7/23/2017

Last Sale at Christie's South Kensington


The NY Times has an interesting article on the closing of the West London, Kensington showroom of Christie's. The closing was announced awhile back, but the last sale was last week.

The article notes that UK auctioneers Cheswick is now opening an auction showroom in the area to fill the void left by Christie's. One of the interesting comments was the need for interesting consignments and not basic furniture, the rather brutal quote on the new type of local collectors “They don’t want big lumps of brown furniture.”

The below block quote is only a portion of the article, so click through the source link for the full article.

The NY Times reports
A crowd of about 200 people gathered in West London on Wednesday afternoon to witness the sale of a late 20th-century Georgian-style dining table, bringing to an end 42 years of auctions at Christie’s salesroom in South Kensington.

The last of 466 lots in a sale of furniture and other objects, the 12-foot 8-inch-long walnut table had been used by the auction house for board meetings. With the table’s proceeds marked for charity, it carried an estimate of 2,000 pounds to 3,000 pounds, or about $2,600 to $3,900.

But first, Nic McElhatton, chairman of Christie’s South Kensington, tearfully addressed the audience (made up mostly of past and present employees) to say a “fond farewell to a dear friend,” referring to the salesroom, which is being closed to make way for live and online sales at the auction house’s headquarters in the St. James’s district of Central London.

The table was bought in the room by Julia Delves Broughton, a director at Christie’s, for £2,500 with fees.

The result, somewhat anticlimactic, encapsulated how much the art and antiques trade — and interiors themselves — have changed in recent years.

“More and more people want funky postwar design, pictures and decorative objects — and maybe one signature antique,” said William Rouse, managing director of Chiswick Auctions, a suburban London salesroom that is aiming to capitalize on Christie’s departure from South Kensington, one of the city’s most affluent neighborhoods. “They don’t want big lumps of brown furniture.”

Chiswick Auctions holds live weekly sales covering about 16 collecting areas, with most of the lots estimated at £100 to £1,000. Trying to move more upmarket, the company has leased a space five minutes’ walk from Christie’s former salesroom. The venue, as yet undisclosed, is set to open on Sept. 1 and will be used to display higher-quality items, with 10 former Christie’s employees recruited to run the expanded operation.
Source: The NY Times 


7/21/2017

Christie's 1st Half 2017 Up 29%


artnet news is reporting on Christie's first half 2017 results, and while overall sales are up 29% in GBP, due to currency exchange, it is up 14% in USD, or up $2.8 billion. Sotheby's was up 8% or 2.54 billion by comparison.

On the surface the sales growth looks strong, yet there are some concerning areas and surprising declines, or perhaps levels of decline, such as private sales being down a rather large 66.5% and Asian sales were down by 15%.

artnet news reports
Christie’s London may be a miserable place to work at the moment as droves of staff prepare to leave their offices ahead of the closure of its South Kensington branch. But the auction house can still preen its feathers with the announcement that it has retained market share from its rival during the first six months of 2017.

This morning, the company announced global auction sales of £2.2 billion, up 29% from last year’s total. The total in dollars—$2.8 billion—is up only 14%, because the dollar has been a more stable currency over the period than the pound, which fell dramatically in June 2016. By comparison, Sotheby’s auction sales for the first six months of 2017 were $2.54 billion, up 8% on last year in dollars.

Despite Christie’s strong auction results, the house’s overall sales—which include online-only sales as well as £122.2 million in private sales—reached a more measured £2.35 billion (up 14% from last year). In dollars, the combined sales totaled $3 billion—up just 1% from last year’s sum. That’s a figure that might surprise many, considering how sharply the auction market seemed to have risen since last year’s downturn.

Constantin Brancusi, La muse endormie (1913). Courtesy Christie's Images Ltd.
Christie’s top lot of the year to date: Constantin Brancusi’s La muse endormie (1913), which sold for $57.4 million in May. Image: Courtesy Christie’s Images Ltd.
The overall rise in public auction sales was led by the Americas, where sales increased 58% in sterling (to £1.15 billion) or 39% in dollars (to $1.46 billion). But these gains were tempered by a 66.5% decline in private sales, from the $463.9 million (£322.1 million) reported by Christie’s in the first half of last year, to $155.4 million (£122.2 million) in the first half of this year. Another blow was felt in Asia, where auction sales were down 15% in dollars to $314.3 million.

