New York’s Artsy Is Making It Even Easier to Buy Art Online
(Bloomberg) -- Art galleries have long used splashy openings to build buzz around a new talent or an existing artist’s latest work. The in-crowd sips wine, pontificates about the paintings and schmoozes with the artist. Now even this ritual is going digital. Artsy, a web marketplace for art, photography and design, is hosting the online equivalent of openings on its site.
New exhibition “spaces” will enable galleries to curate and sell their wares—a collection of portraits by their stable of artists, say, or a solo show of new work. Burdened with skyrocketing rents and escalating business costs, many galleries that were initially wary of Artsy are acknowledging the potential benefits of its reach. On average each month, the site attracts 2.5 million visitors who buy some $20 million of art. Artsy hosts more than 84 online-exclusive shows put on by galleries from New York to Tbilisi.
Over the past nine years the New York startup has become one of the top destinations for buying, viewing and learning about art. It has pulled off this feat by partnering with galleries and auction houses, rather than directly competing with them. The site features 800,000 images of art, architecture and design from more than 2,000 galleries representing 80,000 artists around the world.
Praxis, a gallery with locations in Buenos Aires and New York, has been marketing original Latin American paintings on Artsy for several years. Like many of its counterparts, Praxis long resisted posting prices online, which is still considered gauche in the art world. Instead, customers had to contact Praxis and close the deal the old-fashioned way.
But the company recently decided to open a separate Artsy gallery offering limited-edition silkscreen prints. This time the prices are listed, and customers can buy directly from the site. Justina Gomez Romero, a Praxis representative in New York, says sales have surged. “When a person goes to Artsy,” she says, “they already know they're shopping.”
Carter Cleveland, 31, and Sebastian Cwilich, 43, founded Artsy in 2009 with a mission to make art as ubiquitous as music and accessible to anyone with an internet connection. Cleveland is a Princeton-educated computer scientist with a penchant for artificial intelligence whose father is an art writer; Cwilich studied math at Columbia University and was a former executive at Christie's.
Their bonafides helped them raise more than $100 million from a range of tech and art world luminaries, including Larry Gagosian (who owns the renowned Gagosian Gallery), Wendi Murdoch (collector-film producer), Jack Dorsey (Twitter-Square chief) and Eric Schmidt (of Google fame). The company is valued at $275 million, according to Pitchbook and media reports. Artsy declined to say if it’s profitable.
Artsy helps customers develop their own taste in a Spotify-meets-Facebook kind of way, showing them works based on what they’ve liked and followed. Along with other startups with names like 1stdibs, Invaluable, Paddle8 and Artspace, Artsy has helped democratize an opaque marketplace that traditionally has catered mostly to wealthy sophisticates.
In 2016, the most recent year for which numbers are available, online art sales reached $3.75 billion, according to Hiscox Online Art Trade Report. While that’s still less than 10 percent of the global art market, web art sales grew 15 percent over the previous year and double the rate of 2013.
“Once people have the time and space to think about culture and art, it becomes part of a larger trend in consumption,” says Cleveland, Artsy’s chief executive officer. “In the same way you want to know where your food comes from, instead of buying a poster or a mass-produced print that's destined for a landfill, more and more people are buying something that can stand the test of time.”
For Artsy, the gallery offering is another step in its commercialization and domination of the online art market. Galleries pay Artsy a monthly subscription fee of $425 to $1,000 to host their works. Artsy also charges a commission for works sold at auction. Last year, the company hosted 190 auctions and plans to host 400 in 2018.
Artsy also publishes a magazine that was the fastest-growing online art publication in 2016, according to the Hiscox report. It features articles on the thriving art of Ikebana or when to buy from either an auction house or a gallery and how an artist-scientist revealed the inner workings of the brain. The publication generates advertising revenue from such luxury brands as BMW and Gucci.
The latest gallery feature is emblematic of Artsy's partnership model, letting galleries do what they do best and giving them the digital tools to do so. Artsy’s technology makes purchasing art through the site easy for the customer and the gallery, according to Praxis. “The process for uploading works of art can be tedious; they made it easy,” Gomez Romero says, who adds that interactions between clients and galleries is also seamless.
While Artsy has managed to help drag the centuries-old market into the 21st century, most galleries will for the foreseeable future maintain a brick-and-mortar presence, despite the cost of doing so. To a degree, gallery owners have no choice because major art fairs typically won’t accept their art without a shopfront, although that too is changing.
One day, “online galleries might become a sales channel that allows galleries to think about their physical space in different way,’’ says Anders Petterson, who runs ArtTactic, a London advisory and research firm. “Maybe galleries aren’t so keen on it, but from a consumer point of view, this is the only way this can work.”
©2018 Bloomberg L.P.