Design

Art and technology – A complex alliance

Invite-only receptions held in grandiose mansions, guests sipping champagne while they contemplate the latest Jeff Koons work with a price-tag higher than a family-sized house a few blocks down the street: the art market conjures images of luxury, secrecy and exclusivity.

November 13, 2014

The walled citadel of the art world has only accepted the wealthy and the well-connected into its realm, leaving the rest of us outside on the pavement. The tech crowd, known for its diversity, meritocracy and open culture, has suffered the same fate like the rest of us – a penalty paid for embodying the polar opposite values to those of the fine art world. Until now that is. These days Silicon Valley titans have taken to emulating power-hungry Wall Street barons with their lavish parties, fraternity culture and appreciation for art. Meanwhile, the unpopular tech nerd has turned into a culture savvy hipster with an invite to the latest Marina Abramovic private view. After years of steering clear, technology entrepreneurs are now following the new arts gold rush online.

Technological innovation has already disrupted most industries from publishing to fashion to food: during the morning commute our eyes are glued to the Kindle, while at lunch we browse shoes on Zalando as we tuck into our salad from JustEat. As for art, most of us still purchase artworks through galleries, auction houses and art fairs. As we would have done in 1798 – had we lived then of course.

The arts are a great paradox – works of controversial merit such as Tracy Emin’s bed artwork are seen to be fetching millions in auction sales while the industry itself is hesitant to break away from the hundred-year-old practices of purely offline distribution. The most disruptive artists require acceptance, legitimization and endorsement by art world experts before serious collectors would even consider starting a bidding a war for their works. Unsurprisingly, the same need for market validation reigns true for innovative new businesses, but there has been less of it to date as the brightest business minds admire the artwork instead of the P&L account. Yet as the digital unwittingly creeps into the arts, the industry is faced with a need for new models of distribution. After years of shunning innovation, the art market is finally ripe for technological disruption.

With a market size of $1.57 billion in 2013 projected to rise to $3.78 billion in 2018 according to the Hiscox Online Art Trade Report 2014, it is no surprise that many technologically-minded art aficionados now target the art market with their new projects. Just as the art collectors, the entrepreneurs and the investors: ArtBinder,,an application designed to help galleries present their works and track inventory, recently raised $3.2 million from Index Ventures, art collector Maria Baibakova and former Etsy COO Adam Freed. And they are no exception, with the collecting and education platform Artsy attracting backing from art dealer Larry Gagosian and the Russian art collector Dasha Zhukova. Collectively, start-ups in the fine arts are on course to raise $144.6 million by the end of the year. Now, where does all this money go?

Filter by ‘Art’ as market on AngelList and 738 companies crop up, with projects ranging from the artist discovery site Artsicle to the image-recognition audioguide app ArtGuru. Out of those, the majority are only beginning to tackle some of the basic challenges of bringing an industry online. Ecommerce start-ups such as ArtsyArtspace and 500px have each raised between $5.6 and $8.8 million in Series A and B last year to make art more accessible to a wider audience through online distribution. Likewise, established players have finally caught on that some of these websites are attracting new customer groups with a desire to buy relevant, high-quality and cutting-edge works at an affordable price. With this realization came two acquisitions this summer – Phaidon bought Artspace and Demand Media Inc Saatchi Art for $17 million.

Apart from the plethora of start-ups focused on the distribution side, there are some which look at B2B solving the problems experienced by other industry stakeholders such museums, gallery owners and collectors. The online platform Vastari connects private collectors with museums for exhibition loans, ensuring that institutions are able to find the right works for their exhibitions – a problem founder Bernadine Bröcker encountered while working at a Mayfair gallery. Meanwhile, the condition-checking app Articheck cuts down the time needed to complete a condition report by an average of 21 minutes per report, freeing up 1 month of staff time per year in an average gallery. ArtEngine leverages the benefits of cloud computing to allow artists, collectors and galleries to track the status and location of their artworks.

Despite their short existence, these projects have already attracted some big-name clients. Articheck works with the Lisson Gallery and the Institute of Contemporary Arts, while Russian Art and Culture, an online platform on the topic, lists Sotheby’s and Christie’s amongst its advertisers. The industry is finally starting to embrace innovation, although some still harbour doubts regarding online-only models of distribution. Exhibition A,  who work directly with artists to release limited edition artworks, still gains a lot of its traffic through word of mouth and pop-up shops, rather than online marketing techniques. Some aspects of the typical selling process are simply not present in the online world; many gallery owners fear that it is impossible to build a key relationship through a 1-click-purchase.

With the advent of technology-based distribution channels, process optimization software and monetization strategies, the old world of the arts is about to experience the ubiquitous digital revolution that shook up other industries. When investors, entrepreneurs and hundred-year old companies all rush in to drive change, it is only a matter of time before large-scale disruption follows. In the meantime, enjoy your bidding wars at Sotheby’s, your visits to the Frieze and the private views at the Gagosian: the future may well hold game-changing innovation for them all.