That blip, however, is balanced out by Christie’s otherwise successful drive to encourage Asian buying globally, which increased by 39%. The house attributed much of its success to a 90% increase in Asian buying of Asian art, stimulated by the record Asian art sales held in New York in March.

No data on Asian buying of Western art was included in the report, though we know that 20% of buyers in London’s Impressionist and Modern art sales this summer and in March were from Asia. In fact, Asian clients accounted for the same proportion of spending in 2017 sales as Americans did: 35% each.


A chart of the geographic breakdown of Christie’s client spending in the first half of 2017. Courtesy of Christie’s.
The return of £10 million-plus lots also contributed to Christie’s success. The number of these pricy works offered by the house nearly trebled during this period, from 14 to 38.

Online-only sales are reported as “stable” at £19.8 million ($25.2 million), though there appears to be some confusion: Average prices for sales online are said to have increased to $7,222, but last year’s report quoted the average value per lot online as $8,251. Is Christie’s telling us there is a difference between price and value? (The house later clarified that average online sales price for the first half of 2016 including wine was $6,224; the figure announced last year did not include wine.)

These reports also frequently trumpet the number of “new buyers”; Christie’s notes that 25% of buyers were new to the house. These clients are unafraid to open their wallets: They spent 42% more than the new buyers in 2016, according to the report. The most popular categories for new buyers were luxury items (jewelry, watches, wine, and handbags); Impressionist and Modern art; and the decorative arts. (Contemporary art seemed a notable absence.)

Ironically, the report acknowledges that South Kensington—the soon-to-close sales branch that has primarily handled lower-value sales—is an important component of the business. Since 2014, the report says, 62% of buyers there also bought from other Christie’s locations, including its main London salesroom on King Street.

Market-watchers will get a fuller picture of how the market share has been divided up next month, when Sotheby’s releases its consolidated sales figures.
Source: artnet news 


7/19/2017

The British Art Market 2017


The Art Newspaper published a short review of Clare McANdre's Arts Economics 2017 report on the British art market prepared for the British Art Market Federation. The report states that the UK is the second largest art market with £9.2 billion in sales, behind the US market and just ahead of the Chinese market.

The report shows sales are down in the UK by 19%, while globally the market is down 17%. The UK auction market was hit hard, with a decrease of sales by 30%.BAMF report

To read the full BAMF report click HERE.

The Art Newspaper reports
A report released today by the British Art Market Federation (BAMF) is aimed at measuring the UK art trade and its impact on the larger economic landscape.

Prepared by Clare McAndrew’s Arts Economics, the report affirms that the UK hosts the second largest art market in the world, with £9.2bn in art and antiques sales representing 21% of transactions worldwide. (The US comes in first, with 40% market share, and China a close third, at 20%.) The industry employs 41,700 people directly and supports another 94,710 jobs in ancillary industries from restoration to logistics to IT. The overall contribution of the art market to the British economy was estimated at £1.46bn in 2016. This data, says Anthony Browne, chair of BAMF, “reinforces that the art market is something the government should care about”, particularly during the Brexit transition.

BAMF, a consortium that includes Christie’s, Sotheby’s and Phillips along with specialised trade organizations such as the Antiquarian Booksellers’ Association and the Royal Institution of Chartered Surveyors, last issued such a report in 2014. Since then, the overall value of the British market has declined 19%, versus a 17% drop over the same period globally. The biggest dent was to auction sales, which fell about 30%. Dealer sales, on the other hand, “appear to have been more stable, rising 3% year on year”, says the report.

The value of art imports to the UK also slipped from £4.063m in 2015 to £2.796m in 2016—largely in line with the global contraction, but a potential cause for concern when London must, says Browne, offer “a critical mass” of high-value material in order to attract international buyers. He believes that Brexit—and the abandonment of EU-imposed taxes and regulations—represents an opportunity to reexamine the nation’s competitiveness in a global context.

Still, refashioning the relationship to the continent will be thorny, and the report underscores the importance of cross-border trade for the UK market, which it says is under-estimated by official figures. “For some of the major auction houses, consignments from EU member states accounted for up to 25% of their UK sales on average”, the report says. Furthermore, between 15% and 20% of all purchases (auctions and dealers) went to EU buyers—an audience London can ill afford to lose if it is to maintain its razor-thin edge.

