Key Findings from The Art Market Report 2021

For its fifth edition, the annual Art Basel and UBS Global Art Market Report has once again partnered with Artory to give the art world its first comprehensive look at the art market’s performance over the past year.

The Art Market Report 2021 is the art world’s premier benchmark for the study and analysis of the general art market, art collecting, auction houses, galleries, fairs, and online sales. By using data from sources, including Artory’s neutral database with information sourced directly from auction houses, The Art Market Report offers objective, independent research and shares Artory’s goal of bringing greater access to credible information to the market. Here are 5 key findings from The Art Market Report 2021.

As stated in Art Market Report: “Global auction data is supplied by Artory. Artory’s database covers 4,000 auction houses with over 35 million records, with consistent auction results gathered annually for 250 businesses in 40 countries and 500,000 artists.” Artory’s database, which contains millions of transaction records from auction houses across the globe, was an integral part of the research conducted in the report. The Artory team worked closely with renowned economist Dr. Clare McAndrew–founder of Arts Economics and author of the report–to provide her with the most relevant and trusted information about the global auction market.

Total Sales in the Global Art Market

Global sales of art and antiques reached an estimated $50.1 billion, down 22% from 2019. Online sales of art and antiques reached a record high of $12.4 billion, doubling in value on the previous year, and accounting for a record share of 25% of the market’s total value.

Although many businesses maintained a significant number of transactions online, on aggregate, the volume of sales was estimated to have decreased by 23%, with some of the biggest declines reported for dealers and fine art auctions. This brought the estimated volume of sales to 31.4 million, its lowest level since 2009.

Much of the decline in sales and volume can be attributed to the COVID-19 pandemic. As is stated in the report, “The art trade was particularly vulnerable in this crisis, being based on discretionary or non-essential purchasing, and heavily reliant on events and travel. While dealers and auction houses found ways to maintain exhibitions and trading online, the pandemic had a profound effect on sales, employment, and business practices,” (Art Market Report 2021, 32).

With the pandemic (hopefully) entering its final months, it is still unclear how the effects of the crisis will carry on into the future. As will be discussed later in this article, however, the art market went through significant restructuring, which the Art Market Report argues will shape the future of the art market and the art world at large. One of the largest restructurings within the art market has been buying and selling art online.

Looking Online

According to the report, “The pandemic created an exogenous shock that has provided the impetus for change and restructuring, encouraging new collaborations and working practices, with the most fundamental shift being to an increasing share of online sales and exhibitions,” (Art Market Report 2021, 344). The share accounted for by online sales expanded from 9% of total sales by value in 2019 to 25% in 2020, the first time the share of e-commerce in the art market has exceeded that of general retail. Aggregate online sales reached a record high of $12.4 billion, doubling in value from 2019.

The share of online sales in the dealer sector, including art fair OVRs (Online Viewing Rooms), expanded threefold in 2020 to 39% from 13% in 2019. Dealers at all levels showed significant increases in the online component of their sales, with the largest advance by those in the $10 million-plus turnover segment (to 47%).

Auctions also shared in the success of moving online, with Sotheby’s and Christie’s (to name a few) putting together innovative online events that wowed the art world. As is shown in Figure 3.10, however, the largest share of online sales was reserved for lower value brackets. This reluctance to buy online at higher values signifies the traditional importance placed on seeing art in-person. This reluctance highlights the importance of secure digital vetting infrastructures and access to trusted information.

The implementation of tools like Artory is here to answer these perceived issues within the art market. “One solution may be with the four-year-old firm Artory, based in New York and Berlin, which is working to provide greater transparency in quality and provenance with a free blockchain-secured art registry backed by the vetting and appraisal services of the global Winston Art Group,” writes Barrons. By offering access to appraisers and trusted, validated information from our network of Partners, Artory can convey quality and security amid an increasing volume of online offerings.

Read more on Artory’s offering during the COVID-19 pandemic here.

Going Digital: More Than Sales

As the art market continued their digital transformations, dealers and auction houses diverted more resources to IT (including internal IT development, websites, hardware, software, and third-party online costs), with spending up by close to 80% year-on-year, making it the highest element of ancillary spending at $3.5 billion (21% of total spending). While auction houses saw a strong increase of over 50%, dealers’ spending almost doubled to nearly $1.9 billion, the majority of which was on internal IT development.

Artory is a valuable tool for art institutions wishing to protect their artwork information, issue blockchain-secured certificates, and increase client confidence when navigating the digital landscape. By using The Artory Registry, galleries, auction houses, appraisers, and other art organizations leverage blockchain to secure and protect artwork information. In doing so, institutions create a time-stamped, unalterable record of ownership and provenance which can be shared privately with their clients through permission-based access. Artory therefore enables institutions to issue digital proofs of purchase, authenticity, condition, and more to their clients through a fully secure and private platform.

An Art Market for Everyone

In recent years, the art market has continually been shown to be top-heavy in nature. The economic issues brought about by the crisis in 2020 could intensify this polarization. Organizations faced with crises often adopt a more social orientation, basing transacting on the social position of the partners they exchange with and increasing exclusivity in their exchanges.

When quality cannot be directly observed, an increasing number of ties to higher-status actors (for example, galleries or artists) is used as a measure of perceived value and
esteem, while a lack of such ties (or ties to lower-status actors) deflate these valuations.

As the art market becomes more accessible through online sales, Artory is an essential tool for collectors: giving them access to services typically reserved for the highest echelon of the art market.

The Artory Registry and free price database allows institutions and collectors to participate in the art market with more confidence. The price database gives all market players access to historical transaction data sourced from around the globe, making it a valuable tool for informing collectors on price trends and other art historical research. 

Separately from the free price database, only trusted institutions can cryptographically sign and record information on the blockchain in The Artory Registry: guaranteeing the veracity and credibility of signed information on Artory. The Registry thus creates a repository of trusted and vetted artworks within Artory’s already massive database.

The Importance of Art as an Asset

Financial motivations remained an important part of collector motivations. According to the report, “Using art as a method to diversify their portfolio of wealth ranked the highest of the financial motivations in the majority of markets, while expected return on investment was the key financial driver in France, Taiwan, and Italy. Financial motivations also declined with age, with three-quarters or more of millennial collectors regarding them as important versus around half of Boomers, and a minority of the Silent generation collectors,” (Art Market Report 2021, 321). Furthermore, “Some collectors had a relatively high proportion of their overall portfolios of wealth invested in art, with 61% reporting an allocation of over 10%,” (Art Market Report 2021, 290).

As art becomes an increasingly important section of collectors’ portfolios, both in economic and sentimental value, wealth managers need additional tools to measure rising prices and market performance.

Artory can be a useful tool for wealth managers as well. Each artwork’s data, history, and provenance can be stored digitally, including data about changes of ownership, condition, and exhibition history. New information can be added from art experts who subsequently encounter the work, such as the leading appraisal firm Winston Art Group. Records maintained through Artory can make it much faster and less expensive for wealth managers to confirm a particular work’s provenance, authenticity, and current whereabouts. Buyers can thus have greater confidence in their acquisitions, while their wealth managers will have greater confidence in an artworks placement within their portfolios.

To go beyond these 5 key findings in The Art Market Report, read the full Art Basel and UBS Global Art Market Report, and learn more about Artory here!

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