Art in a Clic(que)

To estimate the current development of the art market, I need to understand the traditional art market. Typically, an artist would collaborate with galleries or institutions and would be foremost dependent on art mediators and dealers to substantiate their career. These mediators or dealers are gatekeepers controlling access to a platform or audience. They operate as a middleman between the collectors and the artist and influence to regulation of the discourse of the art market. Artists rely on their network and those gatekeepers that present themselves as agencies, distributors, and experts. Traditionally, the collector would act as a consultant who may influence shaping the preferences and perceptions of collectors by promoting specific artists and their work. Although these mediators ensure the quality of this speculative good, this route to sell the work of an artist can create a barrier for an artist to enter the art market and push competition within the artist network.

Following the transformation from Digitisation, that is the conversion of analogue information or physical objects into a digital format, that innovated the way artist and creatives produce their work in a shorter time frame, this is accompanied by the utilisation of a reduced number of resources, as in the case, for example, Photography or Filmmaking. Resources such as analogue film and the processing time, as well as the need and skillset for this processing equipment, can be reduced when a Filmmaker decides to work with digital cameras and the required computer software instead of a developing room. Later digitalisation is using digital technologies to transform a business process, which leads to digital transformation, which means the process of using digital technologies to create or adjust business processes, customer experience, and culture. Generally, it delivers a broader range for the availability of artworks, allowing greater diversity in the art world.

In terms of distribution, online access has become a key for artists, mediators, and collectors to connect to a global audience. It becomes a tool for artists to mediate for themselves and establish their brand through social media. On the consumer side, interactive and online showcase rooms create an experience for the audience as digitalisation provides increased access to digitalised art. This allows an artist to widen their catchment pool and access to their work, besides, overall generating opportunities for artists and mediators to reshape conventional manufacturing, distribution, and consumption practices.

Baumol’s cost disease remains a significant challenge for artists to earn a decent income, as we find many creators of art for art’s sake online, where the nature of the artistic work requires a high level of skill, capability, and understanding of art theory that cannot be automated or substituted by technology.

So how did this apply to the case of the UK auction house Sotheby’s? During the COVID-19 pandemic, Sotheby's expanded its traditional business model, from a not only online market platform that underlines the concept of convergence to an entirely digital experience for the customer within the metaverse.

The Metaverse is a term used to describe a potential future Internet in which the virtual and real worlds are more closely linked and merged. Users interact with each other and with digital items in this shared, immersive metaverse, which blurs the distinction between the real world and the digital one. The Metaverse is a collection of interconnected virtual worlds that can be accessed through a variety of gadgets, including smartphones, PCs, and augmented reality glasses. The idea of the metaverse is not new; it has recently gained popularity as a result of advancements in virtual reality, AI, and blockchain technology. The Metaverse is viewed by some as the next great platform for human interaction, impacting everything from social norms and cultural values to economic and political systems (Rathenau Institute, 2021).

Speculatively, I would say that Sotheby's, as a monopoly, such as Christy as an art auction house, would need to participate in this trend towards an online marketplace since it aims to stay resilient within a changing market and audience. Sotheby's partnered with platforms such as Decentralland and created a digital replica gallery that is located within this metaverse in the art district. Decentraland is a decentralised virtual reality platform where you can purchase virtual plots of land in the form of NFTs using the Ethereum blockchain's MANA cryptocurrency. You may also create your own business, shops, and applications on that land. Its users govern the platform through the Decentraland DAO, a decentralised autonomous organisation (Laeeq, 2021).

As the latest big step in the new industry, Sotheby’s has developed Sotheby’s Metaverse, a dedicated site oriented towards digital collectors that provides a curated selection of NFTs selected by the auction house’s specialists. The initiative is being marketed as an ‘industry-first’ by the corporation. Alongside the convergence of different media forms has created a new opportunity for it to reach a niche audience across different platforms.

“We want to create more channels and more ways for our collectors to be able to engage in and buy things that they love,” explains Goodman. “We’re able to see a different group of people from what we would normally have in the consignment auction process. It’s a way to expand our distribution and brand and introduce new people to the collecting world. We’re excited about the momentum we’re seeing in the online space.” (eTail East, 2018).

Upon this recent development, Anderson's Long Tail describes the phenomenon of the process of coming into prominence in this specialised art market to border a range of selected items. In the case of Sotheby’s, it can be used to explain the long tail in terms of the transformation from a face-to-face personalised relationship to changing dynamics in the auction house, particularly towards online auctions, and the role of online auctions.

We know Sotheby’s as a high-profile auction house for blockbuster goods that sell high-end works of established and notorious artists such as Banksy. They regularly appear in the media with their multi-million dollar sales. These types of auctions typically have a limited supply as they deal with rarities and a strong demand as they advocate for unique, luxurious and prestige goods that result in high prices. With the transformation towards an online and metaverse experience of the auction house, they increased the availability of information about the artist and the works as well as that buyers interact within online communities that allow a wider range of items that are offered for sale such as NFTs. According to the theory of the long tail, transportation, and distribution costs are reduced by the online market and digital technology. Moreover, this can lead to the democratization of those deals as more buyers participate online which results in broader diversity, accessibility, and inclusiveness. Moreover, the long tail theory can explain how Sotheby's expands its service and experience and therefore its range of selected goods to a broader audience that leads to an increase in revenue along with unprecedented online art market tools.

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