“The message for me is that you can’t be complacent”, says Browne. “You’ve got to create the right environment to encourage art sales and growth in the market.”
Source: The Art Newspaper 

7/18/2017

Technology and Authentication


Fellow appraiser, Xiliary Twil, ASA of Art Asset Management Group, Inc. sent me a very interesting article from the LA Lawyer magazine on art authentication and technology.  It looks at technology, including Instagram, forensic breakthroughs, fingerprint analysis for proteins, synthetic DNA, and Blockchain.

What I really liked was the authors statement on the responsibility of art professionals,

"It is now incumbent upon all players in the art field—artists, collectors, investors, gallery owners, and the lawyers who represent them—to adjust their practices in light of changing technology. The implications for due diligence are clear. While transactions involving older works will continue to rely on the laborious, time-consuming, and ultimately subjective authentication processes of the past, the path for new works will be considerably simpler."

As appraisers, working with attorneys and other fine art professionals, we need to be aware of the new technologies, what is evolving and know the new standards of practice and employ them when necessary and

The LA Lawyer reports (bold emphasis added)
THE ROBUST GROWTH IN DEMAND for investment-grade art has been accompanied by a sharp increase in litigation over questions of authenticity and provenance. This has shone a harsh light on the difficulties of conducting adequate due diligence in such a notoriously opaque and unregulated market. At the same time, several emerging technologies suggest that the dynamics of how art is created, sold, and authenticated may be due for change. Some of these technologies have enabled arms-length transactions in which works of art can be discovered, bid upon, purchased, and delivered over long distances. Others have allowed artists to tag their work at the point of creation both as a guarantee of authenticity and as a deterrent to counterfeiting. Still others are providing advanced forensic tools that can match existing artworks to their creators with a precision previously unattainable. Taken together, these new techniques and tools promise to change the very nature of due diligence in art transactions going forward.

The rise of social media has had a disruptive effect on art marketing. Instagram, in particular, has emerged as an online marketplace in which artists can display their work, dealers can market it, and collectors can discover it—all at a distance. This has, despite its benefits, increased the vulnerability of all players to sophisticated counterfeiters, fraudulent sellers, and other bad actors who thrive in online environments. Some works on Instagram have been created digitally and thus can be easily replicated by unauthorized players. Reliable ways to restrict dissemination and track ownership are now needed. But whether the artwork is digital or not, remote Instagram facilitated transactions have brought into focus the need for a new breed of advanced authentication techniques. Several have emerged to fill the void, including four possible game-changers.

Forensic Breakthroughs

Among the most promising of these new technologies, two are forensic in that they can be used on existing works to verify their authenticity. The first, anti-forgery algorithms, uses big data and artificial intelligence methods to apply “deep learning” to the materials, compositional techniques, and stylistic signatures of the artist in question. The algorithms analyze and codify the characteristics that uniquely identify an artist in order to distinguish them from those of skilled forgers. As with all artificial intelligence, the knowledge gained is cumulative—the algorithms add information over time, constantly improving their accuracy in detecting forgeries.

Peptide mass fingerprinting (PMF) uses mass spectrography to analyze proteins at the molecular level. As animal proteins have been used for centuries in paints, adhesives, and coatings, PMF identifies the unique markers that make up the “fingerprint” of a sample, allowing works to be matched precisely to similar works by the same artist. A mismatch strongly indicates forgery.

Two other nascent forensic technologies are being applied to new works, including digital art, as effective deterrents to counterfeiting and unauthorized replication. Synthetic DNA lets artists stamp an inconspicuous tag on new works. Made from bioengineered DNA material, this unique identifier can be scanned to verify provenance. The tag is tamper-proof—it cannot be removed without leaving microscopic evidence—and is linked by encryption to metadata about the work, its history, and its creator.

Blockchain, a transaction-recording technology commonly associated with digital currencies, is now being used to track the movement and verify the provenance of digital art. Just as every bitcoin transfer is permanently recorded in a distributed public ledger, the ownership data of digital artworks now can be permanently recorded in a similarly distributed database. From then on, all subsequent transactions are time-stamped and publicly linked to the database, confirming that the work has been properly licensed. Clear provenance is established at the creation of the work and securely tracked over its lifespan.

