Hiscox Online Art Trade Report 2020

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Hiscox Online Art Trade Report 2020 ® Hiscox online art trade report 2020 PART ONE: THE ONLINE ART TRADE Cover artwork: Ann Craven, Heart of Gold #1, 2009 | 11 x 8 1/2 inches, Zerox Print Edition for White Columns, 2009 | Edition #10 of 50 plus 10 APs Courtesy of the artist, Southard Reid, London and White Columns, New York INTRODUCTION 1 KEY FINDINGS 2 ONLINE ART SALES 4 ONLINE ART SALES GROWTH AND BREAKDOWN 5 OUTLOOK FOR THE NEXT 12 MONTHS 7 TOP AUCTION HOUSES ADAPT TO COVID-19 8 INDUSTRY CONSOLIDATION 10 THE FUTURE OF THE ONLINE ART SALES MARKET 12 TIMELINE 14 FROM EVOLUTION TO REVOLUTION? 16 ONLINE ART SALES TRENDS AND FINDINGS 18 METHODOLOGY 26 COMPANY PROFILES 27 Hiscox online art trade report 2020 1 Introduction THIS YEAR THE Will coronavirus (COVID-19) be ONLINE ART TRADE the catalyst to finally ignite a REPORT IS GOING spluttering online art market? TO BE PRESENTED It is the question all art market DIFFERENTLY; WE twitchers are asking. WILL BE PRODUCING A SHORTER VERSION I could sit here on the fence and FOLLOWED BY FURTHER find good reasons to say yes, no UPDATES DURING THE or maybe. I am going for a bold yes, YEAR, WHICH WILL hopefully not as the result of cabin ALLOW US TO BETTER fever having been locked away so TRACK DEVELOPMENTS long. The main reason is that social IN THE MARKET AND distancing is here to stay for long SHARPEN OUR FOCUS enough that it will change how ON SPECIFIC TRENDS. we buy art as well as many other things. No longer will we have the joy and pain of crowded art fairs and gallery openings. Dealers will have to find new ways to create the buzz that makes us have to buy NOW, lest we dwell and lose yet another treasure that we can’t live without. I am not sure how, but I am sure they will. As always I hope you find this report useful as we wait with baited breath to see what happens next, in the immortal words of Captain Jean-Luc Picard “Things are only impossible until they are not”. Robert Read Head of Art and Private Clients Hiscox 2 Hiscox online art trade report 2020 Key findings ONLINE SALES STALL BUT 2020 range of growth patterns; while COULD BE A PIVOTAL YEAR Heritage Auction posted a 0.5% decline in sales in 2019, online-only Online art and collectible sales auctions at Sotheby’s grew 55%. stalled in 2019 generating an We have also seen failures, with estimated $4.82 billion – up 4% Paddle8 filing for bankruptcy in from 2018. Growth in this market March 2020. has steadily declined in recent years, falling from 12.5% in CHRISTIE’S, SOTHEBY’S AND 2017 to 4% in 2019. HERITAGE PASS $1 BILLION IN ONLINE SALES However, pure online-only auction sales by Christie’s, Sotheby’s and Sales at these three auction houses Phillips generated $370 million in increased from $636 million in 2015 the first half of 20201, which was to $1.0 billion in 2019 – a 58% which was more than five-times increase (equivalent of 12.1% higher than the same period annual compounded growth). in 2019. The COVID-19 crisis has significantly The COVID-19 crisis forced the accelerated online sales, with art world into an abrupt lockdown Sotheby’s reporting a 131% increase and with little warning, online in the number of lots sold online so became the sole promotion and far this year (May 2020) and a 74% sales channel for much of the increase in average price compared industry. With the majority of to 2019. Heritage Auction reported a platforms surveyed expecting 10% increase in online sales for the the pandemic to have a positive first five months of the year. impact on the online market in the longer term, could this be BIG GALLERIES COULD EMERGE the moment the art world finally AS KEY ONLINE PLAYERS embraces digital technology? Some 63% of online platforms RAPID GROWTH IN expect existing art market operators ‘OTHER COLLECTIBLES’ such as galleries to emerge as big online players when they finally get At 32%, fine art accounted for to grips with digital technology. Over the largest share of online art and the last months we have seen many collectibles sales – some way galleries embracing technology behind watches and jewellery (23%). from online private viewing rooms to ‘Other collectibles’ such as stamps virtual reality. However, some of the and memorabilia now account big galleries, such as David Zwirner for a quarter of online sales, and and Hauser & Wirth have taken the as traditional auction houses in concept of online gallery platforms particular look to attract younger to another level, by offering smaller collectors, we expect to see a galleries and art fairs the opportunity greater focus on this segment. to exhibit and sell utilising their technology platforms, and basically A MARKET ON DIFFERENT turning these major galleries into GROWTH PATHS third-party online sales platforms. 