Predicting Art Market Profit Potential Pt. 1 – artmarketblog.com

Predicting Art Market Profit Potential Pt. 1 – artmarketblog.com

Using auction prices to identify trends and determine whether the price being paid for a particular artist’s work is on the rise is all well and good, but by the time the price of an artist’s work begins to rise in a rapid manner, the best opportunity to profit from the price increase is likely to have already passed. Auction price databases such as artprice.com and artnet.com are extremely useful but they are really only useful for artists who already have an extensive auction sale record. What if there were a system that was able to identify those artists who are most likely to achieve market success before they actually do?. Well, you may be pleased to hear that there is. By looking at what is essentially one of the most influential factors that determines the success of an artist’s career, namely how many exhibitions an artist’s work is included in and how important those exhibitions are, ArtFacts.net is able to rank artists according to their fame and popularity in the cultural sphere as well as in the commercial gallery sphere. That ranking, according to ArtFacts.net, is generated according to the theory that the greater number of shows the artist has, the greater will be the fame of a particular artist. And, as we all know, familiarity generates demand, and increased demand equals increased value (usually). I don’t think that anyone can dispute the fact that museum and gallery shows make artists more saleable and raise the price of their work.

The way that the ArtFacts.net Artist Ranking Tool works is by assigning different points values to particular types of exhibitions and the different institutions and galleries that hold these exhibitions. The number of points assigned to an artist depends on the importance of that institution/gallery exhibiting their work and the amount of exposure that the exhibition gives the artist in question. According to the ArtFacts.net website “Solo shows are worth more than group shows or art fairs. Documenta, in Kassel, Germany, is worth more than the Venice Biennale. Public museums count more than galleries. And different museums have different weights. Those in cities like Paris or New York count for more. Small museums and university museums count for almost nothing”. There does of course have to be some sort of criteria to determine whether an artist is worthy of being included in the system which is where the eligibliity criteria come into play. For an artist to be ranked they must have a sufficiently international presence which in the case of ArtFacts.net means those artists that have long term ties with at least three countries. According to ArtFacts.net “A.R places great importance on the international representation of artists. Only artists operating in international structures will be chosen as a primary value source. The reason why A.R does this is because it recognises the worth of mutual knowledge. Only artists who are common to diverse societies, countries and/or cultures will be really important and therefore create a kind of brand or universal value (like a standard). So the A.R uses internationality as a standard for the basic calculations.”

To be continued…………..

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

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The Spectacle of the Art Market Part 3 – artmarketblog.com

The Spectacle of the Art Market Part 3 – artmarketblog.com

Natalya Goncharova's Linen

I am sure that many of you would agree that it has become the norm for people to approach fine art as consumers instead of as scholars or connoisseurs. If you were to ask me whether there is anything wrong with this I would say that there definitely is. Don’t get me wrong, I am obviously a strong supporter of the art market, but also recognise the need for a balance between the commercial and the cultural. Without that balance the art market becomes unstable and the art world becomes too closely connected to the art market. Whether you realise it or not, the art market requires a certain level of “infiltration” by scholars and connoisseurs. It is the scholars and connoisseurs who add value to works of art by generating information and knowledge that make works of art historically and culturally more significant. It is this information that is generated by scholars and connoisseurs that we should be using to justify the dollar value of a work of art because this information is usually based on intrinsic characteristics of the work of art that cannot be disassociated from the work of art or become obsolete, and therefore encourage more stable long term values. The contemporary art market, on the other hand, often relies on factors that have very little to do with the work of art its self such as social status, economic status, popular trends and financial gain. These factors can become obsolete very quickly which usually means that the dollar value that these factors generated also disappears causing the sort of correction that we have just experienced.