Simplifying Authentication

All four new technologies arrive at a time when the traditional means of artwork authentication are increasingly being tested by litigation. Settling authenticity claims has always been plagued by ambiguity, relying on the sometimes contradictory findings of two different types of experts: scientists performing forensic tests and connoisseurs making informed evaluations of the works in question. As lawsuits have grown in frequency and financial consequence, mistakes inevitably have been made and many connoisseurs themselves have been sued. This has caused a number of connoisseurship committees to withdraw from the practice, declining to render opinions that might subject them to litigation. In such a fraught setting, the ability to render a simple yes-or-no verdict based on dependable scientific indicators can greatly reduce the time, expense, and uncertainty of resolving authenticity questions.

It is now incumbent upon all players in the art field—artists, collectors, investors, gallery owners, and the lawyers who represent them—to adjust their practices in light of changing technology. The implications for due diligence are clear. While transactions involving older works will continue to rely on the laborious, time-consuming, and ultimately subjective authentication processes of the past, the path for new works will be considerably simpler. Artists should be advised to take precautionary measures, such as tagging their works and recording metadata, even at the earliest stages in their careers. Buyers and sellers should be apprised, in advance of any online transaction, of the more precise authentication techniques now available to them.

These new protections, when fully implemented, will bring a welcome measure of transparency to the entire art market, even as they dramatically reduce the time and money spent on due diligence and authentication. The ultimate promise is that transactions will be safer and more efficient, thereby raising productivity and profitability for all involved.
Source: LA Lawyer 


7/17/2017

Freeports


In the past I have posted numerous articles on freeport art storage and the tax incentives in using them. Artsy recently posted a very interesting article on Freeports and discusses the economic benefits and some of the various privacy benefits, but which can also cause a lack of transparency.

Artsy reports (follow the source link below for the full article)
Freeports as “Special Economic Zones”

It is difficult to imagine a reason to keep art works in a freeport unless there is speculation going on. If you are collector of fine art, you want to be able to see and to appreciate what you own. But if you are a speculator, all you need is private and secure storage, since you are betting that the work is going to increase in value. So the freeport is the perfect place to park your speculative art purchases, because they cannot be traced to you and no government can tax you on these assets.

Of course if you want to corner the market on the work of a certain artist and wait for it to escalate in value, the freeport is your best bet. Everyone in the art world has heard stories of exhibitions of young contemporary artists being bought out by enterprising collectors; Charles Saatchi’s early purchases of works by Damien Hirst and his clique of YBAs is one of the most famous examples. Such works had to be stored somewhere, and the freeport is the most secretive place to do so, with the advantage that if the work changes hands there, no sales tax needs to be paid either. It could be argued that this is all anecdotal, but opportunities are being seized and growth is expected: “28% of both the art collectors and art professionals surveyed said they had already used or had a relationship with a freeport provider, and 43% of the art professionals said that their clients were likely to use a freeport facility in the future, versus 42% of the art collectors who said they were likely to use such a facility,” according to Deloitte and ArtTactic.

As an off shore mechanism, the freeport is an expansion of the concept of free trade that, despite its name, actually tends to benefit the most privileged investors at the expense of others. This is especially visible in the development of the global economic system in the second half of the twentieth century. At this moment in history, as countries were throwing off their colonial shackles and attempting to compete in the increasingly globalized world of trade, one of the main limitations was that colonial economies were largely dependent on raw materials and cash crops and therefore, after independence came, many countries struggled with the challenge of economic independence. The biggest success stories of these years were a group of mostly small Asian countries known as the Asian Tigers, which transformed their economies through export orientation, in effect, creating, packing, and shipping what consumers in wealthier nations wanted. Singapore, Taiwan, Korea, and Hong Kong created strong economies partially through opening tax-free zones, called export processing zones, special economic zones (SEZs), or other euphemisms for providing services tax-free in certain areas in order to lure foreign direct investment from multinational corporations.

This trend has accelerated globally in the twenty-first century and has created political backlashes around the world. The burgeoning string of freeports around the world is an echo of the SEZs, demonstrating that many countries are expanding their tax-free services not just to manufacturers but to investors in luxury goods. These duty-free zones are often placed at airports to facilitate the acquisition and storage of vast quantities of luxury goods that wealthy investors do not have to pay tax on. These spaces, outside of the jurisdiction of any national regulatory body, allow art to be securitized and moved off shore, and their operations parallel in many ways the offshore financial transactions that have grown so numerous in the past decades.

Freeports as secrecy jurisdictions
The first characteristic freeports share is the concept of “secrecy jurisdictions”. In his expansive account of the development of the offshore financial world, journalist Nicholas Shaxson underlines how certain countries, beginning with Switzerland, have regulated financial secrecy as a means to ensure the discretion of the banking industry and protect assets held in these countries from external regulatory mechanisms. This does not mean, of course, that all money in Swiss (or Cayman) banks amounts to ill-gotten gains, but it does mean that no one can ever find out whether it does or not.

