COVID shakes up the art market

For art expert Dirk Boll, the art market is on the verge of a "turning point." He told DW that the COVID-19 crisis had had a "catalytic effect" in transforming the tradition-bound industry, with digitalization moving "at turbo speed."

Boll is an art historian and one of four presidents, who with managing director Guillaume Cerutti, head the London auction house Christie's.

Boll recently published a book in German on economic crises and new art markets, in which he analysed the impact of recent economic crises on the art market. With a view of the ongoing COVID-19 pandemic, his book is titled, Was ist diesmal anders? ('What's different this time?').

It was already evident after the first lockdown in spring 2020 that COVID had the art world in its grip, as shown, for example, by the mid-year survey of 795 galleries from around 60 countries.

Conducted by Art Basel and the Swiss bank UBS, the study revealed that gallery sales worldwide had shrunk by more than a third compared to 2019. The mood in the galleries was also somber: around half of those affected feared a further decline in sales.

The new lockdown is likely to fuel this pessimism even further. "The pandemic has presented the art market — and the gallery sector in particular — with some of its greatest challenges," the study's director, Irish art economist Clare McAndrew concluded.

Unabated demand for art

The auction market has also suffered, and continues to suffer from the pandemic, albeit to a lesser extent. According to calculations by the French online portal ArtMarket.com, Less than one-fifth of artworks went under the hammer in the auction houses compared to the previous year. Sales even slumped by almost half until August.

"The auction houses have succeeded in continuing their activity to a large extent," ArtMarket.com managing director Thierry Ehrmann stated on its website. He also said art market prices had "by no means systematically" fallen, as evidenced, for example, by the sale of Giorgio de Chirico's painting Il pomeriggio di Arianna (1913) for $15.9 million (approximately 13 million euros) at Sotheby's in New York on October 29, 2020. In fact, he said, demand for masterpieces continued unabated.

So, what does the pandemic mean for the art market? While many art fairs, auctions and exhibitions were canceled because of the lockdown in spring this year, a new start seemed a long way off even in autumn. The end of major art events hit dealers hard, because for many traders, fairs are the most important sales platforms. The industry thus shifted its trading hub to the internet as far as possible. Online galleries sprang up like mushrooms. Art fairs such as Art Basel and Art Cologne opened "online viewing rooms," to varying degrees of success. Boll explained that those who were already big were also able to invest in new technology faster and on a larger scale.

Online art trade booming

Art buyers and collectors were also contributing towards making the offer more conservative, according to art expert Boll. At digital fair appearances and in online viewing rooms, newer and lesser-known players were having a harder time making themselves visible. As Kristian Jarmuschek , chairman of the Federal Association of German Galleries (BVDG), put it in an interview with DW, "Well-known artists benefit because brands sell better, as we all know!" The losers are smaller galleries that don't yet have any artist brands on offer, but instead do basic work, like devoting themselves to the development ofyounger and unknown artists.

Before the crisis, the internet was mainly used as a showcase for art. Sales were negligible: of the $64.1 billion in global art market sales last year, according to Artmarket, the online sector accounted for 10%. But in the first quarter of 2020, that share skyrocketed to 37%. The digital market has already departed from its niche status and become a serious contender, at least in the auction trade. "We expect to sell about half of all our objects via online-only auctions in 2021," Boll said, adding that auction houses had already significantly raised the value thresholds of their sold objects, which he saw as a sign of buyers' growing confidence in digital art sales.

With the new lockdown, some dealers' hopes for 2021 could evaporate. After all, at mid-year, half of the galleries surveyed were still expecting sales to rise in the new year. Meanwhile, Germany's gallery owners currently have little reason to complain, the BVDG's Jarmuschek reiterated.

No gallery has yet had to close due to COVID. Rather, he said, the lockdown has benefited traditional gallery work. "We can make time for our customers, who in turn have more time for art."

Adapted from German by Brenda Haas.