The art market runs on value. High-value pieces draw up enough hype about high-value artists to draw in high-value sales. The longer the bidding takes, the higher the price for the painting. Sales held steady— until the COVID-19 pandemic struck, leaving the fate of the art market uncertain.
When the pandemic subsided, the world grew ravenous for art. In 2022 alone, global sales in art reached 67.8 billion, a 3% increase from 2021. This spike in sales and revenue followed the easing of restrictions worldwide in the wake of the pandemic. Galleries reopened to the public, excitement crescendoed, and auction houses began bringing exceptionally diverse and valuable collections to the stage.
The first few months of this year, however, have transpired differently. Auction houses began shifting their marketing strategies and recessions plagued multiple countries. Last year, biddings could take as long as five minutes for a single item, but now, auctioneers are hearing “pass.”
“Although ongoing economic and sociopolitical uncertainties and increased regulations on international trade pose challenges to the art business, and despite the fact that the overall shape of the market's recovery has been uneven coming out of the COVID-19 pandemic, this year’s report once again underlines the dynamism that continues to underpin the industry, as well as the resilient demand for art on a global basis.” Noah Horowitz, CEO of Art Basel, said in a statement.
How are Different Countries Handling the Turbid Market?
Even though the global market continues to exceed pre-pandemic records, different countries are facing different strides and challenges in art sales. Out of the entire world’s sales, 45 percent of those came from buyers in the United States. China is currently facing a steep decline with a 14 percent drop in sales. This trend has continued into this year, as Hong Kong employees walk out amid ongoing governmental art suppression.
According to Hong Kong Arts Centre’s annual report for 2022, the company employed a paltry 63 people. . The South China Morning Post (SCMP) has seen nearly half its employees depart in the first half of 2023. Among these losses are the program director, senior program manager, and the director of the Ifva film and video festival.
One reason why the Hong Kong Art Centre is facing this downward slope is Hong Kong’s security laws surrounding the exhibition of politically-charged artwork. While Hong Kong’s government used to hold considerable autonomy in speech expression, the CCP has strengthened restrictions on political and creative speech in journalism, art, and social media.
How are the Market’s Biggest Names Doing This Year?
Much like different nations around the world, the largest names in art sales are facing disparate challenges in this year’s art market. In the midst of variable auction results, many auction houses are beginning to market towards younger up-and-coming collectors in the hopes they will become reliable, long-term buyers. In 2022, maintaining relations with current buyers was the main priority for most galleries.
The world’s biggest auction house is facing problems in a corrective market this year. Christie’s revenue has dropped 23% in the first half of this year, with no end in sight to this downward trend. Christie’s CEO, Guillaume Cerutti, said in a statement that the percentage drop was caused by a “challenging macro-environment.” Despite this, Christie’s still views their 87 percent sell-through rate as promising amid the slowing market.
At a recent auction in London, Christie’s earned $81.1 million in art sales, but many paintings sold well below the starting ask. Christie’s New York sale fared slightly better, with $153 million in sales at auction’s end. It also set records for artists like Alma Thomas and Barkley L. Hendricks. Another large auction house, Phillips, has also faced lackluster results in recent months. The recent Phillips auction was a resounding “pass.” Banksy, Kusama, and Warhol’s works fail to sell, among dozens of others.
Multiple higher-up employees were laid off at Sotheby's amidst a turbulent NFT market despite $11 million in sales this year. Some view this as a symptom of a softening art market, while others see it as a “correction” after massive peaks from 2021-2022. According to ArtNews, Sotheby’s halted NFT sales in June, making multiple jobs in that department obsolete.
What Happened to NFTs?
According to Art Basel, “Art-related NFTs,” sales dropped below 1.5 billion in 2022, but Statista Market Insights projects NFT revenue in the United States to reach nearly 782 million this year, with the global market projected to reach $1.6 billion, still higher than sales in 2020. So no, the NFT market is not dead, and this trend is part of the reason why some economists see this as another symptom of a market correction.
The Jackson Pollock Studio still sees potential in the NFT market, and recent sales are proving that their risk is yielding rewards. Pollock’s NFT line earned $525 thousand within only three days. The studio launched “Beyond the Edge, the Jackson Pollock Studio Collection” with Iconic on July 18. Four NFTs were released within the collection of Pollock’s studio floor. The blockchain files capture the unintentional art along Pollock’s floorboards, as he was known for placing his canvases there without sheets to keep the paint from running everywhere. Each hardened paint drip preserved insight into Pollock’s creative process, and the splashes of colors within his own space can now adorn our own.
What can we expect in the future?
As more auctions and festivals display a wide array of pieces, sales will continue to fluctuate throughout the year. Current trends in 2023 show that people are simply not buying as much art as they did in 2021 and 2022, but as many economists have pointed out, the art market couldn’t ride this kind of upward trend forever. We don’t love art because it is successful—we love art because it is unpredictable. Art is as messy and chaotic as the stock market. Every fluctuation reflects exactly what we love about the art world, regardless of any projected “correction” or “leveling out.”
At the end of the day, these data points represent a market whose foundations are built on unquantifiable parameters. We can follow the money to see where the art market goes, but those line graphs fail to show the immeasurable dedication and commitment of artists who, without their contributions, would render the art market nonexistent.
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