The Panama Papers leak of 2016 led to many revelations about the use of secrecy jurisdictions by prominent businessmen, politicians, athletes, and art world insiders. A number of articles spelled out how dealers like the Nahmad family and collectors such as Joseph Lewis and Diana Ruiz-Picasso used offshore companies to secret away art and money that could not be traced to them due to the structure of these off shore mechanisms. What is noteworthy in retrospect is that these revelations have not shown that laws were broken, nor have they exposed a complete picture of how offshore mechanisms have altered the art market.

The same is true of what is known about freeports. No one can tell if the art held in them was stolen, bought with drug money, or simply a prudent investment expected to yield great returns in time. The secrecy of freeports, combined with offshore corporate entities and the unregulated nature of the art market, means that it is very difficult to connect owners with works of art that are stored in a freeport. No government can regulate, tax, or investigate property stored inside a secrecy jurisdiction, and so, for all intents and purposes, the art in freeports becomes invisible.

This secrecy and lack of regulation are a kind of loophole in the regulation of the global economic system and international law. If you are a national government, you can charge excise tax on works of art leaving the country and traveling to another, and based on the rate you set, it is possible either to incentivize the export of works of art or to provide barriers to their export.

But to put a work of art into a freeport is not exporting it, in legal terms, because it is not entering another country. So no duties need to be paid and no laws are actually broken. Such a loophole is an inducement to arbitrage; it actually suggests to an individual how he or she can skirt the law and get away with it. Tax avoidance is the reason offshore financial centers exist, and this also true of freeports. By generating the means to avoid duties in a quasi-legal framework, it becomes very difficult indeed to enforce national laws. Individuals and corporations can game the system to ensure that their interests are served best.
Source: Artsy 


7/16/2017

Refining the Gallery Business Model


The Art Newspaper has a very interesting look at the how art galleries are dealing with the changes in how collectors buy, high overhead and gallery/artist relationships.

I have posted on some of these changes in the past, including online sales and collaborative exhibitions.  This article also looks at pop and temporary art fairs, artist co-ops (bypassing traditional or legacy gallery representation and of course online exhibitions and sales.

As I have mentioned numerous times, the art market is changing and with that collectors are changing and demanding new and innovative venues many based upon technology. As appraisers we need to be  aware of this changing landscape, and also make sure that we as a profession are embracing changed to our own appraisal practices to both accept and deal with the quickly changing market.

The Art Newspaper reports
For dealer Anthony Reynolds, the turning point came when the lease on his London gallery ran out and his landlord announced he was tripling the rent. “I thought to myself, I can either find another space or I can find a different way to do this,” the gallerist says.

Reynolds chose the alternative route and, after 32 years in three successive premises, closed his permanent venue in 2015. “Essentially I abandoned the tyranny of the single space,” he explains. “You have to keep funding it and filling it, and artists have to think about how to use it. What was more interesting was to think about operating a gallery as normal, but without a fixed space.”

Representing the same 20 artists as he did before he closed, for the past two years Reynolds has been staging exhibitions in other commercial galleries, including London’s Annely Juda Fine Art, Independent Régence in Brussels, and Àngels in Barcelona. There are further plans to show in Tehran and Tokyo. The aim is to develop “collaboration between galleries rather than an alternative to galleries”, Reynolds says, noting that costs and proceeds are usually split down the middle with the hosting gallery.

Reynolds’s story is an increasingly familiar one. Spiralling rents, buyers’ desire for investment-grade trophy works, an exhausting cycle of art fairs and a growth in online platforms mean that more and more dealers in the lower and middle echelons of the art market are eschewing bricks and mortar in favour of leaner, less permanent models.

Pop-ups and temporary shows

Eye-watering start-up and running costs have spurred a rash of pop-ups and short-term projects. In New York, rent can range from $5,000 a month for a broom cupboard on the Lower East Side to around $35,000 a month for a mid-tier 5,000-sq.-ft gallery in Chelsea. On average, says Edward Winkleman, the co-founder of Moving Image fair, a would-be gallerist will need to stump up three months’ rent plus $20,000 to $100,000 in building costs before they can move in.

