Art.sy: the Latest Art Market Dud
Art.sy was hailed in the international press as the final answer to a real art market, just like stock markets. Of course, as a true investment professional (arbitrageur), I know that there are substantial differences between art markets and traditional investment markets.
I recognize that some art index companies at least to try to make their indexes properly by comparing sales over time, however infrequently they occur, of the same work of art by an artist, as this would be the proper way to compare apples to apples. On the other hand, I believe that Artprice's conclusion that the Chinese art market is now number one in the world only shows just how little verification they do and how carelessly they do their research. Beyond the fact that to rely solely on auction results as the definition of an art market misses most of the market, I also know that many of the art auction records in China are pure fiction. Add to that all of the recent disclosure about Chinese auction buyers defaulting on payment for very, very high ticket items, and it becomes a very unprofessional conclusion.
Then, in the past year, it was announced that a new website will make the art market totally transparent and will make the art market just like any other investment market with a depth of information that is necessary to do so; one article called it the holy grail of the private art market. Again, as an investment professional, I already had my doubts. Indeed, back 10 years ago, I single-handedly compiled 70,000 pieces of data in looking at the stock markets of the world, just to write a monograph for an investment course that I taught at Dickinson College. At least, for stock markets, I could get fairly consistent data from stock exchanges.
However, that also brings us to the point that we should point out that for stock, there are, basically, only stock exchanges for trading stocks. Retail and wholesale (large blocks of stocks for institutional players) are all traded in the same market, albeit larger blocks of stock may be traded at a slight discount to smaller block around the same sliver of time. Moreover, stock markets are open five days a week for a whole day.
The art market is more akin to other retail/wholesale markets for goods. There is an interdealer/wholesale/auction segment, and there are galleries in the retail segment. A good rule of thumb in these markets is that wholesale prices are about fifty percent of retail prices. Moreover, the auction market part of wholesale only happens several times a year and with only the limited inventory that has been consigned to auctions. The interdealer segment of the market, on the other hand, is continuously active, but no information about these dealer-dealer deals will ever see the light of day. The retail segment is even less transparent. You might ask a dealer how much he got for the sale of a piece of art, but why should he give you reliable information? That information is his inside information, and to give it out freely is to give away his business secrets. Will a buyer really tell you how much he paid for a work, even if you could find out who that buyer was? Again, there is no incentive for him to do so.
Thus, at best, what could we expect from this new art sheriff in town, art.sy? Would they really give us more than has already been give from other art websites, compiling figures from other sources, whether or not those figures are reliable? Do we need another player in the already crowded on-line art sector? Can they really add additional value?
Well, I had not paid attention to the development of art.sy's holy grail of art, since I read the last article that I saw about it, back around the turn of this year. Then, last week, I got an email saying that I had been selected among 10,000 others to sign up for the beta version of art.sy. So, thinking, what could it hurt, I signed up. When I finally logged in, I found that I could only buy art, and my real purpose in signing up for any such on-line art platform is to sell, as, after all, we are a gallery/dealer in art. So, I dutifully searched FAQ's to find out how to get my gallery on art.sy, and I found an email address for that purpose. So, I emailed. However, all I got back for a form-mail telling me that things were too backed up at art.sy (10,000 beta users is a load?), and, someday, someone, would be able to respond to my email.
So, next, remembering the opening lines on the website about how I could contact the head man with any feedback, requests, etc., I hit the hyperlink to email him, and I got another auto response telling me that he has come down with repetitive stress injury (I assume from typing, although I am not quite familiar with this nouveau disease in a long line of bullshit nouveau diseases, including, of course, recollection of being anally probed by aliens under hypnosis), and, he, too, could not personally respond to my request.
In the end, four days later, I got an email from a real person at art.sy, saying that they were my art.sy specialist. But when i emailed her back about adding the gallery, she, too, told me that things were just too backed up. Therefore, in my final act of dealing with art.sy, I told her that when they get their act together and become more professional, they should contact me again, as I was deleting my account.
