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Faced with a global crisis, the art world has achieved valuable progress in 2020. While there is still much to do, the recent advances may bode well for the future.
Amid the worst pandemic in more than a century, certain activities and businesses have shown great resilience.
Indeed, some have even managed to thrive.
In many cases, this is not entirely surprising.
With whole populations confined to their homes, demand for video conferencing, digital entertainment, and regular deliveries of gadgets, gifts and groceries was more likely than not to increase.
By contrast, resilience from the high end of the global art industry would have been harder to foresee.
However, that is indeed what we have experienced, as a newly published Citi GPS report sets out.
During the first wave of the COVID pandemic, various international art fairs, top galleries, and leading auction houses displayed admirable adaptability.
With little notice – and amid intense uncertainty – they rapidly recreated some of their leading events in digital format.
Many of these initiatives were very well received, as Suzanne Gyorgy, Global Head of Art Advisory and Finance, notes in the report:
“In March, Art Basel Hong Kong took the decision to hold an entirely virtual fair instead of the planned physical event. The virtual gallery gave viewers resources they don’t usually get on the floor of a fair, such as direct access to research and background information, and most transformative, pricing data. Digital incarnations of the Frieze Art Fair in New York and Art Basel in Switzerland were even more user-friendly and comprehensive.”
Despite the sharpest economic downturn on record, collectors were clearly in the mood to buy.
Suzanne highlights the vibrant virtual activity at the leading auction houses:
“Sotheby’s online-only sales grew year-on-year by 413% in the first eight months of 2020, with less pronounced growth seen by Christie’s (+120%) and Phillips (+52%). Sotheby’s debut livestreamed auction generated $363.2 million, followed by Christie’s event that achieved $420 million.”
The digitization of sales activity was accompanied by robust price performance, as the report also highlights:
“In the first seven months of 2020, the Masterworks.io price-weighted All Art Index — which tracks the art market as a whole — was up 5.5%...Meanwhile, its Contemporary Art Index and Impressionist Index gained 6.7% and 2.0%, respectively.”
In contrast, global equities were somewhat down for the same period.
And commodities and real estate – which like art are considered “tangible” asset classes – were down sharply.
Strikingly, it was the top end of the market that did best:
“The weighted Contemporary Art Index experienced a 6.7% gain, versus a modest fall of 1.9% in its unweighted counterpart. This tells us that higher-priced works — especially paintings purchased for over $500,000 to $1 million — tended to perform better than lower-priced works.”
All of this is surprising on quite a few levels.
Prior to the pandemic, the art world had proved a reluctant adopter of digital technology.
As Anders Pettersen, Founder and Managing Director ArtTactic, writes in the report:
“… online sales still accounted for only 6% of total auction sales in 2019, a sign that online sales were merely a sideshow.”
Anders explores some of the reasons for this historical wariness of technological innovation, including a lack of pressure for change.
Encouragingly, he thinks the industry has now crossed the digital Rubicon:
“More than half of art buyers surveyed by ArtTactic recently said they believed the art world’s move online during COVID-19 will lead to a permanent shift, and that the art market will not revert to normal as we come out of the pandemic.”
The art market’s outperformance of various other asset classes in the first seven months of 2020 was also not what we might have expected.
Previous crises – including the Spanish flu, the 1970s oil shocks, and the Global Financial Crisis of 2008-09 – were all associated with sharp falls in the art market.
The report points to the brevity of the disruption in financial markets as one possible reason for art’s resilience in 2020:
“So, whereas a deep and sustained drawdown in risk assets might have left them [buyers at the high end of the art market] less willing to purchase expensive artwork, the market action in 2020 did not.”
The art world’s adaptability in 2020 has also raised hopes that other much needed progress may follow.
Over time, art museums have frequently drawn criticism for their slowness to address issues of diversity, equity, inclusion, and access.
However, the last twelve months have put a spotlight on these vital matters.
According to another of the report’s contributors, independent curator Marianne Lamonaca:
“This discussion is not entirely new, but it is much louder, broader, and more urgent than ever before in my thirty-year museum career.”
Marianne then explores some of the promising work underway in areas such as welcoming new audiences, revamping curatorial practice and training, and promoting truth and reconciliation.
Naturally, achieving these sorts of fundamental shifts will be challenging.
But as the experience of the last year shows, the art world is more than capable of adaptation and innovation.