The entry of blockchain in the market is expected to improve trust and transparency
The art auction market size to cross USD 38 billion by 2024, growing at a CAGR of over 3% during the forecast period. The use of Artificial Intelligence technology in the global art auction market is expected to increase revenue streams, help make decisions, and enhance user experience. Since the art market is unpredictable, highly volatile, dependent on research and knowledge, and held by the reins of taste, emotions, and human subjectivity, it makes for predictive AI technology a compelling reason to harness the potential of big data. While it is not entirely replacing the human element, the technology is increasingly making the market efficient and helping to navigate the complicated terrain of information.
Several art auction houses and online marketplaces are using AI and machine learning technology to support artists in selling their work and assisting collectors with finding pieces they would like for purchase. ArtRank is synonymous to an art-market analyst helping institutions and collectors make informed collecting decisions through its machine learning algorithms by aiding in determining the future value of works by budding artists.
The entry of blockchain is expected to improve trust and transparency in the global market by offering new owners a trusted place to carry out due diligence, explore provenance, thereby reducing transaction costs by eliminating intermediaries and making more informed purchasing decisions.
ART AUCTION MARKET SEGMENTATION
This research report includes detailed market segmentation by
ART AUCTION MARKET: CHANNELS
The offline segment is expected to witness an incremental growth of $7 billion by 2024.
The offline segment has become more diverse in terms of lots. The offline segment is likely to retain its dominance in the market as it is one of the few cultural-led businesses that has not been affected by the digital revolution. Several vendors are offering incentives to get edgy buyers and sellers to participate in auctions. Hong Kong, Japan, and South Korea have recorded massive growth. However, Europe, where most large auction houses were born, remains a broad zone of supply and export.
Since the online market has tons of potential for those with a penchant for art regardless of their budget, the segment is expected to grow. The online segment is expected to overcome several challenges arising from the broadening market. Vendors depend on mobile applications that enable real-time bidding and live to stream of auctions. Hence, technology is thereby playing more of a complementary role than a supplementary role.
ART AUCTION MARKET: PRICE
The top-end segment is highly dependent on brand value and popularity
The top-end segment is highly concentrated due to low-profit margins with high risks. The segment is highly dependent on brand value and popularity. As the competition in the top-end segment is intense, players often undercut each other and are ready to decrease their commissions for the sake of staying competitive.
The mid-range segment is in the right place. The quality and the sheer scale of the market are beginning to increase the appeal for sellers. The US, China, and the UK account for more than 75% of the mid-range segment with China taking the lead in terms of value.
Owing to the advent of the digital revolution, an inclusive scenario has evolved for those interested in low-end arts. With the emergence of players such as Artsy and Invaluable, there has been an explosion of sales in the low-end segment.
ART AUCTION MARKET: PRODUCT
The decorative segment is growing at a stable rate as it is not necessarily subject to speculative collecting
The scope of fine and decorative art segments has witnessed expansion and shrinkage with the change in definition and value. The demand is coming mostly from high-quality fine art. The collectors in Western and Eastern Asia and the Middle East are bolstering the market among global collectors. The collection is moving toward conscious consumption. As the art market is globalizing, new strategies have come forth to auction off noteworthy fine artworks outside of major art capitals.
The decorative segment is growing at a stable rate as it is not necessarily subject to speculative collecting. Cyclicality and supply and demand dynamics are the major underlying factors driving the decorative segment. However, this market is a lot more dependent on provenance, scarcity, and condition of the art.
ART AUCTION MARKET: GEOGRAPHY
The market in the US has a stronghold, with New York dubbed as the international capital of the art market
North America witnessed solid growth in 2018, with the US holding a strong position in the market. The region accounts for more than 50% of the high-end collector base, a position it has held for over two decades in the face of intense globalization and shifting infrastructures of wealth.
As the APAC market is at the center of capital flows across the globe, the region is benefitting from structural changes, which are demonstrating the highest potential for the market. Collectors in the region prefer buying at auctions over art fairs. A stable eco-political climate and the increased confidence in spending have resulted in the thriving auction market. Vendors can substitute loss in Europe through growth in Asia.
Barring the UK, the EU share declined by 8% in 2018, owing to prolonged market stagnation. This is mainly because of its regulatory structure, which makes it extremely expensive and complicated to carry out art transactions. Live bidding and online sales are used to expand the customer base.
South Africa is likely to act as a springboard for the market of other African nations as works from contemporary artists from Ghana, Nigeria, and Cote D’Ivoire are being displayed in Johannesburg and Cape Town. In Latin America, there is expected to be renewed interest in the art scene in the region as higher visibility will likely increase dialogue between global art collectors and local auction houses.
Although the Middle Eastern economy is under stress, art has been viewed as a means of expression, driving the organic growth of the market, marked by the rapid growth of new museums, an increase in art production, and the growth of art institutions.
KEY VENDOR ANALYSIS
The market is a duopoly - Sotheby’s and Christie’s. This is mainly because of the growing number of wealthy buyers that are contesting for a dwindling supply of the most famous artists. Both the firms have combined sales of more than 80% of works going for more than $1 million, and the competition between them is active. As Sotheby’s goes private, it is expected to intensify as the company regains its ability to compete more successfully with Christie’s without having to cut back on its negotiation for guarantees, specifically in high-value assignments. Phillips, however, while still far behind in terms of revenues, is showing quite some potential in catching up.
The market is not plagued by artificial scarcity. Most houses put on sale anything with very few exceptions. Vendors nevertheless face the challenge of sourcing of valuable, quality property to sell. Seeing as competition also comes from art dealers across all collecting categories, it is essential that vendors create meaningful, personal, and institutional relationships by providing clients with guidance on identity, collection, acquisition, and development. Auction houses must further aid with services that fall under finances, personal considerations, and logistics when it comes to helping clients sell their artwork.
The Art Auction market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:
Market Segmentation by Channel
- Top End
- Medium Range
- Low End
- Fine Art
- Decorative Art
- South Korea
- North America
- Rest of the World