Highlights from the Hiscox Online Art Market Report 2020
As the risk of COVID-19 continues to encourage social distancing and limited use of public spaces, many wonder how the art market will continue to be affected from both a social and economic perspective. One key question the Hiscox Report asks is whether or not art collectors will finally adopt the use of online tools in a market which depends so heavily on in-person interaction at places like art fairs, gallery openings, and auctions.
GROWTH AND PREDICTIONS FOR 2020
Online sales saw a steady decrease in rate of growth from 2015 to 2019 for both auction houses and independent platforms. However, the total price and number of sales for 2020 is projected to skyrocket. The report states, “Pure online-only auction sales by Christie’s, Sotheby’s and Phillips generated $370 million in the first half of 2020, which was which was more than five-times higher than the same period in 2019.”
COVID-19 has naturally spurred collectors to flock online to acquire art. The top three auction houses, who have invested deeply in their online sales platforms over the past few years, are seeing perhaps the most substantive success in growth and total sales. “Sotheby’s is reporting a 131% increase in the number of lots sold online so far this year (May 2020) and a 74% increase in average price compared to 2019.”
MARKET OUTLOOK
The pandemic has catalyzed a large move to online buying and, paired with the sentiment that social distancing is here to stay, the change may be a permanent one. As the idea of a “return to normal” becomes more and more distant, it is hard to predict what will happen once art institutions open back up and restrictions are eased. Regardless, the general sentiment is that the pandemic will have an overall positive affect on the online art market. From the report: “The large majority (80%) of online art and collectibles platforms maintain a positive outlook for the online art market in the coming 12 months. This is higher than our initial survey, conducted as the World Health Organization (WHO) declared COVID-19 a pandemic in March, which showed that 74% had a positive 12-month outlook.”
As positive growth within the market is expected to continue, online platforms largely plan to stay online without a physical space. The report states that, of the platforms surveyed, only 29% had a physical presence (such as a gallery). When asked if their platform had plans to open a brick-and-mortar presence, 63% answered negatively.
Competition and market disruption also loom over these platforms, however, and increasing success may lead to large shifts in the business landscape. According to the report, “A large majority (67%) of platforms think the online art market will be dominated by a few global players within the next five years. While the ten biggest platforms globally account for approximately 68% of the total online market, some of those surveyed (48%) think disruption from an outsider is a real possibility. The tougher market conditions imposed by COVID-19 could speed potential consolidation up, or even trigger an acquisition spree among the stronger players, including traditional auction houses keen on building a stronger online presence.”
LOOKING FORWARD WITH ARTORY
“Will coronavirus (COVID-19) be the catalyst to finally ignite a spluttering online art market? … I am going for a bold yes.” says Robert Read, the Head of Fine Art and Private Clients at Hiscox. “Online sales could account for half of the art market within the next six years.”
With large evolutions coming to the online art trade, Artory is the natural answer to increasing confidence and security in the market. As dealers and auction houses move their businesses online to mitigate the effects of COVID-19 on the general art market, buyers too face uncertainty and a lack of confidence in buying artworks and interacting with art institutions. Speaking on the online art market, Anders Petterson states in an article by Barron’s “one explanation for the market’s relative weakness in the face of so much wealth is the opacity of art pricing and information-sharing.”
Artory is here to answer these possible issues within the online art market. Artory aims to add an additional layer of confidence to online sales by registering and securing artwork information on the blockchain. When sellers register the artworks they sell online on Artory, they can guarantee that a credible, trusted expert has validated the artwork information and that the information has not been altered, increasing the confidence of buyers in the artwork’s condition, authenticity, and provenance. Buyers are encouraged to register the artworks they buy online on Artory to have them recognized with digital signatures from trusted Partners and art institutions, such as the leading appraisal firm Winston Art Group. Registering on Artory records artwork information immutably on the blockchain, guaranteeing that your valuable data is secure in perpetuity.
Registering information on the blockchain is stronger than etching the information in stone. By having trusted artwork information secured on the blockchain through Artory, collectors can participate in the art market with enhanced knowledge and higher returns. As the Hiscox Report states, 30% of the platforms surveyed were already considering integrating blockchain technology. Find out more about Artory registration here.
Artory is an innovative tool for art businesses. Art buyers want their artworks to be verified for years to come with a digital signature from experts—to have their artworks stand out as trusted among millions of unverified artworks and thus increase the work’s potential resale value. Galleries, auction houses, museums, certified appraisers, and other trusted experts in the art market can register on the blockchain artworks they sell, exhibit, appraise, or inspect. If you or someone you know is interested, we encourage you to reach out, and become a partner on Artory today.
Read the full Hiscox Online Trade Report here.
Read more on Artory’s offering during the COVID-19 pandemic here.