In February of 2008 Nicholas Penny, the curator of the British National Gallery, made a statement that he was going to put an end to the gallery’s blockbuster exhibition days. According to an article in the Guardian Newspaper, Penny said “The responsibility of a major gallery is to show people something they haven’t seen before. A major national institution should be one that proves a constant attraction to the public. What is important is encouraging historical and visual curiosity in the general public.” Ralph T. Coe, the former director of the Nelson Gallery-Atkins Museum in Kansas City, Mo., a former president of the American Association of Art Museum Directors and a former chairman of the Museum Committee of the National Endowment for the Arts, put the problem in even simpler terms when he said: “One of the saddest things museum connoisseurs like me have had to observe is the substitution of entertainment values for the intrinsic values incarnate in great works of art that alone can confer aesthetic authenticity.” This problem of the substitution of entertainment values (the spectacle) for intrinsic values that the cultural sector is experiencing is also a big problem for the art market as I have shown above. We need to stop the spectacularisation of the contemporary art market if we want to have a more culturally and historically significant period of art production. I believe that we need to be asking the following question on a far more regular basis: in one hundred years time will this work be able to be exhibited in a museum, and will people consider the work to be culturally significant and be historically important?

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications

The Spectacle of the Art Market Pt. 2 – artmarketblog.com

The Spectacle of the Art Market Pt. 2 – artmarketblog.com

If you read my last post (which is the introduction to this post) then you may be asking yourself whether art market trends can really be dictated to a certain extent by such a simple and primitive human instinct.  The evidence that I have come across suggests that it can.  In fact, a recent study linked the human attraction to shiny objects with a primitively instinctual attraction to, and desire for, sources of water.  I would would like to believe that my decision to purchase a work of art is primarily based on some highly complicated thought process or a  highly developed taste for art and sense of style, and not on some primite instinct that we really don’t understand or have any control over.  But we are all only human after all.  And humans are highly complex and emotional creatures who are susceptible to those emotions that make us human.  When you think about it, it is really not that bizarre to suggest that art market trends can be dictated by an instinctually emotion judgement as opposed to a complex process of reasoning.

Charles Saatchi is the undoubtedly the quintessential purveyor of shiny objects and is known to be particularly fond of highly visual, high impact works of art such as those produced by Jeff Koons and Damien Hirst who are both products of the Saatchi empire. Therefore, if I was going to use anyone as an example of the human attraction to bright,  shiny works of art then it would have to be Saatchi.  Interesting, it is a well known fact that Charles Saatchi is NOT so keen on photography or video art.  Why is this interesting I hear you ask? Well,  of all the different mediums that come under the banner of art it would have to be photography and film that are the least likely to incorporate the bright and shiny elements that are present in the type of works that I have been referring to.  Bright colours and shiny elements are usually absent from video and photographic works of art thus making these two mediums less likely to evoke that instinctual attraction that humans have to bright and shiny objects.  Video art in particular is a medium that cannot rely on high impact, instantly attractive elements to engage viewers.  To appreciate and interact with a work of video art usually requires that the viewer to spend a considerable amount of time watching the video and thinking about what is happening.

When it comes to the impact that instinct and emotion can have on the art market it is interesting to compare the current art market buying trends with the state of the global financial sector.  As I said in my last post,  one of the interesting trends that has been particularly noticable during the recent current art market correction is that works that have less visual impact and are not as flamboyant are experiencing competitive bidding and high prices.  This trend is the opposite to the popularity of high impact, bright and shiny works of art that was evident during the playful and heady days of the art market boom when the global economic outlook was far more positive.  Just a coincidence?  I don’t think it is.  To me it would make sense that people would purchase works of art that coincide with their state of mind and the emotions produced by the circumstance that they are in at the time.

There have been studies that show that different types of perfume are purchased according to the state of the economy.  A recent article featured in the Financial Times ‘How to Spend it’ magazine mentioned  that “floral fragrances – the safest, least challenging perfume category – have historically flourished in a recession”.  In his book ‘Why Yesterday Tells of Tomorrow: How the long waves of the economy help us determine tomorrows trends’ of 2001, Helmut Gaus used womens fashion trends as an example of anxiety and functional anxiety-driven behaviour.  According to the statistics compiled by Gaus, during periods of high anxiety women wear fewer patterns, darker colours, clothes with lower necklines and skirts that are longer.  During periods of less anxiety women wear more patterns, brighter colours, clothes with higher necklines and skirts that are shorter.  From these two sets of data it seems that during periods of high anxiety the less complicated, less flamboyant and less colourful become more popular and the reverse during periods of less anxiety when times are good.  I see no reason why the art market shouldn’t experience a similar trend.

to be continued……….

**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications