Economics of art fairs. Is it worth the investment?

If the gallery is not burdened with high participation fees they are more likely to take a risk on what they show and perhaps display less commercial work.  

Part II of my article on the rise of the global art fair model. Is it sustainable and is it worth the investment?

Is the current model sustainable?

All this could be yours. Frieze New York 2014, Photograph by Kristina NazarevskaiaEven though two of the panel’s members started their own art fairs (Independent Art Fair and Moving Image art fair) the consensus among the participants was: probably not. If history is any indication, and it usually is, fees for fairs like The Armory, Art Basel and Art Miami will continue to rise, causing participating galleries to raise prices, further inflating the market and forcing smaller galleries to cease participation. In this vacuum, and because galleries on average reportedly earn about two thirds of their annual income from fairs, more satellite and alternative fairs will be launched drawing participants from larger fairs to these new platforms. They will after a while, raise their fees causing cyclical repetition. This will put even more pressure on the galleries to be seen and on artists to produce.

But how else do you reach a wider audience? Internet art sales in the primary market can only go so far and since Ed Winkleman’s Moving Image art fair recently announced its expansion to Istanbul, it seems the art world’s definition of “local” is where the collectors are and so the mountain comes to Muhammed.

So is it worth it?

It really depends on what you bring and whether it clicks with the buyers (I will refrain from calling them collectors here as the recent trends point to a rise in speculative buys during the fairs and that is an entirely different category of clients). The main benefit for the gallery is still exposure and access to new eyes, walls and wallets. A gallery in Pittsburgh, for example, is unlikely to attract collectors from Los Angeles if it doesn’t physically go there and show their artists there, so that’s simple. Artists too gain new collectors if the gallery shows their work in a remote market. So artists benefit as well. Or do they?

An average fair is, as one of the panelists noted, now resembles a shopping mall. Booth after booth of attention-seeking installations, paintings, drawings, sculptures, videos, photographs and art that defies classification. Hundreds, thousands of individual items on display. How much can a visitor really absorb before emotional and visual fatigues set in? Twenty minutes? An hour? At which point do we simply glaze over the booths eager to sit down and rest our senses? Can you really spend the amount of time necessary to understand an artist’s work and not make an impulsive purchase? Does the quick purchase benefit the artist in the long run?

Frieze New York, 2014. Photograph by Kristina Nazarevskaia, Economics of the art fair

The fast pace, the crowds, all the events surrounding the main venue, are likely to impose a certain sense of urgency, an “auction mentality” if you will, where you must grab the work before it’s gone to another buyer. This set up doesn’t really allow you to take your time, get familiar with the work, examine its history, its life story, if you will, even with contemporary art, before you must make a decision to buy. Something you typically can do during the gallery’s regular exhibition. So you either have to arrive well-prepared and know what you want to buy and how much you want to pay for it or have to do your research on the spot.

For the galleries, the investment is as much in developing their artists’ collector base as their own image. By participating they establish themselves as important market entities and project a certain sense of academic and art historic value to the collectors and the curators who often procure art for their institutional collections at the fairs. In financial terms, on average some ⅔ of their annual income is derived from these art fairs, so that’s a substantial amount considering the fickle nature of the market where most (private) acquisitions are made with available disposable income.

More on the relative quality of the art brought to the art fairs in part III.

This article © galleryIntell