Despite a decline in the global art market, more YPO members, including leaders of auction houses, museums and art collectors, continue to engage with art — often driven by a personal passion and appreciation for beautiful objects. From established and growing artistic hubs across Asia, Europe, the Middle East and the United States, these leaders involved in the international art scene share insights on the latest trends, innovations and significance of art to them and the wider community.
Challenging times — but not everywhere
Business books often focus on the art of business; the art business, meanwhile, has garnered less attention, especially with the recent slowdown in the global trade in art.
The global art market remains significant, but it has declined since it peaked in 2014, according to the “TEFAF Art Market Report 2016.” Total sales in 2015 of USD63.8 billion is 7 percent lower than the high of USD68.2 billion just one year earlier. While this marked the first year of decline since 2011, most experts predicted this slowdown in sales following a decade of record growth.
In the Middle East, for example, Christie’s in Dubai, United Arab Emirates, experienced a rapidly emerging art market when it opened in 2005 for local and global clients, says Michael Jeha, YPO member and Managing Director of Christie’s Dubai Ltd. “In the region, Christie’s has sold more than USD400 million worth of art, jewelry and watches,” he says. “While the regional market continues to mature with more international collectors buying Middle Eastern art, we have seen a softening of sales globally in 2016, and it has become harder to maintain continued growth in a supply-limited art market and amid a global economic slowdown.”
Leading the decline in global sales is the Chinese market, which experienced a sharp drop in sales of 23 percent in 2015. In contrast, the U.S. art market continues to grow in 2016, increasing by 4 percent over 2015 and is expected to reach a record sales total of USD27.3 billion, reconfirming its global leadership position with a market share of 43 percent.
For YPO Art Network Chair and Aspen Art Museum CEO Heidi Zuckerman, business is good at the institution’s Colorado, USA, location. “In Aspen, we not only have a cosmopolitan audience and feature art from around the world but, in addition, we have not been negatively affected by the global economic decline,” she says. “We recently raised USD2.5 million dollars in donations at our annual fundraiser, surpassing our target.” The unique architecture of the Aspen Art Museum — built two years ago by 2014 Pritzker Prize for Architecture winner Shigeru Ban — cost USD75 million and continues to attract media attention along with the cutting-edge art the museum regularly showcases.
Rise of online and digital innovations
One fast-growing section of the art market is online sales. Conservative estimates in the “TEFAF Art Market Report 2016” indicate online art sales reached USD4.7 billion in 2015, a 7 percent increase over the previous year and accounting for 7 percent of the value of all global art and antiques sales.
Deloitte’s “Art and Finance 2016 Report” confirms the increasing confidence in technology and online art businesses and their role in the art market evolution. According to Deloitte, the majority of art professionals (73 percent) and art collectors (69 percent) believe online art businesses will play an important role in the art market in the next two to three years, with art information and education seen as areas where online business and technology could have a significant impact.
“At Christie’s, we have definitely seen more online participation over the last few years, particularly with the younger audience, and we now have sold works worth over USD1 million in value online (as individual items),” Jeha says, adding that online sales complement but are unlikely to replace traditional auction sales for higher-end items.
Zuckerman agrees that online sales have limitations: “For high-priced art and new works, people still want to be around the aura of art and see it in person. But lower-priced categories can do well online.” Technology and the virtual world is not only affecting art in terms of sales. In Lausanne, Switzerland, YPO member Tatyana Franck, Director at the Musée de l’Elysée, is experimenting with digital innovations. “The Memory of the Future: Photographic Dialogues between Past, Present and Future” is the first exhibition she has created using 3-D technology. Franck says its intent is to “open up a dialogue between the work of the pioneers of photographic techniques (the past), those of contemporary artists that breathe new life into these skills (the present) and avant-garde technologies that update these early processes (the future).”
This is the first time the museum is dedicating space to present digitized virtual objects from its collections. “This innovative project aims to introduce new collaborative and interactive experiences using the museum’s collections to a wide range of audiences — whether they be photography enthusiasts, curators or researchers,” Franck says. “It makes it possible to look at the works in 3-D with unprecedented precision.”
The democratization of art
Art’s accessibility today is challenging the notion that it belongs only to the rich. While the “ultra-high” end segment (prices of more than USD10 million) of the art market continues to account for 28 percent of total sales values despite representing a small fraction (0.1 percent) of overall transactions, Zuckerman, along with many industry leaders, believes that “art can be for anyone even though not for everyone.” Free admission and programs at the museum have helped serve a broad-based audience, including tourists, students and other members of the community.
For YPO member Will Ramsay, making art more accessible has been a personal mission for more than 20 years. Considered a global pioneer in expanding the field of art, Ramsay, as CEO of Affordable Art Fair Ltd., brings together artists, dealers, collectors, curators, critics, patrons of galleries and other advocates of the visual arts while encouraging new ideas, projects, relationships and collaborations.
Ramsay started his own gallery, Will’s Art Warehouse, in southwest London, England, UK, 20 years ago to “bridge the public’s increasing interest in contemporary art and London’s highbrow gallery scene.” Three years later, seeing a growing demand for affordable prices, ease of buying and a user-friendly approach, he started affordable art fairs. Today, the company organizes 17 art fairs annually around the world, which are regarded as a global phenomenon in the art industry.
Each fair is typically a five-day event, which features 100 galleries and attracts about 20,000 visitors. While growth slowed in China and Asia in general, the fairs are going strong in Europe and the United States where there is solid demand. “We have 250,000 physical visitors to our fairs and 1 million to our website every year, so I am very optimistic about the online trend to further expand our reach and make art even more accessible and affordable,” adds Ramsay.
Investing in art: The bigger picture
While some YPO members in the growing YPO Art Network use art as a financial investment vehicle, the risks and challenges of the art investment fund industry are substantial, and most members — as with art collectors and enthusiasts in general — buy art for aesthetic reasons. According to the Deloitte report, the hurdles to incorporating art investment fund products in a wealth management offering include issues related to due diligence, valuation, lack of liquidity and an unregulated marketplace.
For YPO member Bobby Wong, Chairman and Director of Anika Insurance Brokers, art was always an interest, but he only found time to pursue collecting later in his career. “Art satisfies me in so many ways. It draws a side of me to appreciate the beauty of the world around us. It forces and enables me to stop momentarily in my drive to survive in this world and pay attention to something that is beautifully crafted,” Wong says. “Another reason why I like art is the conversation I get to have with the artists. Works of art are a form of expressions or statements by the artists, and these are formed by their experiences in life and the journey.”
Many members display their art collections proudly in their offices to spur creativity and enhance their company’s image, while others appreciate their works privately in their homes. No matter where they are enjoyed, works of art have significance well beyond their monetary value. “My broad-based belief is that art makes the world better. The more time people spend with art, the more fulfilled they are with their lives,” Zuckerman says. “YPOers are incredibly curious people but often have to work with quantifiable, tangible facts. Art offers an opportunity to reflect on larger issue and values.”