Many people enjoy art, but just how large and significant is the art marketplace?
A good place to start is to consider how many people elect to visit a museum. The Metropolitan Museum of Art in New York, one of the foremost encyclopedic art museums in the world, welcomed a record seven million visitors in 2016, up two million from 10 years ago. The top ten art museums in the world based on attendance had a combined fifty-six million visitors in 2016, the equivalent of running eight sold-out Beyoncé concerts every day for a year at Madison Square Garden. Experiencing and appreciating art is clearly something with broad and growing appeal.
Looking is one thing, but buying art is another level of commitment. Global spending on art and antiques is quite substantial. Approximately $57 billion worth of objects were sold in 2016, as reported by Art Basel and UBS in a recent research report. This is the equivalent of about fourteen times the sales of Tiffany’s and thirty times turnover at Ralph Lauren.
Where do people buy art? Based on the value of the objects sold, the market is roughly evenly split between art galleries and auction houses. This has been true for many years. But if we use the number of objects sold rather than value, sales through galleries represent the lion share of global sales activity. This is due to extraordinarily valuable masterpieces being sold more frequently at auction, inflating the sales total in that channel.
What type of art are people buying? Detailed numbers only exist for auction sales. Based on the Art Basel/UBS report, Post War and Contemporary art was the most important, with 52 percent of the sales value. Modern Art was the runner up at 23 percent, followed by Old Masters at 13 percent, and Impressionism and Post-Impressionism at 12 percent.
What do people spend to buy a piece of fine art? Less than what you may think. Art Basel/UBS estimates that 94 percent of auction sales were associated with objects worth less than $50,000. But these works of art only represented around 10 percent of the value of auction sales. About 2,500 objects sold for more than $1 million in 2016, representing the majority of the value of auction sales.
How many artists sell at auction? While it varies year to year, Art Basel/UBS estimates that work by around 48,000 living and deceased artists sold at auction in 2016. While this number gives a sense for the breadth of the market, the much more interesting story is that approximately five hundred artists made up the majority of total auction sales. Like many talent markets, the art market is “winner take all,” where the top names capture most of the rewards, and the rest sell for far less.
Doug Woodham is the Managing Partner of Art Fiduciary Advisors, an advisory practice based in New York City that helps clients create legacy plans for their art collections. The firm offers comprehensive services, from clarifying family goals and evaluating alternative disposition strategies, through the execution of donation and sale agreements. The firm also advises collectors, artists, and institutions on the sale of art so they can be assured of maximizing sale proceeds in a very complex and opaque art marketplace. Earlier in his career, Doug was President of Christie’s for the Americas and a Partner with McKinsey & Company. He is also the author of the best-selling book Art Collecting Today: Market Insights for Everyone Passionate About Art (2017).