I recognize that some art index companies at least to try to make their indexes properly by comparing sales over time, however infrequently they occur, of the same work of art by an artist, as this would be the proper way to compare apples to apples. On the other hand, I believe that Artprice's conclusion that the Chinese art market is now number one in the world only shows just how little verification they do and how carelessly they do their research. Beyond the fact that to rely solely on auction results as the definition of an art market misses most of the market, I also know that many of the art auction records in China are pure fiction. Add to that all of the recent disclosure about Chinese auction buyers defaulting on payment for very, very high ticket items, and it becomes a very unprofessional conclusion.
Then, in the past year, it was announced that a new website will make the art market totally transparent and will make the art market just like any other investment market with a depth of information that is necessary to do so; one article called it the holy grail of the private art market. Again, as an investment professional, I already had my doubts. Indeed, back 10 years ago, I single-handedly compiled 70,000 pieces of data in looking at the stock markets of the world, just to write a monograph for an investment course that I taught at Dickinson College. At least, for stock markets, I could get fairly consistent data from stock exchanges.
However, that also brings us to the point that we should point out that for stock, there are, basically, only stock exchanges for trading stocks. Retail and wholesale (large blocks of stocks for institutional players) are all traded in the same market, albeit larger blocks of stock may be traded at a slight discount to smaller block around the same sliver of time. Moreover, stock markets are open five days a week for a whole day.
The art market is more akin to other retail/wholesale markets for goods. There is an interdealer/wholesale/auction segment, and there are galleries in the retail segment. A good rule of thumb in these markets is that wholesale prices are about fifty percent of retail prices. Moreover, the auction market part of wholesale only happens several times a year and with only the limited inventory that has been consigned to auctions. The interdealer segment of the market, on the other hand, is continuously active, but no information about these dealer-dealer deals will ever see the light of day. The retail segment is even less transparent. You might ask a dealer how much he got for the sale of a piece of art, but why should he give you reliable information? That information is his inside information, and to give it out freely is to give away his business secrets. Will a buyer really tell you how much he paid for a work, even if you could find out who that buyer was? Again, there is no incentive for him to do so.
Thus, at best, what could we expect from this new art sheriff in town, art.sy? Would they really give us more than has already been give from other art websites, compiling figures from other sources, whether or not those figures are reliable? Do we need another player in the already crowded on-line art sector? Can they really add additional value?
Well, I had not paid attention to the development of art.sy's holy grail of art, since I read the last article that I saw about it, back around the turn of this year. Then, last week, I got an email saying that I had been selected among 10,000 others to sign up for the beta version of art.sy. So, thinking, what could it hurt, I signed up. When I finally logged in, I found that I could only buy art, and my real purpose in signing up for any such on-line art platform is to sell, as, after all, we are a gallery/dealer in art. So, I dutifully searched FAQ's to find out how to get my gallery on art.sy, and I found an email address for that purpose. So, I emailed. However, all I got back for a form-mail telling me that things were too backed up at art.sy (10,000 beta users is a load?), and, someday, someone, would be able to respond to my email.
So, next, remembering the opening lines on the website about how I could contact the head man with any feedback, requests, etc., I hit the hyperlink to email him, and I got another auto response telling me that he has come down with repetitive stress injury (I assume from typing, although I am not quite familiar with this nouveau disease in a long line of bullshit nouveau diseases, including, of course, recollection of being anally probed by aliens under hypnosis), and, he, too, could not personally respond to my request.
In the end, four days later, I got an email from a real person at art.sy, saying that they were my art.sy specialist. But when i emailed her back about adding the gallery, she, too, told me that things were just too backed up. Therefore, in my final act of dealing with art.sy, I told her that when they get their act together and become more professional, they should contact me again, as I was deleting my account.
Posted by Leona Craig Art at 7/14/2012 5:57 AM 
Categories: Art Investment, Art Markets
Tags: art.sy art art market art website art statistics dealer gallery stock market investment investment market
Categories: Art Investment, Art Markets
Tags: art.sy art art market art website art statistics dealer gallery stock market investment investment market
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