Thinking about galleries—individually and as an art-world sector—is a constant inside Art Basel. The organisation was founded by a handful of Basel-based dealers and remains very much driven by gallerists. Those who sit on our selection committees play a pivotal role for the fairs. We also strive to stay in close contact with the 500-plus galleries around the world that do our shows, hoping to serve them by gauging their present challenges and working towards their futures.
I gave a lecture at the Talking Galleries Conference in Barcelona at the end of last year, at a starkly transitional moment within the art world, and posed ten questions that every gallerist should be considering seriously because the answers they find will define their future.
1. Are connoisseur collectors a dying breed? Gallerists frequently complain that the people visiting their booths and galleries know much less about art than before. What happened? In part, it seems simply a symptom of how fast the art world has grown; by definition, that means a lot of new collectors. Most do not come from families with a legacy of art collecting. Just as importantly, even the most experienced and engaged collectors today tend to have far less time for art than their predecessors. As the author Chrystia Freeland wrote in her brilliant 2011 article The Rise of the New Global Elite, in the Atlantic: “In 1916, the richest 1% of Americans received only one-fifth of their income from paid work; in 2004, that figure had risen threefold to 60%.”
The super-wealthy no longer represent the leisure class, at least not as the American economist and sociologist Thorstein Veblen defined it. The newer art buyers at our fairs are often actively running hedge funds or start-ups; they may be super-wealthy, but they also are super-busy. However much they may be interested in art, they are rarely able to devote their Saturdays to visiting galleries. Instead, many use intermediaries to do their research; that’s why the ranks of art advisers are swelling so fast. Many of them also buy heavily at auction; it’s a quicker process and it feels more transparent to them, even if insiders know better. This deep demographic shift in wealth also explains why art fairs have grown to such importance: because they so efficiently offer the time-stressed collector an overview of an ever more global market.
All this means that gallerists will need to rethink what happens when a potential collector actually sets foot in the gallery. To be a successful gallerist 20 years from now, you must throw out the old ways of playing upon social hierarchies. Having people at the front desk who don’t smile is not going to work; nor is telling people that their collection is not good enough for your artists. They will find another way, and your artists will suffer in the process.
2. How many art fairs should I do? My favourite moments in my job include going to a young gallery, one that has never been in our fairs (or is afraid to even apply), telling them they are ready and then seeing them get in. Working in the right way with those young galleries is crucial because they all skate constantly along a razor’s edge. One of their trickiest dilemmas involves fair strategy; as soon as they develop a good reputation, the fair directors start recruiting them, which is hard to resist, yet it diverts immense amounts of time and money from their gallery programme.
In their hearts, many young galleries know that they are doing too many fairs. But they fear—and rightly so—that if they do not participate in enough fairs, their hottest artists will jump to bigger galleries that can give them global exposure. This phenomenon actually forced us to totally rethink how Art Basel handles its three sectors for emerging artists. We used to consider artists who had shown at other fairs as being no longer “fresh”. But then we realised that the effect was that young galleries ran out of good artists with whom they could apply, so they did not get in and then they lost their artists. We tore up the regulations and started again. Now, we focus on whether the work proposed is “fresh”, rather than the name of the artist.
The surging number of new fairs compounds these dilemmas. If you have a big gallery, you have a fair team that never stops going to fairs. But if you’re a mid-sized gallery, how do you decide between all these options? Talking to gallerists, you see them growing far more strategic: doing solo booths, for example, because that involves asking only one artist for work, and those booths have a bigger impact for the artist and the gallery. Other galleries try to do all the big international fairs—Frieze, Fiac and Art Basel—but have become much more brutal when it comes to the regional fairs. The conventional wisdom said to give a fair three years to prove itself; today, if a fair does not work immediately, galleries will not hesitate to bail out.
3. Is the art world’s speed a fatal addiction? We cannot know the answer here, because the world, and the art world, has never moved this fast. Yet it seems clear that although the goal of most successful artists used to be a MoMA retrospective at 50, many artists today focus on a career patterned on that of a football player or supermodel. Many young guns monetise their market moment, not trusting the art world to support them all the way to that MoMA show. And given the art-market history of rapid rises preceding precipitous disappearances, one can hardly fault their logic. Yet in their opportunism, these artists often destroy their own markets.
Only 20 years ago, the idea that you could auction a work less than ten years old was considered revolutionary. According to Artnet’s research, there were 3,100 works sold at auction in 2012 that had been made in the previous three years. Two years later, in 2014, that figure topped 9,800, tripling the volume of “fresh paint” hitting the auction block.
One of the most pernicious (and boring) effects of this speed was perfectly articulated by Jerry Saltz’s article “Zombies on the Walls: Why Does So Much New Abstraction Look the Same?” Jerry pointed to the young artists coming up with different ways of making something that is rectangular, hangs on a wall and looks like a painting. It could have been burned, exposed to sun, dragged through the streets or treated by some secret chemical process, but the point is that, in the end, it was an abstract square and it was sold at a very high price. This does not feel like a movement; it feels like merchandising. And a year after Jerry’s article came out, many of the artists he cited are already seeing their markets evaporate.
