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The Art Market Adjusts: How the art world is quickly adopting the use of virtual viewing rooms

26 March 2020

The Art Market Adjusts: How the art world is quickly adopting the use of virtual viewing rooms

Kim: The coronavirus is forcing a lot of the art world to go digital very quickly. Has this been in the works for fairs, galleries, and auction houses for a while or are they having to quickly build-out their digital infrastructure?

Kamal: Digital platforms have certainly been on the mind of fair organizers, dealers, and auction houses for many years, but they have mainly focused on using digital for marketing efforts, primarily through email and social channels like Instagram. But the impact of COVID-19 has certainty fast-tracked the process of deploying online viewing rooms at scale. Art Basel Hong Kong was the first major international art fair to cancel because of the coronavirus. While the fair had been developing their online viewing room platform before announcing the cancellation of the fair, they had to push up the release to make Art Basel Hong Kong an online-only fair. Frieze cancelled its New York edition for May 2020 and is also now working on its version of an online viewing room, while mega galleries such as David Zwirner and Gagosian launched their own hosted online viewing rooms in 2017 and 2018, respectively. Auction houses like Sotheby’s have also been hosting online-only auctions for several years; for 2019, Sotheby’s reported $250 million in online auction sales.

Kim: Are collectors and museums open to buying online sight unseen, meaning without seeing an artwork in person? If not, what can be done to encourage this new way of buying?

Kamal: The short answer is yes, but with certain limits. Private collectors have for years been purchasing high-priced artworks by artists whose work they know well and have seen in-person, via images included in PDFs or JPEG files sent directly from trusted dealers, advisors, and auction specialists. For museum acquisitions, on the other hand, curators will almost always have to see the work in-person as their acquisition process can be arduous and often requires board or trustee approvals.

Data from the recently published 2020 Art Basel and UBS Global Art Market Report shows that total art market sales for 2019 were estimated at $64.1 billion, with online sales estimated at just $5.9 billion, a 2% decline from 2018, but still about double of what it was in 2013 at $3.1 billion. Dealers, specifically, reported that they made only 5% of their sales online in 2019, yet 67% of them expected their online sales to increase over the next five years.

While online buying is only a small fraction of the overall dealer market, it’s important to note that 57% of dealer online sales were to new buyers who had never been to the gallery or met the dealer in person. This is a critical point to appreciate as to why dealers, fairs, and auction houses are all investing in online viewing rooms, given that the need to find new clients is the number one priority for all three of these sectors.

Now with a major fair like Art Basel Hong Kong hosting its first fully online-only fair, we may see a change in collector habits. Early reporting on the fair says that the mega-galleries sold artworks priced at $1+ million, which is not surprising given that they are offering works by blue-chip artists. Yet smaller and mid-size galleries that are featuring works by artists less familiar to collectors are not selling as much. Also, collectors may be holding onto funds generally put towards acquisitions given last week’s downturn in the equities market.

Regardless of the outcome of sales from the Art Basel Hong Kong online viewing room, it’s important to take note of the price transparency that the platform provides, as each artwork is listed with an exact price or a price range. This is important as data shows that price transparency online will result in a sale six times more than not listing the price. And for new younger collectors, price transparency has become the top requirement for them to participate in the art market.

Kim: Certain museums are embracing digital innovation during this time; some are posting on social media walkthroughs of current exhibitions. Is that an option for fairs or galleries?

Kamal: That’s correct, museums all over the world are using the hashtags #MuseumFromHome and #MuseumMomentofZen to continue to engage their audience at sizable numbers. My old colleagues at the National Gallery of Art in Washington, D.C. got creative very quickly and photographed galleries and recorded videos of curators giving brief talks to create daily online tours.

But this is not an option for fairs as they are held annually, many in temporary structures that are constructed and deconstructed over several weeks and are extremely costly to build, like the Frieze tents used for all four of its fairs.

If in a few months we get back to some level of normality and local traffic restrictions ease, I can envision a scenario where dealers – especially those without their own a hosted online viewing room – install exhibitions in their galleries as they normally would, and instead of hosting openings and events at the gallery, put the funds towards producing high-quality video content, paired with high-resolution images of the exhibition and individual artworks. Gagosian is already doing this and has produced strong video content that allows them to really ‘curate’ the close-looking of an artwork through creative camera movements, as well as providing interesting audio commentary overlaid on the video.

