by Adrienn Földi
We have learned from the archaeologists and the historians how old the Art was. Paying for an artwork can be as old as the Art itself. We do not know exactly. Most likely, it is much older than the first historical sites where the ancient people settled down. We know how wide the ancient commerce was, how many different products, work or home tools, nice pieces as pieces of jewelry were already traded a long time ago. Thus, people have been spending money on artwork for centuries and centuries. Nevertheless, it was not a long time ago when it started measuring the value that the people spent on art.
The Global Market Size
The global art market size was between 56 and 68 billion USD in the 2010s. Then the COVID-19 came and it caused a market value drop of 22% in 2020. It is very disappointing, especially if you are an artist who tries to survive during the pandemic time. However, this decline is not unique. In 2009 the global crisis resulted in a decrease of more than 30% in the global art market value. Then, one year later the market recovered. Two years later it overachieved the sales performance that had been before the global crisis. These numbers show us how deeply the global art market depends on the global macroeconomic situation. Cruelly saying, the art is not essential to many of us. It is the first spending that we save when we are in financial trouble. As the confidence in our financial stability increases, we start buying artworks again.
In the last decade, we changed where we buy artworks. As we live in the online world much more than before, we tend to purchase artwork on the internet, too. Although the traditional sales channels like galleries, fairs, auctions are still very big, digitalization has provided great new sales channels for the artists. Especially during the Pandemic. The online sales value doubled between 2013 and 2019. Then, 2020 was an incredible turning point for the online art market. Its size doubled again in 2020 over the previous year. The auction houses and art fairs boosted their digital presence by streaming auctions, events, and by special solutions like Online Viewing Rooms (3D digital reproductions of artworks). It is so much visible how digitalization and the new technologies play important role in the art market.
Investment Funds and Crowdfunding
In a crisis, collectors see also opportunities – buying an artwork cheaper than its market value can be a great investment. We have seen lately also investment funds playing this card. One important player is Masterworks an art investment platform — with specifically identified assets — that allows anyone to allocate as little as $10,000 to art. Their portfolio has over $200 million in art under management and an acquisitions budget of $300 million for 2021. As of December 2019, they raised between $10 to $15 million, with a tremendous amount of growth for 2020. Of course in this scheme, one cannot enjoy the art piece on the wall. As with every investment, there’s still risk involved, so to hedge it, expert advisors and portfolio managers with backgrounds in the worlds of both art and finance have to be involved.
Another way for an artist to gather funds is via Crowdfunding platforms like Kickstarter or IndieGoGo.While having art-related options, this approach again requires a bit of marketing knowledge on how to present the project appealingly.
Here at HINSA. we will soon open a platform, where you can support projects of artists and become a Patron. We also have created our own Patreon account, if you prefer to support us through it for our videos on artists on YouTube where you can safely support us in our trial to support artists, educate them. We aim to bring art much closer to a wider public of people, who are not collectors, specialists or professionals, but simply enjoy a bit of art in their lives.