A lot of people bought those artists speculatively. But emerging art is not a great investment from a financial standpoint—because when it goes illiquid, it goes totally illiquid. There are artists whose works you simply cannot sell now. But how much sympathy can we have, really, for those who got burned while cynically speculating? Of the artists selling well today, roughly 80% will be basically unsellable in 20 years, which is perfectly fine. Because collecting contemporary art is about engaging with the zeitgeist. People should buy art that they believe in.
4. Can my gallery grow with my artists? One classic principle for the evolution of the gallery was that you would identify and promote the best artists of your own generation. Assuming you chose the right artists and managed their careers well, the gallery would grow to fame and fortune with them. Many galleries had fairly stable rosters, working with the same artists for 15 or 20 years. This is no longer the case; successful artists often jump to established galleries after only a few shows. Oscar Murillo going to David Zwirner is the oft-cited example, but he is hardly alone. And the biggest galleries will be more open to testing young stars as the auction houses muscle ever more into the mega-galleries’ blue-chip territory.
Those “betrayals” are a huge fear for young gallerists, and many ask me what they should do. First, I tell them: “Pay. Your. Artists.” (Artists, even the hot ones, often get paid last—sad but true.) If you feel as though an artist might leave you anyway, try to keep some of their work for yourself; when that big gallery comes in and jacks up their prices, you have at least woven yourself a silver lining.
What does this mean for galleries? It means that in the long run, galleries have to build their identities not around a generation, but rather around a set of ideas. Many galleries are starting to do this, mixing generations freely. For example, the 82-year-old painter Sam Gilliam is in the programme of David Kordansky, the Los Angeles-based gallerist who first defined himself as a spotter of great young artists.
5. What does Simco mean? The New York Times once described the Los Angeles-based collector and adviser Stefan Simchowitz as “the art world’s patron Satan”. Many people dislike him, but gallerists disregard Stefan at their peril. He has successfully “disintermediated” the traditional gallery process by regularly identifying good young artists, such as Petra Cortright, Amalia Ulman, Parker Ito and Jon Rafman, early on. Before they sign up with galleries, he starts setting up shows for them and buying enormous amounts of their material, in the same way that Charles Saatchi used to do. He goes
to artists’ studios and then publicises the work by putting it on Instagram.
Stefan has been highly transparent about what he has to sell, and less difficult about whom he sells it to. That appeals to the newer buyers whom classical galleries would force to wait in line, and he has built up a collector base of people who love his renegade style. Nobody else has access to them and they buy a lot of art.
Working in this way, Simchowitz has shown the power to make markets because he is able to identify which artists will be popular, sells them well and moves much faster than most galleries do. But his ambitions go further. Last year, he launched Simco’s Club, offering services very similar to those of a traditional gallery: artist management, client representation and trading art. If you’re a gallerist, study this closely. And think about what you must do differently—both differently from what you did before and differently from what Simco does.
6. Will the auction houses leave any gallery terrain untouched? The turf war between galleries and auction houses is not new, and to some extent, it remains focused at the highest end. In 2014, 48% of the auction volume was generated by barely 1,500 works, according to The European Fine Art Fair (Tefaf) report by Clare McAndrew. Huge numbers are compiled around a small group of artists. Everyone knows that if you’re representing Christopher Wool and his work comes up for auction, you may suddenly need to find a few million pounds to make sure that it does not go unsold. Auction houses have also tried, usually quite unsuccessfully, to rival galleries by representing artists directly.
But there’s a less well known, and far more dangerous, side to this phenomenon—because today, artists whom many collectors have never heard of are being sold at auction. Tanya Leighton, a gallerist in Berlin, recounted a situation she faced with one of her hottest artists: auction houses called her to say that they had a work by him coming to auction, but also making clear that they did not know which collectors to approach. Put yourself in Leighton’s position. There is a limited amount of the artist's work and her gallery is not the only one representing him. There are also a limited number of collectors. Leighton is not getting a commission from the auction house, but if she does not rally her collectors, the work might crash. For a young artist, that’s potentially disastrous. Suddenly, Tanya is working as an unpaid de facto sales agent for the auction house!
Simon Preston, who owns an eponymous gallery on New York’s Lower East Side, had an equally unpleasant experience with one of his artists, John Gerrard. A work that should have been priced at £80,000 was put into an auction at £8,000. Collectors started freaking out, calling Simon to ask if the artist’s market had collapsed. The reality is that auction houses are not vested in the careers of young artists, but their mistakes can destroy those markets forever.
All this points to a weakness of the deliberately opaque gallery system: because only auction sales are publicised, the auction houses function as the trade’s paper of record. To some extent, the galleries are at the mercy of what goes on in the auctions, and that’s not a good thing. We have to ask ourselves: is it really such a good thing for galleries to hide their sales results so much?