The lease term poses another conundrum. “The typical lease for a gallery in New York is ten years,” Winkleman says. “Some landlords will offer shorter ones, but you have to balance the risk that, after it ends, they’ll jack up the rent, versus the neighbourhood evolving to where you no longer wish to have your gallery there.”

Then there’s the flip side: a too-short lease. “A year to five years is now common in London,” says George Marsh, the co-owner of William Benington Gallery, “but I recently saw one lease offered till the end of this year. It’s impossible to build a programme or any level of trust with artists or clients in such a short time.”

Marsh closed the contemporary British sculpture gallery in January to focus on a sculpture park in Buckinghamshire and collaborative exhibitions in London. He now plans to buy a residential home where he can incorporate an exhibition space. “It will solve the problem of people not being able to envisage how large-scale sculptures can work in domestic settings,” he says.

Converting living rooms and bedrooms into temporary galleries is just one way that dealers are coming up with ways to adapt and survive. Car parks, hair salons, arcade bars and the backs of vans have also doubled as ingenious, if cramped, exhibition venues.

Since closing his permanent London space after 16 years in March, Magnus Edensvard, the co-founder of Ibid Gallery (which also includes a four-year-old Los Angeles location), has organised a show of David Adamo’s sculptures in the lobby of an 11-storey corporate headquarters in the City of London. He is now planning a travelling exhibition on a boat on Regent’s Canal this summer.

Joel Mesler started dealing 14 years ago and in that time has pitched back and forth between pop-ups and more permanent galleries, including Untitled and Feuer/Mesler. In May he relocated from Manhattan to East Hampton on Long Island to open a seasonal gallery that caters to A-listers and collectors with summer homes in the stony beach enclave.

“Because of art fairs, selling months in the city are becoming smaller and smaller. Most of the summer is dead,” Mesler says. “This way I can have an off-season in the Hamptons to do whatever I want, including my own painting.” In a video advertising his new gallery, Mesler describes the move as going “back to the mom-and-pop… and the love of art”.

Mesler is returning to his roots in more ways than one. His new gallery is called Rental, the name of the gallery he first founded in Los Angeles in 2004 and then in Manhattan in 2007. Like his original venture, Mesler will not represent artists, plumping instead to have a more flexible approach to programming.

“The art world feels more Darwinian than ever; it’s about survival and adaption,” he says. “Because of the decimation of the mid-tier, there’s a push to forge these new grey areas. Models like Rental are successful when the art market is in flux.”

Artists bypassing dealers

Popular in the 1960s and 1970s, ad hoc artist-run spaces are once again proliferating. Artist Lola Bunting set up the non-profit 53 Beck Road in the front room of her parents’ terraced house in Hackney, London, in 2013. “I started it in response to the lack of non-commercial spaces for artists to exhibit in London,” Bunting says. “I wouldn’t say I operate completely outside of the art market, but my aim is not to become a commercial gallery.”

Beck Road has a celebrated past as an artist co-operative. Bunting’s parents, Karen and Peter, along with dozens of other artists, including Helen Chadwick and Cosey Fanni Tutti, moved there in the late 1970s as a short-term solution to a housing shortage. The road was slated for demolition, but in the late 1980s, with the support of Acme Housing Association, the artists on Beck Road were granted permanent residency. The London dealer Maureen Paley opened her first gallery there in 1984.

“There’s a sense of things being cyclical,” says Holly Willats, who is co-organising an exhibition at 53 Beck Road with Bunting called House Work (until 9 July), which responds to the history of the location. “Despite the overwhelming difficulties, artists are finding new initiatives to continue to make and exhibit their work,” she says.

Willats, the founder of Art Licks Weekend, an annual three-day festival featuring emerging artists and young galleries across London, says that 10% of exhibitors last September showed in domestic settings—“a noticeable spike”.

Artists in New York and Los Angeles are also doing it for themselves. Canada is the most established artist co-operative in Manhattan, having opened in 2000. More recent additions include Park View Gallery in Los Angeles, which the writer Paul Soto runs out of his MacArthur Park home, and Teen Party, which the writer and editor Scott Indrisek launched in his Brooklyn flat last year.

For its sixth edition in September, the Amsterdam-based Unseen Photo Fair will have a new section, Co-op, featuring 13 artist collectives and artist-run initiatives, including Britto Arts Trust from Bangladesh and the Colombian Colectivo +1. For those exhibiting in this section, the cost of travel and some materials are covered by the fair. By comparison, a booth at Photo London can cost £30,000—a prohibitive sum for those without gallery representation.

