This is What the Real Art Market Looks Like
by Jonny Boys
MY BACKGROUND IN THE BUSINESS
I started my glorious career in the gallery business on a whim in the early summer of 2006. My contribution ultimately began as a co-visionary, in how to renovate the space and give it an old, used industrial look. That aside, I assumed I would have some fun and get to hang out with my friends.
During the 2007-2008 season I was put into the position of being Co-Director of our Cincinnati gallery with my friend Mason Paul. That was the year I really learned about curation and managing all aspects of a gallery. My eyes were opened to how grim the art market was in Cincinnati. Little did I know that is just the state of the low to mid market gallery business all around the United States.
But not one to be easily discouraged, I decided it was time to move to Portland, Oregon and open my own gallery. My wife and I moved out in March of 2008. We ended up an hour south of Portland. But I couldn't justify opening a space with a two hour commute in a city with a limited pool of serious collectors of emerging art.
I joined the board of directors for the Keizer Art Association in June of 2008, where I went right to work developing a website and began engaging the public via social networking. By the end of the year the membership had voted me in as the President of the board of directors. I had a vision to bring younger generations into the organization with several programs, including giving free memberships to the high school students in our city, and the creation of a one night, once a month art show that was open to anyone in the community.
The last idea was a bold move, especially in the art community. Few institutions are truly OK with allowing anyone to show, because art needs rules applied to it and the art community has a need to judge what is “good art” and what is “not art”.
So we opened and developed the Emerge Art Show. Simple and to the point, we were showing emerging artists, both fringe and outsider. We had an overwhelmingly positive response from the community. Our first show, in March of 2009, had about eighty people show up to it. As the months progressed so did the turnout, we were peaking out at about 300 people by August.
I stepped down off of the board of directors over a difference of opinion with another board member and didn't look back. I took the show with me over to our neighboring city, the state's capitol, Salem and co-hosted the show with my friend Lari DeLapp who owned Coffee House Cafe. With the help and hard work of about 15 friends we renovated Lari’s 2400 square foot warehouse space into our once a month gallery space. In March of 2011 we held our last show because the Coffee House Cafe went out of business.
In August of 2011, I signed a contract with NW Scion Events to host a once-a-month art show in Portland, Oregon at their space, theSLATE. The show lived on under the name Emerge Underground. Our last show was October 26, 2012.
I have done consulting work for a number of brick and mortar galleries in Salem and Portland as well as several Portland pop up galleries. I ran my own business as an art dealer from 2008 to 2010. Now that you know my personal history of involvement with art, let me tell you what I know about the real art market in the US.
THE REAL ART MARKET
As I did in Volume II, I will give definition to the art marketplace, which is crucial to having a sound understanding of it.
The art market is made up of four tiers, the Internet, the gallery, the art fair and the auction house. Of the Internet and gallery tiers there are three markets, low, mid, and blue chip. In the mid and blue chip markets there is the Primary market and the Second Market. Most artists work only sells in the Primary and never makes it to the Second Market, which traditionally sets the value of an artist’s work. Art enters the second market via estate sales, auctions and private sales between collectors.
The mid to low market galleries are the most prevalent type found in average US cities. Typically low galleries sell works in the under $5,000 range. Mid market galleries sell work in the $3,000 to $15,000 range. There really is no comparison with blue chip galleries. The name actually comes from poker, the blue chips have the highest value of all of the chips. Collectors usually purchase from blue chip galleries because they tend to have sound reputations for selling original art and most especially steer collectors clear of forgeries.
Perhaps the fastest growing sector of the mid to low market is actually the Internet. Artists do not have to meet the demands of “what is art and what isn’t" in the eyes of a gallerist, they can produce and sell at their own pace, and most of all not pay out a commission that ranges anywhere from 15% to 60% to galleries. Sites like deviantART, Saatchi Online, and Etsy afford artists the ability to get exposure to both established and emerging collectors. It is true that some collectors and galleries fear selling art online because of the risk of fraud, but for the majority of the market this is an afterthought.
