Virtual Art Fairs and the Impact of COVID-19 on the Art Trade

Art fairs, like so many other live event gatherings, have been gravely disrupted by the COVID-19 crisis. Consequently, many fairs have moved online for the first time, or are in the midst of transitioning to an online rendition. This development reflects the acceleration of a slow-moving trend that was already well underway even before COVID-19 struck: the digital transformation of the art trade.
2/07/20
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By Doron Fagelson
Vice President, Media & Entertainment
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Virtual Art Fairs and the Impact of COVID-19 on the Art Trade

In a world where social distancing is the new norm, art trade professionals are exploring, discussing, reconsidering and re-evaluating the value and potential of online offerings from a fresh perspective.

Just as many businesses are reckoning with the long-term implications of the sudden shift en masse to remote work precipitated by the current crisis, many in the art world are wondering what virtual art fairs portend for the post-COVID-19 art world. In light of the relative importance of art fairs to the art trade industry as a whole today, and the current restrictions on large gatherings, this is a poignant and pressing question.  

The Value of Physical Art Fairs

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In his 2008 book about the contemporary art market, The $12 million Stuffed Shark, Don Thompson referred to the start of the 21st century as the beginning of the decade of the art fair, noting that the number of established art fairs had risen to 205 in 2008 from just 55 in 2001. Since then, their significance to the art world has only increased: the 2020 Art Basel & UBS Art Market report put the number of established international art fairs in 2019 at close to 300, with 171 of them featuring at least 20 exhibitors (see related chart). The art fair phenomenon and their increasing value to the art trade can be assessed on three levels:

  1. Financial value. According to the 2020 Art Basel & UBS Art Market report, global art fair sales are estimated to have reached $16.6 billion in 2019 out of $64.1 billion in total global art sales. They represented 45% of the share of dealers’ annual sales by value in 2019. The level of spending generated by art fairs also has a positive economic impact. It is estimated that the number of jobs created directly from ancillary expenditures on art fairs, as reported by auction houses and dealers in 2019, was 85,580.
  2. Branding value. Major art fairs have a high degree of brand equity, which compensates for collector uncertainty and can have a dramatic effect on art prices. When collectors purchase art from a branded art fair like Art Basel or Frieze, the value of the work is enhanced by several components: by the brand of the fair itself, by the expectation that the work must be of high quality to be admitted to the fair in the first place, by the collective sense that works displayed at such fairs where large numbers of other collectors are also gathered must be in high demand, and by a fear of missing out.
  3. Social value. Art fairs embody a strong social dimension. Part of their attraction is affording people many opportunities to network, experience chance encounters, nurture and deepen business relationships, exchange ideas, and engage in lively conversation about featured artists and their work. This social dynamic provides significant upside to dealers in particular in terms of customer outreach. According to the 2020 Art Basel Market report, “Art fairs remain a key method for dealers to reach a higher volume of new buyers from local and international markets." It is also a major draw for the collectors who attend. As Don Thompson states in his book, The Supermodel and the Brillo Box, “Collectors are attracted to fairs because they combine socializing and convenience. Many of the UHNW individuals – beloved by dealers – are time-poor. With fairs they can consolidate search and purchase, networking and partying in a single location.”

The Value of Virtual Art Fairs

Given their value and significance to the art trade, efforts to conduct art fairs online while large gatherings are presently restricted come as no surprise. Besides needing to be commercially viable, a formidable challenge is in crafting a virtual experience that can be engaging and socially stimulating, even if the experience is different from how social interactions occur in real life. So how well have such efforts fared from these commercial and social perspectives based on the recent evidence?

Art Basel’s response to the Hong Kong fair cancellation in March was to fast-track its Online Viewing Room project. The virtual fair featured over 2000 works, with participation from 90 per cent of the galleries who signed up to the cancelled fair. It attracted 250,000+ visitors compared to the 88,000 who attended the fair last year. Commercially, however, the picture was mixed: sales were reportedly robust for mega galleries but meager for small to mid-tier galleries, possibly a result of prestige galleries doing a better job of promoting their virtual presentations.

The virtual version of Frieze New York in May saw similarly solid sales numbers for mega galleries, with some items hitting six- and seven-digit figures. And the high level of interest in the fair was evident early on. According to fair director Loring Randolph, more people logged on in the opening 15 minutes of the VIP preview online this year than walked into the fair during the first 15 minutes of the VIP preview on Randall’s Island last year. There were also efforts to create a sense of community and enable social connections by supporting live conversations and capturing fair highlights by video.

The criticism of online viewing rooms as a replacement for physical fairs is that the experience can feel lonely and anti-social, and isn’t the same as being in the same physical space with an artwork. Susan Moore writing for Apollo Magazine described her Art Basel Hong Kong virtual experience as “underwhelming,” and suffering from “too little stimulation.” In a CNN Money interview, Swiss art dealer Dominique Levy said the experience was “…not friendly: you go on a website, you are forced to look at art in a digital way. You aren’t having a conversation, you aren’t having fun, you aren’t seeing your friends.” 

But perhaps this is a moment to recognize that having an experience in a virtual space does not need to be the same as an experience in a parallel physical space to still have validity. It’s hard not to be critical of online viewing rooms if seen purely as a replacement for physical art fairs.

