Jun 17, 2023 - Economy

How the art world went corporate

The Statue of David wearing a suit and tie.

Illustration: Allie Carl/Axios

Individuals have made good money in art for many centuries, but rarely — until now — has it been a corporate venture.

Why it matters: As buzzy branding pushes out genteel connoisseurship, art becomes more of an aspirational global status signifier, increasingly indistinguishable from other luxury goods.

  • That creates myriad opportunities for monetization — but also concentrates art collecting within the jet set.

Driving the news: Art Basel, the biggest art fair in the world, is off to a strong start this year, with asking prices as high as $60 million and "palpably optimistic" crowds on opening day.

  • The fair's new CEO, Noah Horowitz, was quoted in the NYT as saying that “people are ever more driven by brand,” adding that they "buy from Art Basel galleries because we’re a brand.”
  • James Murdoch, who now seems to control Art Basel in its various global incarnations, used the word "brand" some 15 times in a rare interview with Artnet's Tim Schneider, talking about the art fair as a "traveling circus" designed to "build connectivity to those brands."

Elsewhere in the art world, Galerie Perrotin seems likely to sell a controlling 60% stake in itself to Colony Investment Management; mega-gallery Gagosian has created a corporate-style board of directors even though it's still (for now) 100% owned by Larry Gagosian; the Supreme Court ditched art appreciation in a recent Warhol case and instead concentrated on the financial licensing; and Gen Xers in the art press are sneering at a wave of "Gmail art advisers" who, like the new collectors they advise, are "more interested in cash than art."

The big picture: In recent years there's been a generational change in terms of who buys art.

  • Baby Boomers, who dominated the art market for decades, are now generally more interested in bequeathing their collections than they are in adding to them.
  • Millennials are coming into real money — either by making it or inheriting it. Compared to Gen X (which is both small and jaded), they are more likely to embrace corporate brands rather than reject them out of hand.

Between the lines: Companies see obvious value in selling to collectors who see no shame in liking brands. Often, those collectors come from Japan, China or Korea — countries where the branding of cultural consumption is both more overt and more sophisticated than in much of Europe.

  • Art dealers who show at Art Basel have always been brands — they provide the institutional credibility that transforms a painting into an asset. But they've historically been coy about their status as tastemakers.
  • While Boomers like to be convinced that they're collecting works of objectively high quality, Millennials are often happy just to be able to buy into the exclusive club of people who own works by the hot artist of the moment. It's not as dumb as buying a monkey jpeg, and it's often not even as expensive.

Increasingly, collectors are self-consciously buying art for the same reason they buy any other branded good.

  • In a world where luxury goods juggernaut LVMH is worth $450 billion, there would seem to be a huge amount of potential upside in the global gallery business.

The art market, 25 years ago and now

2023: “Any fairly nice painting by a mid-career artist [without massive institutional support] is now around $300,000," art adviser Sibylle Rochat told Artnet's Naomi Rea this week. "Young artists with a bio the size of a stamp are now $30,000 to $50,000."

1997: "When I was an art dealer, any biggish work of art was worth $500. Any littlish work of art was worth $200," wrote the late art critic Dave Hickey in his essay collection "Air Guitar." "Today, a biggish work is worth $1,000 and a littlish work is worth $300."

Where it stands: Most of today's art world believes on some level that cheap work — paintings that sell for a few hundred dollars, say — isn't serious.

  • It might be fine decorating the walls of a coffee shop, but the idea of collecting such work is befuddling and quixotic. (The only exception: If you're extremely rich and your idiosyncratic collection also includes priceless works by the likes of Frida Kahlo.)
  • Art galleries have been in grow-or-die mode for many years now. Artists at small galleries either go nowhere, or else they get buzz and leave for a large gallery boasting a global network of high-net-worth collectors. Either way, the small gallery struggles.

The bottom line: As the art world goes global, what gets lost is local art dealers selling the work of local artists to local middle-class doctors and lawyers.

  • As a result, even if the total amount of money in the art world is going up, driven by ever-higher prices for a handful of superstar artists, the number of artists the art world can support could well be dropping fast, along with the number of collectors.
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