Thefts USA

Gallery system is structurally weak

A new report by the non-profit dealers’ federation Cinoa finds that fair-led and online business is taking over as the main source of revenue

Gallery visits are declining with the rise of art fairs, according to Cinoa's report

BRUSSELS. The traditional gallery model is in decline, according to a new report by the non-profit dealers’ federation Cinoa (Con­féd­ération Internationale des Négociants en Oeuvres d’Art), which found that fair-led and online business is taking over as the main source of revenue.

Gallery visits are declining as the art market expands to new international centres served better by art fairs or electronic media.

“We do much more business at the fairs than at the gallery—no question,” said Dominique Lévy, the co-director of L&M gallery.

András Szántó, consultant and contributing editor to The Art Newspaper, said: “The fairs have done very well in exploiting a structural weakness of the gallery system—it is inchoate and based on local markets.” With the withdrawal of those markets during the downturn “the overall weight has shifted to clients who don’t live where you work—so you service them through art fairs,” said dealer David Zwirner.

According to a recent report from Capgemini, the Asia-Pacific region has overtaken the west in terms of the number of individuals with investable assets worth $1m or more. It is no coincidence that the Hong Kong art fair, Art HK, in which Art Basel bought a 60% stake in May, attracted such a stellar line-up of western dealers this year.

The growth of fairs brings with it huge pressures for dealers to fund travel, staff fairs and find enough material. Whether the traditional gallery model can sustain all this outreach remains to be seen. Some think not. “It is more convenient and inspiring to work in a more unconventional format, having an office and platform, and doing temporary projects and pop-up shows,” said Berlin dealer Matthias Arndt, when he announced earlier this year that his gallery would now open only sporadically for shows.

“We are in a major systemic shift,” said Szántó. “The expansion of the auction business and art fairs is adding a whole layer above the gallery system as it evolved in the 20th century.” A handful of galleries, including Gagosian, Hauser & Wirth and David Zwirner “have pulled away from the pack, but the question is, where does that leave the regular rank and file gallery?” he added.

Dominique Lévy is sanguine. “The proliferation of fairs is ridiculous. They will strangle each other in the end,” she said. She suggested that the old-fashioned benefits of a gallery may, in fact, be key to their survival. “The secret is to inform new buyers of all the options—and galleries offer a special service, whether it’s taking care of shipping, hanging works, advis­ing on exhibition loans, refram­ing or insurance. Collectors will realise [this],” she said, but added that it “may be later [rather] than sooner”.

Several web-based ventures, including the VIP art fair, and Paddle8, have recently emerged. However, dealers remain to be convinced that online business will work for expensive art. “There’s a lot of potential for cheaper works…but nobody is going to spend a huge amount on a work without seeing it,” said the New York-based, secondary market specialist Christophe Van de Weghe. “The comfy price limit is $100,000,” confirmed Alexander Gilkes, the co-founder of Paddle8.

More from The Art Newspaper


8 Jun 12
17:34 CET


What is not mentioned here is that the digital galleries will now broaden the buyer base. People who never would set foot in a physical gallery will be more likely to get exposure to digital outlets because there is no phoney spell of exclusivity. The mega-rich will always want a Gagosian or Zwirner to stroke them or a Sotheby's to play out their glitzy social costumes in. But the art market will now have a long tail far too immense for the 20th century 'patronage' model to be able to impose its stultifying order and lesson of mass inferiorty on.

10 Apr 12
14:38 CET


Is the gallery structure weak or is just the world economy is weak? If the economy was more robust sales in brick&mortar-type galleries would be lifted. People with money have less time to visit different art galleries--the art fair (which has been around for many decades - Art Cologne 30+ years) is the trendy way to spend a mini-vacation couple of days viewing lots of art at one time. Being online is fine, but nothing beats seeing the art in person. Art does not scale well on the internet. One can not feel the size of a 10 foot painting in a 300 pixel jpeg web file. Galleries will always be with us. The internet will cause more consternation between galleries than between the artist & a gallery.

26 Sep 11
19:33 CET


As a seasoned, professional artist, gallery owner, website designer and author, I can say, from my experience, that the world of art has changed dramatically in the last 5 years. Artists are becoming more marketing savvy, and find many options for selling their work, just as art dealers are using art fairs, the web and popup spaces for attracting buyers. My book "Talent is Just the Beginning - an Artist's Guide to Marketing in the 21st Century" is getting rave reviews and selling like hotcakes on Amazon. Artists are emailing me to say how the book has "jumpstarted" their careers.

8 Aug 11
15:7 CET


The gallery is now slowing down the artist by being a gatekeeper. They are now locking buyers out, not bringing them in, thru the gate cos their gate mentality is just too small now - when the whole world could walk thru it. Galleries who insist on being the sole representative - their days are definitely numbered, and those that can't "get" the net, are nailing their own coffins. And not before time. Its like with the record companies and their artists - the net's here, go be artists without boundaries.

5 Aug 11
14:57 CET


A lot of newer artists today see the gallerist's role in the future as being more of a 'broker' or consultant to the buyer, rather than being a gatekeeper to the artist. Today, the dollar speaks louder than anything and the Gallerists' value is fading fast in old school paradigms. Brick and mortar is expensive, yes, but if the gallerists insist on taking 50% or more from an artist's livlihood, and restrict access and the ability of the artist to market and sell their own art, they become an impediment rather than an enabler. With the internet and social networking, artists are finding that they have more control over their careers and the price that they are able to charge. Collectors are educating themselves more in the same venues that the artists play in. Artists need brick and mortar less than exposure, connections and access to Collectors. It will be interesting to see what the next 10 years bring to this system.

4 Aug 11
21:29 CET


Rachael, you are probably right--there will always be a need for personal relationships and the insight of those both invested and knowledgeable about the work. But the point is this can happen without a brick-and-mortar presence. What suffers is the art of the exhibition. What we gain is flexibility and nimbleness and new types of art presentation that only some are just beginning to imagine.

3 Aug 11
15:7 CET


I managed a 5K sqft gallery on the Strand in Galveston for 8 years. Sales were down after 9-11 and never recovered. Hurricane Ike shut us down with 6 ft of water in the Gallery. I am ready to take this act on the road or the net. Thanks for this article.

2 Aug 11
15:6 CET


We deal in emerging artists who can afford to leave no stone unturned. Gallery sales, art fair recognition (clearly this kind of audience is the bullseye in the target market) and online exposure and sales all play a role.

2 Aug 11
15:6 CET


We have had good results as a physical gallery that also does art fairs. It is a serious investment, but its an opportunity to meet collectors in person who might not find the gallery otherwise. Art needs to be seen and experienced in person. We have over 535 works of art in our gallery, more than could be exhibited at an art fair by one gallery.

1 Aug 11
15:1 CET


Wow. What a surprise. They just got around to figuring out that " visits are declining as the art market expands to new international centres served better by art fairs...?" Congratulations on informing us what was readily apparent at least half a decade ago.

1 Aug 11
15:1 CET


It going to be very interesting to see how this all pans out especially during the GFC. Currently a number of small to middle sized Galleries are closing down but still no shift in the larger galleries. I just can't see the bigger art buyers doing most of their work on line. To much money is at stake and being smoozed by the Gallery owners is always fun. Augustus Firestone

1 Aug 11
15:1 CET


The online gallery might work best for prints and photographs and other multiples, where their quality is somewhat understood by the collector. But a dealer builds a relationship with a collector that can't be replaced by a website --by advising and offering insight, information and opportunities. I am of the opinion that the gallerist will prevail.

28 Jul 11
19:11 CET


The online art gallery is still a work in progress whether it be for affordable or expensive art. One critical success factor might be one mentioned in this article: provide key traditional gallery after sales services, such as framing, etc.

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