When viewed as an alternative way to experience an art fair, however, and one that may even have a future role in augmenting reality once physical art fairs re-emerge from the current crisis, it is easier to appreciate the things they can provide which physical fairs do not, and how they can be best designed to result in a valuable and worthwhile virtual experience.  

Virtual experiences for art can be greatly enhanced by the provision of informative, contextual information about artists and artworks using a range of media that isn’t typically available at a physical art fair. Art world insiders are starting to appreciate this as part of the value-proposition of digital offerings.

In the words of Lucas Zwirner, head of content for the David Zwirner Gallery, “Online exhibitions can do things that brick-and-mortar exhibitions can’t...They can embed videos, longer excerpts of art-historically relevant material, and artist-created content.”

The recent digital art event Named Not Cancelled Dubai included in-depth videos about some of the featured artists’ previous works. Speaking of her gallery’s planned participation in the event, Isabelle van den Eynde, noted that “…While nothing replaces the physical experience, the content that we will provide expands what you may probably get when you visit an exhibition at our galleries.” As more art fairs go virtual and competition intensifies to attract visitors, we can expect increased demand for the services of technology consulting firms with expertise helping customers to manage multi-media content in a clean and simple but visually elegant and engaging way.

Video-conferencing and interactive chat tools to facilitate remote conversation and virtual get-togethers have been all the rage during the COVID-crisis, and virtual fairs are ideally positioned to benefit from and utilize them. Webinars and cultural programs can be easily incorporated into virtual fairs to increase social engagement and encourage an exchange of ideas.

Interactive talks online can, paradoxically, result in a more intimate and engaging experience for some, since audience members are no longer distanced from the speaker and may feel more at ease participating from the comfort of their own living room. Along similar lines, the Frieze Viewing Room “inquire” button feature that connected interested buyers with dealers over Facetime offered an intimacy and the possibility of a more meaningful, in-depth conversation that is much harder to achieve in the tighter spaces and hectic atmosphere of a physical fair.

There are signs that virtual art fairs are also encouraging more collaboration among galleries and a willingness to adopt a profit-sharing model between the fair participants. An online art fair recently organized by the non-profit group New Art Dealers Alliance (Nada), which featured about 150 galleries and where a portion of all sale proceeds went into specific pools to be shared evenly among the participating galleries and artists, is a good example of this development. The profit-sharing model is likely to have strong appeal in future with smaller and mid-level galleries especially, who have struggled with the exorbitant costs and time commitments required to shuttle between geographically disbursed art fairs. 

Exploring New Frontiers

Extended Reality (XR) technologies have enormous potential to create deeply immersive and engaging experiences for audiences, but their impact on the art industry and elsewhere outside the gaming world has been tempered to date by the poor penetration of VR headsets into the consumer market. With global closures of cultural centers, live sporting events, theaters and music concerts, some XR enthusiasts are optimistic that we are in the midst of a major turning point, sparking new projects and investments.

Augmented Reality (AR) thus far has made the biggest inroads into virtual experiences of art: Frieze’s online offering had an AR feature that let users place two-dimensional works in their own spaces. AcuteArt has been developing a new type of AR that enables you to place yourself inside immersive environments through the use of an app that has already been downloaded by millions.

VR may not be too far behind in this arena. Sony was reported by the Financial Times to be working on perfecting its VR headset on hopes of VR becoming a mainstream entertainment technology due to increased demand for online-only concerts and crowd-free sports events. Such investment on an aggregate level is likely to spur innovative VR-based solutions for virtual art fairs in the not-so-distant future.

The underlying digital platforms being built to support virtual art fairs present interesting opportunities to collect data and draw insights from it, both in terms of the artworks presented by galleries and artists, and in terms of cultivating a better understanding of the attending audience. Interest in using this data to improve virtual experiences and understand what works best during a time of rapid experimentation with virtual formats, and to help dealers know their customers better, will only grow and carry beyond the COVID-crisis.

Changing Perspectives

As the cumulative impact of global shutdowns due to COVID-19 increases our exposure to virtual experiences and digital events, a subtle but incredibly important trend is unfolding: the de-stigmatization of virtual life. This trend is apparent throughout the wider economy.

Millions of consumers have tried out the online grocery market for the first time, many of whom may have never done so were it not for COVID-19, as previously they harbored no desire or need to. In the process, they have discovered it not only works well but is also highly convenient, so the experience may very well alter their grocery buying habits well after the COVID-crisis abates. 

Along similar lines, as art fairs and auctions have moved online, bringing ever more price transparency with them, notions of experiencing art via virtual spaces and making price transparency widespread in the trade is being increasingly accepted despite years of resistance from gallerists. This trend is likely to change the business models and sales practices of galleries and dealers, and the viewing and purchasing habits of even the most traditional-minded art collectors.

As more people discover art through virtual experiences and digital events, and as the value of digital solutions for art is further socialized and appreciated, attitudes towards the digital transformation of the art trade will grow more and more positive. In the end, that may be the most significant and enduring outcome of this crisis for the art world in the post-COVID-19 era.

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