“Until last year, it was a condition that exhibitors had to have a physical space, but we are undergoing such a massive shift in the gallery world that fairs are absolutely going to have to reflect that,” says Emilia van Lynden, the artistic director at Unseen.

From bricks to clicks

Many markets have migrated online since the digital revolution, but for the most part, the value and uniqueness of the art object means it has remained resistant to being bought and sold on the internet. The 2017 Hiscox Online Art Trade Report suggests the future of the digital art market will be dictated by existing players, such as auction houses, rather than a digital disrupter.

But Tze Chun, who founded the web-only gallery Uprise Art in 2010, has not been deterred. When she launched, there was a huge gap in the market for a “true gallery model” online, Chun says. Going against the grain, Uprise Art sells original works rather than editions, which tend to sell better online due to their reproducibility and affordability. For example, Twyla, a startup founded in 2014, sells exclusive prints, ranging in price from $1,000 to $5,000. The London-based Counter Editions similarly commissions and produces prints and multiples.

Chun has structured Uprise Art to serve artists in much the same way a physical gallery would, representing artists and offering feedback and career advising, marketing, and exposure through art fairs and exhibitions. To convey a sense of uniqueness to clients, Uprise Art’s website offers bespoke consultations with art advisers, free of charge. It also has a page dedicated to artists’ backstories, which “adds a personal touch”, Chun says.

Aligning her online model with the experience of walking into a gallery and discovering something new, Chun chose to have no filtering or sorting on the website. “It’s the opposite of Amazon Art,” she says. Prices range from $100 up to $50,000, while an entire section of the website features works under $800.

Despite making a profit early on, Chun concedes “it is still a pretty tumultuous landscape for art online”. But she says that, as people become more familiar processing visual information online, collectors are becoming more comfortable buying via the internet.

Ultimately, however, it seems there is no substitute for the real thing. “Collectors are not looking for a product, they are looking for an experience,” Chun says. “and an original work of art offers exactly that.”
Source: The Art Newspaper


7/13/2017

Physical Ownership vs Copyright


Mark Bench of Borro sent me this interesting Artsy post about the estate of photographer Vivian Maier. I found this very interesting as the main issue of the estate is physical ownership vs copyright in this case for photographs. If not expressly granted in writing, the artist (or artist estate) retains the copyright. I found this very interesting as a few years ago I was involved in an archives of some recordings for a donation. I continually asked about the physical ownership of the tapes vs the copyright on the recordings. I was looking for an attorneys opinion for clairty, but the client did not wish to go there, so based on that and a few other issues, I passed on the assignment.

Artsy reports
On June 30, the executor of Vivian Maier’s estate filed a lawsuit against three commercial galleries exhibiting and selling the late photographer’s images. The executor charged that the collector who lent the pieces to the gallery may have owned the physical images themselves, but did not hold the rights to display or sell the pieces. The case is the latest in a long-running legal dispute over the rights to photographs by Maier, who died penniless and without known heirs. The suit also highlights a crucial aspect of copyright law: purchasers of a physical artwork are restricted in their rights to sell and market the piece.

From a Storage Locker to The World Stage

Until her death in 2009, Maier lived an inconspicuous life bouncing between homes in Chicago’s affluent Northern suburbs and working as a nanny. The children she nannied for describe her as a unique personality, a feminist and film lover, who spent her free time wandering the streets of Chicago. There, she took tens of thousands of photographs that she kept largely to herself. In the later years of her life, most of her photographs and negatives wound up in storage, completely unbeknownst to anyone but Maier herself.

In 2007, Chicago real estate developer John Maloof purchased the contents of Maier’s storage locker at auction without knowledge of what he would find inside. Many storage companies require their tenants sign agreements that forfeit all their rights to the unit’s contents if they fail to retrieve them. But Maier never signed such an agreement, so Maloof’s acquisition of the storage unit was limited to the physical property inside.

That included around 100,000 negatives and slides, including thousands of undeveloped rolls of film. Maloof quickly realized the genius of Maier’s work and sought out gallery representation. He even helped to direct an Oscar nominated documentary about her: Finding Vivian Maier. In 2016, estimates put Maloof’s share of the existing Maier portfolio at around 90% of all her works. Meanwhile Jeffrey Goldstein, another Chicago-based collector, also began to amass a collection of Maier’s works. Maloof and Goldstein’s ownership was however, legally limited. In order to commercialize the photographs they would need to obtain permission from the copyright holders.

