A Deeper Look Into The Art Market
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The art market is currently valued at USD 50 billion. If the art market were an individual, it would be worth as much as some of the world’s greatest billionaires. Jeff Bezos is the wealthiest person globally, worth $177 Billion, Elon Musk ( $151 billion ) is the second richest person in the world. His fortune includes Tesla and Amazon shares. It can be challenging to understand how such an important industry (the art market) can generate little income for artists and collectors. The global contemporary art market generated $ 2.7 billion in revenue in the 2019/2020 season, 11 times more than two decades ago. It does not change the fact that compared to other industries, it is very little. The problem is that there are too many variables at play when it comes to estimating what will happen in this rapidly changing market. However, there are some simple ways to understand how the art market works.
1. The death of art: how to be rich and not know it. Art is not an investment? Contrary to popular belief, most works of art are sold only once and remain in a private collection for many years or even generations. Images that do not appear in auctions have a high potential value. The value of the work is not checked until it is put up for sale. Art appraisers can only estimate a value based on the transactions made. The owner may not want to know how rich he is. The energy he draws from communing with real art satisfies his life needs. I am convinced that such collectors constitute the majority, the rest deal with trade. The subject of art with potential value is vast; I will come back to it in future articles. Let me leave it here. The death of art occurs when it is hidden in the vault, and the values are saved in the excel table.
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2. The Art Market Is Way Bigger Than You Think. 102,000 Contemporary works sold at auction over 12 months, generating a total of $2.7 billion, but NFT sales surge to $10.7 bln in Q3 2021 as crypto asset frenzy hits new highs. It’s not surprising that you’ve never heard of NFTs, as they’re unique. This is good news for the art market, as more people buy from artists or hold their works as investments. If you think this is a good thing, then you’re probably an art investor. If you think it’s a bad thing, then maybe you should start taking a closer look at the market, which attracted 1.63 billion visitors last year.
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3. The art market: where are we now? Canva (graphic design website) is currently valued at $ 40 billion. Let me remind you that the entire turnover of contemporary art in 2020 is estimated at $ 2.7 billion. This fact is significant. The energy of art and its influence on reality is not commensurate with its market value. A graphic design app is worth fifteen years of trading in contemporary art. The reason is that the app’s founders took into account the art world’s leading trends and then resold it in a new form. This is precisely what happened in the bull market: an enterprise that knows how to trade effectively on movements can become very valuable. If we take $ 2.7 billion and compare them with $ 40 billion, the difference is enormous. Such a gap indicates that we need to rethink how we identify global trends and add our value. That means for art that is coming; the sky is the limit.
As you can see, the art market has an astounding amount of power. It influences our culture in so many different ways. But the key to understanding the market is understanding its limits. Unfortunately, the market’s limits are ambiguous at best. Just because something is worth $20 billion doesn’t mean it’ll always be worth that figure. It has gone up and down numerous times over this century alone, just like anything else in life! So keep your eyes peeled for what’s coming around the bend next!
I am an Art Curator, founder at EvArtology, and ML consultant at MLearning.ai. I advise companies and institutions in the creative industries on how to use AI tools in their daily work. Human collaboration with ML models can be very creative and bring huge benefits. The new era begins now.