In addition, dealers can step outside the curated gallery space and digitally take their audience into the artist’s studio with video, and eventually, with virtual and augmented reality technologies as they become used more broadly. I don’t think many artists prefer to have their work seen in digital formats, but going into the studio via a digital platform allows an artist to explain their process at its place of origin. I know this is something that will resonate with collectors having hosted many events at artist studios.

Kim: Incredible efforts go into planning an art fair; will the fairs be able to capitalize on this disruption or will online viewing rooms discourage people from physically attending art fairs in the future?

Kamal: I believe online viewing rooms will be a positive additional tool for art fairs as well as galleries, but they won’t ultimately replace the experience of seeing art in person, whether at a fair, gallery or a museum.

The art world is well known to be an industry made up of very sociable people and driven by events and close personal relationships. Art fairs, just as gallery openings, are as much an opportunity for collectors and museums to purchase art as they are for curators to research and discuss upcoming exhibitions and biennials, meet artists in person, visit the art scene in whichever city the fair is held, or simply to catch up with colleagues and friends that are located in various parts of the globe.

Kim: As we see an increase in creative responses during this pandemic, are you seeing more innovative initiates and new technologies to help collectors purchase art through an online viewing room?

Kamal: Right now we are still largely limited to high-resolution images and video, but just like the Art Basel Hong Kong online viewing rooms, entrepreneurs are working to push up the release date of new technologies. Oliver Miro, son of prominent dealer Victoria Miro, has for the last three years been developing an app using virtual and augmented reality technology to build custom exhibitions by creating a virtual scan of gallery’s existing brick-and-mortar space. The exhibitions would be published to two separate apps: Vortic Collectors (for buyers) and Vortic VR (for anyone with a VR headset). The app is set to launch next month with a joint exhibition of artists on the rosters of David Zwirner and Victoria Miro galleries.

However, the new coronavirus reality is still very fresh for a lot of communities, so most are ‘sheltering-in-place’. Outside of the Art Basel Hong Kong online viewing room and a few new online-only gallery exhibitions, I think most dealers recognize that it’s not the time to be aggressively selling art, at least until we see some stabilization of the markets and as we ‘flatten the curve’ to control the spread of the virus.

That said, many are questioning specific models and systems of the art world as this is the first stress test on the industry since the 2008 financial crisis, which brought an art market low of $39.5 billion in total sales value in 2009. One model I’m most curious about is taken from the rapid expansion and popularity of co-working spaces. As foot traffic to brick-and-mortar gallery spaces has fallen because galleries are now conducting 45% of their annual sales at fairs, I can imagine co-working spaces specific for galleries that provide space for private offices, storage, private viewing rooms, and a rotating short-term exhibition hall.

One such space has been in the works in London for some time, called Cromwell Place, set to open in May 2020. At a fee of just £5,500 per annum for a single member, this would be a very affordable option for young galleries to build their programs yet still have the opportunity to mount live exhibitions and interact in-person with collectors and curators, all while limiting their overhead costs.

Kim: To conclude, do you see any positive outcomes that may come from this difficult time once things go back to normal?

Kamal: As we briefly discussed earlier, I think ingenuity prospers in challenging times and new initiatives and tools will develop on all fronts – from art fairs and galleries, to auction houses and museums. Artists resigned to their studios will take a deeper dive into their practice, new realities will engender new technologies to be developed, [hopefully] more dollars will go to supporting local and regional museums, nonprofits, and galleries, and a greater sense of community will develop as more institutions and individuals will look to partner by sharing resources, tools, and ideas.

We are already seeing such community efforts at various levels and sectors of the art world: New Art Dealers Alliance is leading on a petition to acquire relief from the City of New York for the city’s art galleries, artists, and art workers; the Mellon Foundation joined with several other foundations in developing a $75-million fund to support New York City-based social services and arts and cultural organizations affected by COVID-19; and here in San Francisco, an Arts Relief Program funded by $2.5-million from the City was recently announced, offering grants and low-interest loans to artists and small-to-mid sized arts and cultural organizations.

There is no denying that the short- to medium-term will be difficult for the art world, and the entire ecosystem will need support to ride out this difficult wave. But if we stay focused on the work, and follow the health guidelines, the virus will subside and we will learn from this experience, and hopefully, adapt with more sustainable systems.


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