Hiscox online art trade report 2020

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Hiscox online art trade report 2020

PART ONE: THE ONLINE ART TRADE

Cover artwork: Ann Craven, Heart of Gold #1, 2009 | 11 x 8 1/2 inches, Zerox Print Edition for White Columns, 2009 | Edition #10 of 50 plus 10 APs Courtesy of the artist, Southard Reid, London and White Columns, New York

INTRODUCTION1

KEY FINDINGS

2

ONLINE ART SALES

4

ONLINE ART SALES GROWTH AND BREAKDOWN

5

OUTLOOK FOR THE NEXT 12 MONTHS

7

TOP AUCTION HOUSES ADAPT TO COVID-19

8

INDUSTRY CONSOLIDATION

10

THE FUTURE OF THE ONLINE ART SALES MARKET

12

TIMELINE14

FROM EVOLUTION TO REVOLUTION?

16

ONLINE ART SALES TRENDS AND FINDINGS

18

METHODOLOGY26

COMPANY PROFILES

27

Introduction

Hiscox online art trade report 2020

1

THIS YEAR THE

Will coronavirus (COVID-19) be

ONLINE ART TRADE

the catalyst to finally ignite a

REPORT IS GOING

spluttering online art market?

TO BE PRESENTED

It is the question all art market

DIFFERENTLY; WE

twitchers are asking.

WILL BE PRODUCING

A SHORTER VERSION I could sit here on the fence and

FOLLOWED BY FURTHER find good reasons to say yes, no

UPDATES DURING THE or maybe. I am going for a bold yes,

YEAR, WHICH WILL

hopefully not as the result of cabin

ALLOW US TO BETTER fever having been locked away so

TRACK DEVELOPMENTS long. The main reason is that social

IN THE MARKET AND

distancing is here to stay for long

SHARPEN OUR FOCUS enough that it will change how

ON SPECIFIC TRENDS. we buy art as well as many other

things. No longer will we have the

joy and pain of crowded art fairs

and gallery openings. Dealers will

have to find new ways to create the

buzz that makes us have to buy

NOW, lest we dwell and lose yet

another treasure that we can't live

without. I am not sure how, but I

am sure they will.

As always I hope you find this report useful as we wait with baited breath to see what happens next, in the immortal words of Captain Jean-Luc Picard "Things are only impossible until they are not".

Robert Read Head of Art and Private Clients Hiscox

2

Hiscox online art trade report 2020

Key findings

1Period: from 1 January 2020 to 28 June 2020.

ONLINE SALES STALL BUT 2020 range of growth patterns; while

COULD BE A PIVOTAL YEAR

Heritage Auction posted a 0.5%

decline in sales in 2019, online-only

Online art and collectible sales

auctions at Sotheby's grew 55%.

stalled in 2019 generating an

We have also seen failures, with

estimated $4.82 billion ? up 4%

Paddle8 filing for bankruptcy in

from 2018. Growth in this market March 2020.

has steadily declined in recent

years, falling from 12.5% in

CHRISTIE'S, SOTHEBY'S AND

2017 to 4% in 2019.

HERITAGE PASS $1 BILLION

IN ONLINE SALES

However, pure online-only auction

sales by Christie's, Sotheby's and Sales at these three auction houses

Phillips generated $370 million in increased from $636 million in 2015

the first half of 20201, which was

to $1.0 billion in 2019 ? a 58%

which was more than five-times

increase (equivalent of 12.1%

higher than the same period

annual compounded growth).

in 2019.

The COVID-19 crisis has significantly

The COVID-19 crisis forced the accelerated online sales, with

art world into an abrupt lockdown Sotheby's reporting a 131% increase

and with little warning, online

in the number of lots sold online so

became the sole promotion and far this year (May 2020) and a 74%

sales channel for much of the

increase in average price compared

industry. With the majority of

to 2019. Heritage Auction reported a

platforms surveyed expecting 10% increase in online sales for the

the pandemic to have a positive first five months of the year.

impact on the online market in

the longer term, could this be

BIG GALLERIES COULD EMERGE

the moment the art world finally AS KEY ONLINE PLAYERS

embraces digital technology?

Some 63% of online platforms

RAPID GROWTH IN

expect existing art market operators

`OTHER COLLECTIBLES'

such as galleries to emerge as big

online players when they finally get

At 32%, fine art accounted for

to grips with digital technology. Over

the largest share of online art and the last months we have seen many

collectibles sales ? some way

galleries embracing technology

behind watches and jewellery (23%). from online private viewing rooms to

`Other collectibles' such as stamps virtual reality. However, some of the

and memorabilia now account

big galleries, such as David Zwirner

for a quarter of online sales, and

and Hauser & Wirth have taken the

as traditional auction houses in

concept of online gallery platforms

particular look to attract younger to another level, by offering smaller

collectors, we expect to see a

galleries and art fairs the opportunity

greater focus on this segment.

to exhibit and sell utilising their

technology platforms, and basically

A MARKET ON DIFFERENT

turning these major galleries into

GROWTH PATHS

third-party online sales platforms.

Online platforms display a broad

Hiscox online art trade report 2020

3

COULD THIS BE THE MOMENT THE ART WORLD FINALLY EMBRACES DIGITAL TECHNOLOGY?

CONSOLIDATION AND CONVERGENCE

A large majority (67%) of platforms think the online art market will be dominated by a few global players within the next five years. While the ten biggest platforms globally account for approximately 68% of the total online market, some of those surveyed (48%) think disruption from an outsider is a real possibility. The tougher market conditions imposed by COVID-19 could speed potential consolidation up, or even trigger an acquisition spree among the stronger players, including traditional auction houses keen on building a stronger online presence.

4%

online sales growth in 2019, but COVID-19 has been rapidly driving sales online.

63%

of online platforms expect major galleries to emerge as big online players.

48%

of online platforms believe disruption from an art market `outsider' is very likely in the next five years.

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