The most noticeable differences for brick and mortar galleries are total sales. The US market of art collectors in the low and mid markets is underdeveloped, if there is any at all. Most people go to gallery openings and admire the art and time after time I have heard the comment, “I would love that painting, but I need to pay rent”. The blue chip market refers to these folks as “lookers”.
Low and mid market gallerists really struggle to find buyers for the art that they show and many of them stay open under the delusion that someone with money will happen by and magically buy the most expensive piece in the space. From my personal experience in both non blue chip markets, I know that the total sales for these galleries are just enough to pay the overhead and many gallerists go unpaid, sometimes for years. Blue chip galleries are making sales because they have capital that they spend on creating a strong and continuous brand, they go to art fairs around the US and the world furthering their ability to reach out to collectors, most of all they don’t wait for collectors to walk in their doors to buy art.
For decades there has been an “us against them” mentality from both ends of the gallery spectrum. The blue chip market in mid to large cities really work hard to set the tone of what the arts should look like in their city, never taking time to consider how their vision would effect the new markets in the low and mid gallery sector. In the same way the mid to low market want to steer clear of the blue chip market because there is a fear of the old staunch attitudes towards rules and stuffiness of traditional art.
If you want to sell art you have to take a page out of the “blue chip handbook” and bring the art to the collector. Over the past thirty to forty years the market has failed to develop a new generation of collectors of art priced under $15,000. Partially because most mid to low market galleries stay open less than five years. But in this case art associations and art museums on the local level have also dropped the ball. The focus has been strictly on educating a limited scope of the public on the appreciation of art, instead of the appreciation and purchase of art.
The reality is that this new generation of low/mid gallerists are left holding the bag on developing new collectors. It could take ten years to plant the seed, but on a positive note many economists are saying that it could take that long for the national economy to come back online completely. So the goal would be to spend time developing the entire community into art collectors, which in turn, for possibly the first time ever would drive the low and mid market into a more secure place financially.
I think the best possible case I can make for the statement, “anyone can collect art” would be from by own personal experience. In 2010, I found myself as the Visual Art Coordinator for Coffee House Cafe. My job was to curate solo and group art shows each month. We had several collectors come in an buy everything, sometimes up to 30 pieces, in one shot. It was the epitome of a low market microgallery. The most consistent collector we had though was homeless. He would come in and talk to me at length about the art and what it meant to him, he would contact the artist, pick up some odd jobs around town and then he would buy his art. He must have purchased twenty pieces in a year and a half. He used to live in New York City, and was a former artist from a family with means, but unfortunately he suffered a mental break and in turn he lost everything. But he still had an appreciation for art and told me on many occasions how important what I was doing was for the community.
When we talk about educating the public on buying and appreciating art we need to see that anyone can collect art. Imagine people not buying prints from big box stores like Z Gallerie, Ikea, and Target, knowing that they can buy original art from local artists in the same price range. I have seen many people walk into Z Gallerie and drop $800 on a giclee with a textured coat on it to make it look original. I know of hundreds of artists in Oregon that sell original work right in that price range, yet there is a disconnect between the public and artists. Part of the blame is that there is no good central place to find local artists and the other part is that print buyers are too lazy to make the commitment to buy original art, because it’s harder to make an impulse buy in the low/mid market because the art is harder to find.
Another issue in the low/mid market is artists are unwilling to sell the originals so they sell numbered prints, many times not on archival quality paper and not with quality ink, so the purchaser is buying something that will not retain value and in reality will never have value without the original selling in the primary market. It is as if everyone saw what Thomas Kinkade was doing and felt justified in selling prints. I realize that in the low market artists think that they cannot sell their originals and therefore must sell prints. But the reality is that the artist needs to lower their prices for their art especially if they are new to the market.
This is the real art market where the reality is that art dealers and artists continue to struggle to make sales because they continue to fail to see the need for the development of collectors for their market class.
I believe there is a new generation of emerging art gallerists that have seen the writing on the wall and are working to bring their sales up by marketing their artists to a new base of collectors. I am excited to see what this low/mid market looks like in ten years.