Million-dollar Warhol
July 13, 2011
On Wednesday, a work from Andy Warhol's "Flowers" series with an estimated value of over $1.1 million (800,000 euros) goes up for auction. But bidders won't be traveling to London or New York to raise their hands in a lofty auction house and they won't hear the sound of the auctioneer's gavel slamming down in the end. Instead, they will sit in front of their computers and place their bids with a simple mouse click. For the first time, such a highly priced piece of art will be sold exclusively on the Internet, by the online auction firm Artnet.
Companies like Artnet are now taking one of the last offline domains - premium art sales - into cyberspace. They operate similarly to eBay: Artnet provides a platform for transactions, but once an object is sold, it is shipped directly from the seller to the buyer, Artnet founder and CEO Hans Neuendorf explained.
"But we don't leave our customers alone like eBay does. It merely connects sellers and buyers. We advise our customers and we use experts to assess the authenticity and the value of the items on sale," Neuendorf told Deutsche Welle.
According to him, this ensures a high level of quality and security for buyers. "This is the only way to go in art selling," Neuendorf added.
Quicker, cheaper and more efficient
Artnet claim they can accelerate transactions in the art market and reduce the costs for the parties involved. Because they do not need to rent exhibition space and save on transport costs they are able to charge their customers less, said Neuendorf.
"On average, we charge half as much in commissions as conventional auctioneers. We can complete an auction from start to finish, including payment and transport, in five weeks, where auction houses usually take five to six months," explained the Artnet founder.
According to Neuendorf, his company makes the business more transparent and accessible for those new to the art scene. One in five Artnet buyers is a first-time customer, said Hans Neuendorf. The majority of works sold through the website are not famous masterpieces, but fall into a low to middle price range, with the average piece selling for $7,000 (5,000 euros).
And their business is growing - in the past year by 140 percent, and in the first quarter of 2011 by another 50 Percent.
Before they launched their auction platform, the Berlin-based company had been renowned mainly for its core business, a price database. It is the largest archive of fine art auction results worldwide. Collectors can access information from around 500 auction houses, dating back as far as 1985. Artnet also operates a gallery network that connects more than 2,000 art galleries and lists about 166,000 artworks.
Online auctions hold risks
However, not everyone is enthusiastic about online art auctions. Helmut Krause, president of the German Federal Association of Art Experts, told Deutsche Welle that they presented high risks for customers.
"They only see a photo of the object they are buying. And Artnet does not have the artwork on their premises; it stays with the seller who sells it through the website," he said.
Unlike Artnet, traditional auction houses put items on display before they are auctioned off. Art expert Helmut Krause said this was important for customers to verify an item's authenticity.
"You can go there, take an expert along. You can look at every detail of a picture and take it off the wall. You can even use special equipment, such as quartz iodine lamps, to thoroughly inspect a painting before you purchase it," Krause explained.
Buyers rely on photos
But when it comes to forking out hundreds of thousands of euros, will collectors really content themselves with only looking at photos of a painting? Yes, says Hans Neuendorf: "Most people are of course familiar with the objects they are purchasing. Believe me; someone who is buying a Warhol has seen many Warhols before."
Helmut Krause disagreed. "A collector who is looking for first class products will go to Artnet only to get information from their database, but will not enter their auction system. Those collectors would travel anywhere to look at a painting before they buy it," he said.
Will online art auctions take over?
Artnet had made a first attempt at online auctions when the company went public in 1999, and it flopped. Back then, the Internet was not as wide-spread and, in order to attract business, Artnet had to run traditional ads in print media.
"Today we only advertise on the web. We managed to reduce our costs and now we have much better prospects to succeed. We were simply a few years ahead of our time," Hans Neuendorf explained.
However, according to Neuendorf, traditional auction houses such as Sotheby's and Christie's will not have to fear for their business. "We are not getting in the way of the big auction houses. We simply believe that the number and the speed of transactions will increase and the market will therefore become more transparent," he added.
Whether the art scene is ready for up-market online auctions will become evident in a week's time when bidding on Warhol's "Flowers" closes. As a vanguard in the art world, Andy Warhol would probably have liked the idea of online art auctions.
Author: Gönna Ketels
Editor: Kate Bowen