7. Will the art world merge with finance? The art world has been talking about art funds for years. Let’s be clear: most of them fail. At one point a few years back, there were 38 art funds floating out there, but in the end, it was really only the Fine Art Fund that survived. Why? Funds usually rely on advisers, and advisers are more likely to buy the most promising works for themselves, often with private backers, than for a fund.
Yet there are now two interesting art-finance developments. The Carlyle Group, one of the world’s most important private equity groups, recently announced a new initiative, Athena Art Finance, that will lend money to people who have works worth more than $500,000. Then we have Levart, founded by Carlos Rivera, the Los Angeles-based entrepreneur who previously launched the provocative Art Rank site with broker-style “buy/hold/sell” ratings for hot artists. Levart is the same concept as Athena, but at a much lower price level: it loans against art worth from $5,000. It functions like a payday loan in the US: you can have your money tomorrow! I am guessing there is another angle here. Maybe Carlos is interested in big data, and the more work he is getting offered, the better his data. If seven people are suddenly offering him work by the same artist, for example, it probably means that that artist’s market is fading.
To me, when one of the most important finance groups in the world and a Los Angeles-based internet start-up launch similar projects, it means that finance will be a bigger part of the future art world. And I am not sure that this is necessarily bad for galleries; in theory, at least, liquidity is good. Perhaps smaller galleries will use art that they own to finance new production for their more ambitious artists, rather than losing them to galleries with deeper pockets. Now, we all know that many gallerists feel that the art world they chose has eroded or even evaporated. But professions change and you have to face this reality: the more successful your artists are, the more you’re going to have to understand finance.
8. Does Instagram replace Artforum ads? Art fair booths? My gallery? Me? Obviously, Instagram can serve as a great form of visual promotion. I am willing to bet that a big-data analysis of the format of works being created by today’s young artists would reveal many more square works than before Instagram launched. Why? Because the artists are unconsciously responding to which works get more “likes”—or even sell best—in Instagram’s square world.
So does Instagram replace an Artforum ad? Maybe, although many artists demand full-page ads in Artforum when they move to a new gallery. Does Instagram replace art fair booths? People are selling works over Instagram to the same kind of global audience that you try to reach via a fair, and they are having virtual “conversations” with those people. But they’re not the same kind of dialogues that you have in person.
Can you avoid having a gallery if you have a hyperactive Instagram account? Certainly, Stefan Simchowitz sells a lot of work without having a gallery. For a secondary-market dealer, I think it could certainly be the case; you broadcast on Instagram the work you’re trying to sell to anyone and use direct messaging for pieces you do not want to burn through over-exposure.
Does it replace the gallerist? There will surely be artists who will successfully sell their own work on Instagram. But I think most artists prefer to create art rather than spend all day direct-messaging random potential patrons. And I believe that the best way to sell art is to stand in front of the work with the collector. Fairs and galleries still work, because there is something simply primal about how you build the relationships that enable you to sell art in a market based entirely on perception.
9. Do I need to be paying rent for a gallery space? People have been predicting the death of the gallery forever and lamenting the fact that nobody visits them any more, but major galleries are building new spaces all over the world. Many galleries on the Lower East Side in New York have already graduated to a second, much larger space. And Los Angeles has major global players arriving in force.
Why? Because of the artists, who want to work within specific spaces and not just for fair booths or iPads. Artists choose galleries to a large degree based on the spaces they can offer: the size, the architecture and the neighbourhood. I often advise galleries to change spaces every seven to ten years, because by then, their artists have already done two or three shows in the space, and it can rarely inspire them in the same way any more. So expansion and change of location have real value in terms of keeping things dynamic. If you do a lot of fairs, it is easier to take unsold work from your gallery shows to a fair than to constantly ask artists for more work destined for fair booths. To generate inventory and to keep your programme exciting, the gallery space remains a sine qua non, even if it’s hugely expensive.
10. Should I continue being a gallerist? I can’t give you an answer but I hope you find one. My favourite book about the art world is Pizzini, by the legendary Italian gallerist Massimo Minini, featuring dozens of vignettes about the artists he did and did not work with. Read this book in your darkest moments as a gallerist; it will inspire you to live a life with great artists and collectors. Because as much as they may get a bad reputation, there are still collectors who rank among the most sophisticated, interesting, philosophical people I know; collectors like Harald Falckenberg, who has deeply studied and written about what it means to be a collector.
I think being a gallerist can still be amazing work, if you can find the collectors whose intellects are alive, buying with their eyes and not their ears. Even in China, which was dominated five years ago by the auctions and the four “Auction God” painters, there is now a new class of younger patrons. These newer entrants to the art world understand that when you buy from a gallery, you support the artist and become part of an ever-deepening dialogue. And no matter what else changes in the world and in the art world, that type of conversation, that vibrant talking, will remain the essential part of what it means to be a great gallerist.
• To watch the full version of this talk, along with a Q&A with Georgina Adam of The Art Newspaper, visit tinyurl.com/jpnsr47