1 Period: from 1 January 2020 Online platforms display a broad to 28 June 2020. Hiscox online art trade report 2020 3 COULD THIS BE THE CONSOLIDATION AND MOMENT THE ART CONVERGENCE WORLD FINALLY EMBRACES DIGITAL A large majority (67%) of platforms TECHNOLOGY? think the online art market will be dominated by a few global players within the next five years. While the ten biggest platforms globally account for approximately 68% of the total online market, some of those surveyed (48%) think disruption from an outsider is a real possibility. The tougher market conditions imposed by COVID-19 could speed potential consolidation up, or even trigger an acquisition spree among the stronger players, including traditional auction houses keen on building a stronger online presence. 4% online sales growth in 2019, but COVID-19 has been rapidly driving sales online. 63% of online platforms expect major galleries to emerge as big online players. 48% of online platforms believe disruption from an art market ‘outsider’ is very likely in the next five years. 4 Hiscox online art trade report 2020 Online art sales The online art and collectibles Sotheby’s saw positive online market showed subdued growth at sales growth, particularly in the 4% in 2019, but this could quickly online-only segment. Secondly, change as the art world is forced and more importantly, a stubborn to transact more online. reluctance from much of the commercial art world to properly Last year, online art market sales embrace the digital realm and the came in at an estimated $4.82 billion, opportunities it has to offer, has up 4% from $4.64 billion in 2018. contributed to the lack of overall Since 2015, we have seen market growth in online sales last year. growth rates on a steady decline, with online sales dropping from With the global art world in 24.1% in 2015 to 9.8% in 2018. lockdown at the time of writing however, and with everything from The decline in growth comes on museum exhibitions to art fairs and the back of several factors. Firstly, auctions either closed, postponed the global art market slowdown or cancelled, the art industry has in sales last year, with a 20% fall migrated online, giving rise to a in the value of auction sales for wide and innovative range of online Sotheby’s, Christie’s and Phillips. initiatives. It’s highly unlikely the Data from the Art Basel Art Market art world will revert entirely back Report 2020 tells a similar story, to the old as we emerge from the suggesting global art sales fell 5% crisis. Social distancing has forced over the same period. However, a new form of online engagement as our readers will see in this which might forever alter the way report, despite a decline in overall the art market, and its stakeholders, auction sales, both Christie’s and approach their digital presence. Online art sales ($ million) 4,819 4,636 4,221 3,753 3,274 2,636 1,507 2013 2014 2015 2016 2017 2018 2019 Methodology: this year’s global online estimate is based on publicly available sales figures, as well as sales estimates collected from a survey of the main online art and collectible sales platforms that are mentioned in the appendix of this report. These online art sales platforms do not represent the entire population of online art and collectible sales businesses, and therefore our estimates are likely to be on the conservative side. Hiscox online art trade report 2020 5 Online art sales growth and breakdown Online art sales growth Online art sales growth year-on-year (%) year-on-year (%) 24.2 14.6 12.5 9.8 ? 4.0 2015 2016 2017 2018 2019 2020 Breakdown of 2019 online art sales by Breakdown of 2019 online art sales by category (%) category (%) 8 12 32 Fine art 23 Other collectibles Jewellery and watches 25 Decorative arts Furniture Fine art accounted for 32% of (an average of 51% across all three online art and collectible sales houses) in 2019. This is significantly in 2019, with strong growth in more than other categories, ‘other collectibles’. including watches and jewellery (25%), ‘other collectibles’ (15%) At an estimated 32%, fine decorative arts (8%) and furniture art accounted for the largest (2%). As a comparison, Heritage share of online sales from the Auction, the world’s largest auction platforms surveyed although house for online sales, derived ‘other collectibles’ (such as more than 90% of its online sales coins, stamps, rare books, in 2019 from ‘other collectibles’ maps and memorabilia) now with only a small portion (3%) accounts for a quarter.
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