What is the art market?
The contemporary art market is where the most recent art being produced by artist across the world is sold. The market is where art is given tangible financial value and is a now a vast global economy, largely operating in London and New York, with satellite centres in Europe and America, and increasingly in Asia and the Middle East.
The market divides into the so called `primary market’ where art is sold for the first time, and `secondary market’, where art is sold for a second and subsequent times.
The art market is global with the most influential agents within both the primary and secondary markets operating internationally. This especially includes artists – an artist can be born in one part of the world, educated in another, live and work somewhere else and be represented internationally by two or three galleries across the world. The ease of international travel and the Internet mean the market now operates through an ever expanding globalised network of established and emerging centres where artists, galleries, collectors converge for major events to do business and network in person and online.
The international art market comprises commercial galleries, artists, art dealers and agents, art fairs, art consultants and auction houses. There is also a market via so called `non-legitimised channels’, such as high street shops, open studios and regional art fairs: the so called `domestic’ market selling `non-critically engaged’ work. Outside London, Glasgow is the second international market for critically engaged contemporary art in the UK, but the infrastructure for selling critically engaged market is largely undeveloped outside London, although there is a significant market for sales of domestic work.
The art market is unregulated – the different agents within the market, be they artists, dealers, agents or auction houses all have their own protocols and these are never written down and rarely discussed, making the market a difficult place to navigate for the uninitiated!
What is meant by the `primary’ market?
The primary market is where contemporary art is sold for the first time; mostly commercial galleries which represent artists and have a direct working relationship with them.
What is meant by the `secondary’ market?
The secondary market is where a work is sold for a second or more times; e.g. auction houses and via secondary dealers.
Who are the key players in the art market?
The key agents in the art market are:
Artists are usually expected to be trained through a reputable Fine Art or related degree course (but not always), and artists produce the work that is bought and sold on the market. There are very many different types of artists but the international art market and serious collectors are concerned with those who are considered to be `critically engaged’. This means their work is collectively considered by art world professionals – academics, curators, dealers, artists – to be sufficiently relevant to the current discourse in contemporary visual theory and to the history of art to secure their endorsement through representation, exhibitions, reviews, purchases for private and public collections. This process of filtering and endorsement is sometimes referred to as `subscription’.
Commercial galleries form part of the primary market generally and are the main conduit for collectors of contemporary art. They promote the artist to the key players within the market, namely private collectors who buy work and to public institutions which give visibility and critical endorsement to artists and access to wider audiences. The job of the primary market agent is to get their artists’ work placed in the right public and private collections as this secures critical and financial value for the artists they represent and ensures their artists have the optimum chance of finding a place in the history of art. Controlling the stock of an artist and vetting purchasers is an important function of managing an artist’s career and developing their market.
As the art world becomes more event driven, so the art fair has become more important along with biennales, the auction house weeks and grand museum openings, all of which aim to attract the collector’s interest. There are currently approximately 80 fairs worldwide. The leading commercial contemporary art galleries all compete to participate in these key art fairs and increasingly, public institutions arrange their high profile exhibitions to coincide with these major events. A number of satellite art fairs showing younger, less established galleries also congregate around the international fairs, taking advantage of their pulling power in attracting international art world VIPs and collectors to town.
Auction houses are a part of the secondary market and usually trade works that are being sold on from private collectors and secondary dealers to the open market. Like primary market agents, they develop relationships with collectors, offer advice on developing a collection and organise their pre-sales viewing rooms to look like `curated’ shows. Many collectors are attracted to the opportunities to buy at auction because it is perceived to be transparent and democratic – if a collector has sufficient funds, the work is theirs! There is no convoluted, opaque vetting process, no queue. Whereas the primary market dealer’s role is to represent their artist and his/her market, the business of the auction house is more straightforward, simply to sell to the highest bidder. Collectors who cannot obtain works by a certain artist on the primary market may acquire them at auction and in the case of some artists they may be the only route to works protected by their dealers.
Art consultants provide specialist fee-paying services to collectors on what to collect and are often paid on commission on sales. A good adviser acts as a mentor encouraging the collector to explore and discover their own interests, and their relationships with galleries mean they provide reassurance and thereby access to works which, in a fiercely competitive market, would not otherwise be available to someone unknown to the gallery.
The Contemporary Art Society provides one of the UK’s leading arts consultancy services. For more information please click here.
Fine Art Graduate Shows
In recent years, art school graduate shows have been increasingly regarded as a means by which `to scout out the hottest new talent’. Students have been encouraged to become more professional and career-orientated in the presentation of their work in order to attract the attention of dealers and collectors, who in turn compete with each other to make new discoveries. Purchasing from degree shows requires discernment and specialist knowledge since buying at this early stage of an artist’s development – sometimes at expensive prices – is high risk, especially in an overheated market.