Price Transparency & the Art World
“So, what’s it worth?”
It’s a simple question. Or at least, it should be. But if you ask your local art gallery assistant what a particular painting costs, you may get little more than an uncomfortable stare.
For centuries, clouds of uncertainty have hung over artwork prices. Galleries have taken Sun Tzu’s advice to heart: “Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.” By refusing to post prices, galleries can manipulate potential buyers by showing a price tag tailored to the collectors’ perceived budget. Galleries have also used this lack of transparency to offer special treatment (and prices) to VIP buyers.
This failure to be open about prices was fine when the only art collectors were ultra-rich elites. But the world has changed. And so has the art market.
The Changing Art Market
Over the past twenty years, the art market has undergone an incredible shift in who is making purchases. In 2000, most artwork was bought by wealthy people in the United States and Europe. Chinese buyers made up less than 3.7% of all art purchases. By 2016, that number had skyrocketed to 19% and was still growing. In other words, the art industry has gone global.
However, this isn’t the only shift that’s taken place. We’ve also seen more and more middle-class people buying art, both as tokens of self-expression and as investments. The art world has never been flatter than it is today. And all signs point to a further flattening over the next several years, especially with the rising popularity of art-related NFTs and pop-culture adjacent artwork.
These facts are good for everyone, from the growing number of artists and collectors to the galleries showcasing all of this artwork. But it makes the question we began with even more important.
“What’s it worth?”
Changing Views on Artwork
You see, that’s the question everyone wants an answer to. And not just because they need to know how much they’re going to have to pay. More and more collectors view art as an investment with the potential for big gains.
Since the investment potential of artwork has become a bigger factor in the equation, understanding price is more important than ever. Imagine buying a stock or other investment blind, unsure of what it’s really worth and what it’s future potential might be. With the lack of price transparency in the art world, that’s been how new art collectors have had to go into every purchase.
But it’s not just the investment potential of artwork that’s increased the demand for transparency. It’s also gone up because our culture’s understanding of art has shifted. Today, people understand that art isn’t just a way to express their personality or class. It’s a commodity, subject to the same economic pressures as any other carrier of economic capital. This fuller understanding of what art really is has also driven the need for greater transparency.
Since collectors realize this need, the demand will force many galleries and artists to be upfront about their prices. The days of hiding the price tag until you knew who was paying are coming to an end. COVID-19 and the shift to more online sales has only sped up a transition that was already taking place.
But price tags aren’t enough. Collectors need to understand that a piece of artwork’s value is subject to a variety of factors. So, it’s essential to keep those factors in mind when deciding whether you’ll make a purchase. And that’s where Regestra comes in.
How Regestra Can Help
Regestra is currently working on a project that will make it easier than ever to discern a piece of art’s true value. Taking advantage of IBM Watson and a variety of predictive models, Regestra will analyze all of the data concerning a piece of artwork and offer a recommended price range — finally answering the question, “So, what’s it worth?” This will make it easier than ever to understand the true value behind every artwork you buy, empowering you to make wiser purchasing decisions.
If that wasn’t enough, Regestra will also require all artists and collectors who are registered with us to disclose price information. This will ensure we all get to live in a future where price transparency is genuinely valued. That way, everyone can enjoy the benefits of a healthy, thriving art market, from novice collectors and artists to the same ultra-wealthy elites that have been buying artwork for generations.
