At Meural, we're driven by art democratization and transparency—and so we've developed a series at the intersection of art and commerce. Each installment provides an objective, accessible debriefing of a financial aspect of the art industry. Read more about the series' objective and what's to come.
by Elinor Case-Pethica
The first online auctions took place in 1995, with the launch of Onsale. This was shortly followed by internet giant Ebay, and a slew of others. It took a relatively long time for fine art to develop an online sales presence, considering that the technological precedent was well in place. Christie’s launched their online auction platform in 2006, Christie’s Live, after seeing the success of online luxury goods sellers such as Net-A-Porter. Over the past few years, the number of high-price online art auction platforms has exploded. Online purchases of art in 2016 totaled an estimated $3.27 billion, with online auctions representing about two-thirds.
As with all internet sales, auctioning art online poses some inherent risks. There is the obvious issue that a photograph of a work can be misleading—details like texture can be lost or downplayed, and colors can be skewed by the way an object is lit in a photograph. Another major issue is scale; online bidders may be given the dimensions, but the image itself is limited to the size of the monitor which can drastically change the visual impact and feel.
Credit: Andrey Popov / Shutterstock
Another thing to consider when buying art online is the relative ‘safety’ of the purchase. There are better protections put in place for items bought in-house than for those bought online. For instance, Christie’s and Sotheby’s guarantee a five year window for a buyer to reverse a sale, should the work turn out to have been attributed to the wrong artist, and a four year window of protection against various legal issues that may arise on the seller’s side. Many online-only auctioneers provide windows of only several weeks. Guarantee windows aside, legally speaking there is little that can be done if an artwork purchased online is less-than-ideal when it is finally seen in person. Purchasing safety varies greatly from site to site, making it very important to fully investigate the legal protections being offered before clicking ‘bid.’
There are also many benefits to the online auction model—the most important of which being increased access. Rather than needing to be in whichever city an auction is taking place in, online bidding can happen from anywhere in the world. Being able to bid from home, rather than fly to London or Hong Kong could be a deciding factor in whether a collector decides to buy, especially for mid to low range price points. The online model also allows bidders to search by category, bid more rapidly, avoid the process of registering for a paddle, and even dodge the high-stress social context of the auction house bidding floor. An additional plus is that it is cheaper overall for the auction house to sell online than in person—meaning that the fees added on to the sales price are more minimal.
British Insurer Hiscox estimates that online auction sales will total close to $10 billion per year by 2020. The online market is clearly growing—the major question is how this rise in online bidding will change the market overall; whether online auction houses are simply a new player in the system, or whether they represent a paradigm shift.
Current auctions on Artsy.net
The art market overall has shrunk over the past few years due to increasing economic uncertainty, yet online sales are reported as being up 24% since 2014. The seemingly contradictory vitality of the online market may be because of an average lower price point—for the most part, online sales are lower-end, meaning pieces valued at $10,000 and below. The bloat in the online market may be more a symptom of a shift in market focus from the upper end to the lower. What this means for the art market overall, is perhaps that a split is occurring—the market drifting off in two different directions like tectonic plates. The internet allows purchasing less expensive works to be faster, easier, and simpler to access. These are words that would never be applied to buying a multi-million dollar piece; the in-house auction process is part of the glamour of collecting high value artwork. The separate parcelling of these two modes of art-buying may free up both to move further in their own directions and become more specialized to their target audiences.
Statistics from The Hiscox Online Art Trade Report 2016.