Art Market Blog – Will New Online Art Auctioneer Succeed ?
The online fine art sales and art price data website artnet (http://www.artnet.com) has just announced that it will be introducing an online auction service due to start on the 25th of February. According to a press release by artnet “The expensive modus operandi of conventional galleries and auction houses is the reason for high transaction costs which are impairing the liquidity and growth of the art market. artnet’s alternative auction platform is designed to solve this problem”. The problem is that several other companies have attempted to solve this problem and have failed. In 1998 Sotheby’s entered the online auction market but after spending 100 million dollars on the venture it was deemed to have not been a success and was subsequently shut down. Christies also looked into taking a slice of the online art auction pie shortly after Sotheby’s but pulled the plug on their plans after considering the massive cost of startup, the legal liabilities and the fact that Sotheby’s got in first. Turns our Chritisie’s made the right decision.
Even more startling is the fact Artnet have already attempted to launch an online auction site without success. At the time Artnet.com CEO and founder Hans Neundorf said in a statement about the closure of the Artnet.com online auction service that “I remain still an enthusiastic supporter of online art auctions but our Gallery Network has clearly been the more successful service to the art community. This move puts the company on a speedier path to profitability.” It is true that the art market has enlarged considerably since Artnet made their initial online auction attempt but there are also a number of players in the online art auction market that I would have thought had already taken much of the new business.
People who are to purchase big ticket artworks are unlikely to want to take the risk of making a purchase without having been able to thoroughly examine the work in the flesh and those looking to purchase lower priced items already have several established online auctioneers to go to. In order to be successful Artnet will have to offer something that the other online auctioneers don’t, and it will have to be something that is significant enough to lure buyers and sellers away from the traditional auction houses and the other online art auction services. Artnet have emphasised that they are saving costs which they are passing on to the buyers and sellers by not having to physically handle the artwork but have also made the point that a team of experts will be overseeing the quality and authenticity of the artworks. What I cannot figure out is how these experts will be able to ensure quality and authenticity if they are not going to be able to physically inspect each work so I hope that Artnet has it figured out.
I am in no way saying that this venture by artnet is doomed to fail, in fact I really hope that it doesn’t, but there are certain realities that need to be taken into consideration. The first auction for Artnet’s new venture will start on the 25th of February and will include some fantastic affordable works and potential bargains (no buyers premium) by the likes of Warhol, Miro, Sherman, Sera and many others. Artnet online auctions can be found at http://www.artnetonlineauctions.com
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.