Physical Ownership vs. Copyright

The tumult surrounding Maier’s estate boils down to this issue: the distinction between physical ownership of a photograph and copyright ownership. Under U.S. law, copyright encompasses the author’s right to its first sale or rental, reproduction, creation of derivative works (such as prints), and public exhibition of the work. Such rights can only be transferred in writing. During her lifetime, Maier held the copyright to her work (which is always the case unless an artist assigns or sells those rights to another).

While Maier had relinquished her property rights to the objects left in the storage unit, she still held the copyrights in the absence of a written document explicitly stating otherwise—and such copyrights endure for 70 years after an artist’s death. Accordingly, because Maloof and Goldstein owned the physical negatives or photographs and not the copyright, their ability to exploit the work commercially without the copyright owner’s permission is limited to selling only that physical copy that they had, themselves, purchased.

In 2009, Maier died without a will or any known relatives who would be the heirs to her estate. Aware at this time that copyright in the images would pass to Maier’s heirs, Maloof conducted multiple genealogical studies to find an heir from whom he could purchase Maier’s copyright, eventually uncovering a distant cousin, Sylvain Jaussaud. Maloof reportedly paid Jaussaud $5,000 for the rights to Maier’s works.

But in 2014, Francis Baille, another cousin of Maier’s, sued the Estate to be named as a beneficiary. The lawsuit cast doubt on who should control the Estate, leading a probate court to appoint the Cook County Public Administrator to supervise the estate. Goldstein, and likely other owners of Maier’s works, at that time received notice from Maier’s estate that they were attempting to discover and recover assets owned by the estate. Meanwhile, the probate court has yet to determine Maier’s legitimate heir.

Maloof settled with the estate in 2016, though the terms of the settlement remain confidential. Goldstein took a bolder approach in dealing with the estate. In late 2014, after being contacted by the administrator on behalf of the estate, Goldstein abruptly sold much of his collection of Maier’s negatives to a collector in Canada, intentionally complicating the estate’s investigation of his potentially infringing activities. In particular, the Maier estate would want to review the negatives to determine those prints that were infringing reproductions. In an interview referenced in a recent complaint, Goldstein has maintained that he “would cut [his] wrists” before cooperating with the County Administrator.

Who Gets to Profit

Goldstein maintains that his skillful printmaking and talented staff are an added value, such that providing the estate with the income from his sales of Maier’s work would unjustly enrich the estate. In an interview with the Chicago Tribune his attorney articulated this sentiment, saying, “how fortunate it is that this stuff fell into the hands of people who actually knew what to do with it...Otherwise it might still be in storage somewhere.”

While a fair statement, it carries little legal weight. Copyright law does not recognize Goldstein’s contribution as a “new work” that would allow him to sell the pieces. The probate court has also disagreed with Goldstein’s argument. In 2016 it dismissed a counterclaim from Goldstein, who argued that the estate would receive “unjust enrichment” by payment resulting from his commercialization of the works because his actions had created the value in connection with the copyrighted works. After failing to come to terms with the estate, the Cook County Administrator sued Goldstein for copyright infringement. The administrator alleged that Goldstein had generated “up to $500,000 per year in annual revenue from print sales and other infringing activities.”

On June 30, Maier’s estate filed a new complaint against several galleries with which Goldstein entered into exhibition and consignment arrangements. Two of the galleries named in the complaint are foreign: Galleria Cons Arc in Switzerland and Leica Gallery Warszawa in Poland. The third gallery is Chicago-based. Several long-form agreements submitted with the complaint provide evidence of Goldstein’s grant of permission to the galleries to sell prints on consignment. They also expressly indicate that Goldstein retained all legal rights to the prints until they were paid for in full by the galleries. To the extent Goldstein never owned the legal right to sell the prints, these galleries could have a claim against him for his fraudulent assertions.

As the probate court attempts to determine the conclusive identity of Maier’s heirs, one key finding will be if closer relatives are found. While the cousins Jaussaud and Baille appear to be genuine, their ownership share of Maier’s estate could be non-existent if a more direct relative is found. Several years ago, it was reported that the search was focusing on finding relations of a long-lost brother, Charles, who died several years ago in New Jersey. Until those heirs are determined, the Cook County Administrator will continue to serve as the supervisor of the Maier Estate.
Source: Artsy