minor works by blue-chip artists (sketches, small canvases), regional art, work by artists and movements that have fallen out of favor, signed “afters,”original posters, and the like – however, there are sometimes lots of higher value to round out the offerings. Sales are open for a period of weeks or days, bidders set a maximum price they are willing to pay and are notified via email when they are outbid. Presentation is generally lackluster and sales take place continually, so it is difficult to build a sense of excitement or exclusivity. Nevertheless, Heritage managed to nab a world record result in May for a trial proof of Ed Ruscha’s Double Standard screenprint (Engberg 32) signed by Ruscha and collaborator Mason Williams with strong provenance, which sold for $182,500 with premium. (A classic Standard Station [Engberg 5] sold for $194,000 with premium at Bonhams in 2010.)

Paddle8 hopes to reinvigorate the standard online auction model with a more sophisticated presentation and air of exclusivity. Founded in 2011 (also with substantial financial backing), the firm has focused on works valued at $100,000 and under (the average value of lots is about $10,000), and its business model is designed to favor consignors. Its modest team of specialists set estimates and choose properties that are organized into monthly themed auctions; it also partners with nonprofits on benefit auctions that are presented on its site—proceeds from the current sale benefit The Tibetan Nuns Project.

Paddle8 recently held its first Editions sale with bidding open from 19 June to 3 July. The presentation included a video interview with Cecilia Dean, editor and co-founder of Visionaire – a limited-edition, artist-driven “concept” periodical—with supporting footage and interview with Erik Hougen, a master printer at the Lower East Side Printshop. The choice of Dean, a former model and a fixture of the art scene, says much about Paddle8’s brand and intended clientele. The success of the 85-lot sale—which included works by Warhol, Lichtenstein, Kentridge, Sherman, Walker, Condo, Baldessari, Nara, and Struth—has encouraged the house to hold bi-annual sales in this category, with another this fall. The extent of this success, however, remains obscure since Paddle8 does not reveal sales results. Thomas Galbraith, the firm’s Managing Director of Auctions, explains this unusual policy as follows: “We came to the decision to increase consignor comfort, and also out of respect to artists, many of whom feel that public auction prices can negatively impact their market and their practice.”  Naturally, Galbraith declined to share the sale-through percentage but noted that “a Jasper Johns” achieved the highest result.

Paddle8’s presentation is clean and contemporary with large-scale images and simple cataloguing (see first image). According to Galbraith, the majority of its consignors are established dealers and collectors who can provide professional photography, cataloguing, and condition reports for their consigned property, “though in-person condition reports are taken from time to time” by Paddle8’s staff. Condition descriptions are minimal on the site; detailed reports are furnished upon request. He notes that “Paddle8 does not take possession of property—dramatically reducing the costs and friction points for sellers” (the firm offers a limited guarantee similar to other auction houses). This allows the company to offer a highly competitive sales commission structure of 6% for sellers and 12% for buyers, in stark contrast to the punishingly regressive sales commissions levied by the major auction houses at this price point – generally 25% (sellers’ rates are variable, depending on the overall value of the consignment as well as other factors, generally around 10%).

A Rising Tide

There will undoubtedly be more dramatic shifts in the online art market in the coming years before relatively stable ground is established. For example, Both Paddle8 and Artspace host online benefit auctions for nonprofits, and it will be interesting to see which comes out ahead in this market niche. Whatever the developments, prints and multiples will surely form the backbone of online art offerings. As noted by Galbraith of Paddle8, “editions are one of the types of property that collectors feel most comfortable purchasing online.”  Heightened competition and transparency will lead to a marketplace benefiting consumers; by extension, it will be difficult for the unscrupulous to overcharge. Like Artnet, existing dealers, auction houses, and websites will be forced to take a hard look at their practices and adapt to stay competitive in the new terrain. If the new sites achieve their aims, a majority of online consumers will feel comfortable purchasing and having an opinion about original art, with at least one limited edition print amongst their prized possessions.

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  1. Many states and municipalities, including New York City, have laws requiring prices for goods (including art), to be clearly posted. In compliance with the letter, but not the spirit, of the law, many dealers keep pricelists behind the desk that are produced only when requested. Others do not have them at all; prices are only shared verbally. []