Mining for The Big Data in The Art World
On Friday, Vastari and Cromwell Place hosted the last panel discussion in the series of blueprint breakfast briefings. Moderated by Vastari’s own CEO and Co-founder, Bernadine Bröcker Wieder, the panel discussed the uses of big data in the art world. On the panel were Anders Petterson, Founder and Managing Director of ArtTactic, Christine Bourron, CEO of Pi-eX, and Magnus Resch, Entrepreneur and Founder of the Magnus-app. All these companies share the same goal: to provide financial clarity in the art world by mapping its transactions and to give clients a better expectation of sale prices on artworks of the same artist by registering the sale prices of artworks. However, each program is unique as they all differ in their aims, audiences and focusses as well as in their methods to obtain data.
“art may not be an investment, but if you invest in art, you should be aware of the data” – Christine Bourron
In Pi-eX, the financial background of its founder is clearly visible. Their primary audience includes fine art collectors who buy art as an investment. For these investors, Pi-Ex’s data can determine how much the work of a certain artist yielded, how much certain collectors spend and to what extent the involvement of an institution e.g., an auction house, makes a difference in price. A conglomeration of these prices is then used by the program to predict the proceeds of a work of art in the future.
ArtTactic is a research company that produces reports on the art market. They target a similar audience, in the way that they too focus on players with large capital. Unlike Pi-eX, they don’t solely focus on fine art, rather they try to explore the intersections between the art market and the financial industry, e.g. insurance. ArtTactic originally aimed to collect crowed-sourced qualitative and quantitative data in order to build a global intelligence network for the art world composed of knowledgeable, experienced and talented individuals. As the company grew, the initial aims were reached and today they focus on increasing transparency and participation by educational and professional development.
Like ArtTactic, Magnus is a crowdsourced database. Magnus Resch shared that he has followed Anders Petterson’s work closely as he was completing his education. However, Magnus targets art buyers with a much lower budget, believing that the main potential in art trade is in the sales of $200,000 and less. as a Crowd-sourced app, Magnus both educates and depends on its users, as they provide the majority of the data, like the paintings precedents and previous sales prices of the artwork that you scan using your phone, as well as the prices of similar works. This way, users are provided with a better reference when they visit galleries i.e. are better prepared if and when they want to purchase art.
“These apps aren’t for the people on the inside, they are for the people on the outside that want to get in” – Anders Petterson
Given how all programs depend on the exactitude of the data: their collection and evaluation is very important. Anders Petterson explains that ArtTactic tried to collect subjective reports on the industry from as many sources as possible, using these to create an objective indication of the developments and changes. Magnus Resch agrees that by considering the collectors and the auctions it is possible to create a good impression on the current atmosphere of the art world - what Anders calls a buyer confidence index. However, auction results reflect only 50% of all sales within the art world and the rest is made up by the private gallery sales. Unfortunately, galleries are very protective of their internal workings, thus making them the unattainable holy grail (or as Magnus calls it, “black box”) of the art world.
In order to compensate for the secrecy of the galleries, the Magnus app utilises its users to update the data. Every time an artwork is scanned, the user is either directed to the existing entry about the artwork or otherwise asked to provide information for a new entry.He or she is also able to add additional information to an existing entry. In total, this creates three categories of data that is collected by Magnus. First, it is publicly available data, like action sales, that is collected and cleaned by the program. The second category consists of data that is collected from galleries and other public sources. Third is data by collectors who enter data about their private collection and acquisition price.
Unlike Magnus Resch and Anders Petterson, Christine Bourron does not use crowdsourced data, as Pi-eX wants to ensure that the used data is clean. Therefore, they initially collected and cleaned the data themselves and have since then switched to software that can unify the collected data. As a result, Pi-eX works with a much smaller dataset as they believe that clean data is more reliable than big data.
“Art is an intellectual experience, you need contexts such as prices and owners. Apps allow customers to bring that context with them into the gallery.” – Christine Bourron
Setting their differences in respect to data collection aside, the panel continued to discuss their common goal: creating transparency to grow the art market. The way today’s market works, artists cannot make a living and more and more galleries are forced to close. This can only change when more people start to spend money on art. Christine Bourron elaborated on this sentiment that the only way to do this is by making art more convenient and more approachable. 20 years ago, this was done by offering artworks and their context on the internet. Today this is done by bringing the internet and with it the context back to the galleries, for example with apps like Magnus.
“Galleries won’t be able to sustain themselves, when they are forced to rent spaces they neither need nor can afford” – Magnus Resch
Yet, context is not the only thing that makes art more approachable and convenient. One of the major elements of the elitist and exclusiveness of art is caused by its pricing. Almost everyone in the audience had also visited Frieze London, but nobody bought anything. This discrepancy between the amount of passive and active players in the art trade gives a clear indication of where hidden sales may lay: most likely in the low-value sales. Collecting sales prices only confirms these suspicions as data collected by Magnus Resch shows that more than half of all the galleries in the US generate less than 200,000 dollars in revenue per year. This type of data shows that most galleries will not be able to keep up with the current trends in the art world. Trends that keep concentrating art sales around major art fairs like Frieze London and Art Basel, that require a high overhead. Due to these high costs of the stands on these fairs, only a small number of galleries have the capital to attend these fairs. In addition, these galleries must increase their prices in order to make a profit and to make the trip worthwhile - and increasingly, art fairs are requiring exhibitors to have a permanent space to be allowed in. By concentrating art sales on fairs, prices will go up and - the panel argued - thus the volume of sales will go down, meaning artists and galleries in the lower price categories will lose their income. If this trend continues, it will ultimately influence the high-priced art trade as well. For when galleries close, traders will want more security. The current way to provide this security is by mapping the risks or rather the sales records, which is why most data collection primarily if not only collects sales records.
In conclusion, the panel fears that the elitist character of the art world with its strong focus on high prices will eventually become its downfall. With the stagnating economy, the high-end of the art market is struggling, yet it also creates potential as small artists and galleries are now a lucrative and realistic option for those who are no longer able or willing to shop at the more prestigious institutions. However, little research and investments have focussed on the lower- and mid-range price categories. Therefore, the art world might want to consider other forms of data to predict increases in popularity of artists and galleries beyond the current auction records. Similarly, the art community would benefit from a shift in focus towards its less elitist and more affordable branches.