A Blurring of the Primary and Secondary Markets?

The Wall Street Journal is reporting that Sotheby's has recently announced it will auction new works of art by artist Damien Hirst at a mid September sale in London. Prior to this sale, Hirst was represented by galleriests Larry Gagosian and Jay Joplin . Sotheby's expects the Hirst sale to gross between $100 and $200 million for the 56 works which will include paintings, preparatory drawings, and formaldehyde sculptures (yes that's, correct formaldehyde sculptures, or as the WSJ article calls them "pickled animal carcasses" ).

Hirst typically sells through galleries, and the article states the gallery system is still needed. The WSJ asks the questions "What does it mean for the art market that a living artist bypasses dealers altogether and sells his wares directly at auction? There is some speculation that this might be a pivotal moment, like the end of the studio system in movies or the continuing decline of the record labels in the music business. Could the gallerist's traditional role as mediator between the contemporary artist and his market be passé?"

Only a very select few of artists have the name recognition and following to make an end around galleries, and the gallery system is still needed for the building of artist reputations and also for added discretion and privacy should it be requested by the purchaser. At least for the dollar values estimated by Sotheby's.

As appraisers, we have been taught that the primary market (such as galleries) was where new property and creations, such as fine art is sold, and the secondary market, including auctions typically resold property. This recent development now blurs the markets a bit further. As the antique and collectible market changes along with technological advances such as online bidding, more and more private collectors are buying directly from auctions, either online or live and are bypassing the gallery/dealer networks. Appraisers should monitor this type of market change, and although it may not be coming in the near future, I would expect some lesser known artists will eventually test the method (especially those who excel in self promotion and marketing), and at least attempt to bypass the gallery system by going directly to auction.


To read the full Wall Street Journal article, click HERE.