The Disease of Buying Art

"One art adviser who works at the top of the market says that a collector is “like a diseased human being ... these people love to buy, and they love to buy art. The process is a very deep-seated urge. This idea of hunting and gathering—it’s not a new one.”

This is a quote from the article " Why is Art So Damned Expensive?" by Blake Gopnik in the Daily Beast. It is an insightful look at the top-end buyers of the art market. Gopnik discusses what motivates the super wealthy to spend vast amounts of money for art. According to Gopnik there are five reasons why, in a down economy, sales of high-end art is up 34% from 2010. It is a fascinating read.

This look into the motives of the 1% top art buyers also gives insight into our own customers and may help us better understand our clients. Below are my thoughts on the article and how the five reasons listed can factor into my dealing with the economy and my collectors:

• The Prestige Factor

Art and prestige are natural partners. The very idea of being an art collector gives status to spending. It gives the impression that we are using our money for something loftier than a big flat screen TV or a luxury car. Art gives the image of culture, supporting an artist with a purchase is another way to patronize the arts and the art itself enriches the collectors life. Catering to the prestige element is why some galleries have stayed successful. Even museums have added prestigious exhibitions to their yearly calendars. The art reception for these events is a coveted ticket where collectors and corporations want to be seen buying high-priced art. Buying online will never have that kind of prestige factor and maybe the price points you and I buy and sell at are not in the same arena but I still contend that keeping the purchase of art in respected surroundings is important to maintaining that "Prestige Factor."

• Dollars Are Easier to Measure Than Beauty

Recently there was a discussion online about ignoring the "never lower your prices" rule. After reading this article in The Daily Beast, I am even more convinced that lowering prices to stimulate sales is a bad idea. Since collectors buy what they love and price is rarely an issue, I am not sure what is to be gained by lowering your prices? It is doubtful that a collector will buy a painting they like less than another because of a few hundred dollars in price. Discounts only lead to more discounts. I learned this simple rule working retail. Unless you want to get caught in a downward spiral of pricing (just look at retail for Black Friday; sales up but profits down) don't lower your prices. Art should be bought for art’s sake but there is no denying that collectors love it when the value of their art purchases rise. The price of your work is how a collector measures value. If a work of art is perceived to be worth less, won't a collector look at that work differently. Is it an advantage for art to be a bargain item like a discounted sweater in a pile of discounted merchandise? The act of lowering one piece of art cheapens all the others. If a buyer can get a bargain rate on one work of art, why not all? It is bad for you and every artist if even one decides to reduce prices.

• The Thrill of the Hunt

Gopnik brings up an interesting point. It isn't fun to hunt if there is no game. He concludes that with so few old masters available, collectors have turned to contemporary artists and specifically modern art. Why is it exciting to sit in a gallery and have the salesperson bring treasures from the back room only for you to see? Because everyone loves the thrill of the hunt and finding a treasure before anyone else, satisfies our hunters heart. But flooding the market with your work will also damage your brand. Diamonds are one of the most valued stones in the world even though they are also one of the most abundant. The idea that they are rare is only our perception which is controlled by a handful of supplies who keep tight control of distribution. This sounds vaguely like the art dealers who sell high-end art. Distribution is key. If the market has a glut of anything, the perceived value is diminished. During tough economic times some artists think that more is better and will throw more work out there hoping for sales. Again, this is self-defeating and will only continue to cheapen the brand. I would suggest that if the work isn't selling, pull it out of circulation and replace it with new work. Perhaps in a year or two these pieces will again be in demand.

• New Money Skews the Market

According to this article, high-end art is up 34% over 2010. Yes, he is talking about Eli Broad caliber collectors here. So while the high-end of the art market is enjoying a surge, the opposite problem is plaguing mid-priced and emerging artists. Very wealthy buyers are spending more than ever while the rest of us are experiencing a shrinking market. Fewer sales of homes means less walls to cover, less sales, fewer galleries, well you get the idea. In addition, as more and more of the baby boomers retire and pursue an alternative art career, more mid-level (some would say low-level) art appears on the market causing an unwanted glut of merchandise. I won't get into a cause and effect discussion here. Let's just agree that since most people have less disposable income there are less sales in art for the average artist. The circumstances are in place to eliminate a bunch of artists from the herd. In the long run, this may not be a bad thing but short term, it will be painful for some artists who find their work out of favor.

• The High Price of Patronage
  

I can't make this stuff up so please read this section of the article. The High Price of Patronage

This paragraph expresses the amazing excess that is lavished on art but also confirms an emotional investment by the patron as well. It implies that once purchased, the art is too precious to just sell for a profit. All collectors are emotionally invested in the art they buy, irregardless of the price. It is that emotion which triggers the purchase. Without it, you can't give your art away.

In closing, I want to say that I am sympathetic to artists who are finding themselves having financial difficulties. Everyone is scrambling for different solutions to capture the attention of a reduced market. Just remember that the basic nature of collectors hasn't changed. Buyers still purchase art for the same reasons. It is just that now there are fewer buyers and finding them is more difficult.