Is the recession affecting art?

(By Nalini S Malaviya)

Now that the recession has become a hard reality and has hit the art market also significantly, one wonders if this will change the way we look at art. One reads of efforts where cadavers stripped of skin and coated with resin to preserve them are displayed as art, or when butterflies pinned on a canvas and dead animals preserved in formaldehyde solution are presented as art or when an unmade dirty bed is paraded as a work of art, one wonders what next? And, in fact, some very bizarre and sensational artworks have sold for millions of dollars at auctions. Art that generates controversy has become a surefire way to make a name.

What is amazing is that people have come up with these ideas and have managed to market it so well that they have persuaded others that it is art. And, what is more surprising is that people have not only been convinced about its credibility as a form of art, but have also spent good money on it. The fact remains that till just a few months ago practically anything and everything could be paraded as art and it would succeed in finding a gullible buyer.

Well, art happens to be one area where hype seems to play a major role. It is noticed that most people are drawn to the name of the artist rather than the artwork itself. It appears that the trend seems to be reversing, one finds that there are hardly any takers for artists such as Damien Hirst now. Prior to the recession the contemporary art market seemed to have gone completely haywire. Speculation, manipulation and hype were some of the causes that inflated the market substantially. At the moment, whether it is good judgment that is affecting the sale of such works, or whether it is a genuine lack of funds that is affecting the market - to know that one will have to wait and watch.

One hopes that in the current phase as most artists and buyers have become quality conscious there will be a change in trend for the better. However, as long as there are vested interests and a hyperactive media, hype will never go away, but surely with time buyers will become more evolved and will be able to separate art from the chaff.

The art market scenario

Numerous reports on the current recession and the situation of the art market have been emerging constantly, and while some suggest that the art market is fairing not as badly as one would have expected, there are others that go on to emphasize the sorry state of affairs. Still, the general consensus appears to be that the recession has helped tremendously in the art prices coming down to more logical levels. In the last few years the millions of dollars that were being spent on art thanks to all the hype, had boosted the art market artificially. This trend has slowed down now substantially and at the moment there is little demand for big names or hyped up works, and the few odd sales that are happening have been at much lower rates.

The overall feeling is that genuine art and artists will survive this downtrend. Speculation should also decrease, at least temporarily, and that should help in the stabilization of the art market in the long run. With lesser manipulation and a genuine interest in art being the root cause of sales it will ensure that only the serious players remain. Well, this might be the scenario at the moment, but ultimately how the market revives and operates may be determined by factors that will influence the situation in the next couple of years.

But, one noticeable factor in the recent past has been the renewed focus on quality by both the artist and the collector. In fact, now collectors are extremely conscious about the kind of works they buy. Where earlier an artist’s name was sufficient to induce a sale, and there was a frenzy to grab every work that came along - there would even be a waiting period to collect works by particular artists. This trend was bound to change, and now buyers are trying to ensure that they invest only in top quality works. The biggest gainers in this entire cycle have been upcoming artists who had begun to make their names just before the recession began. Their pricing has been the biggest draw, and both galleries and buyers are watching out for them.

(Published in Financial Times)

Brand value of art

(By Nalini S Malaviya)

Brand value has become immensely important in art - the association with a high end brand is seen as a status symbol, and as a product to be flaunted before others. Most potential buyers tend to relate to a known artist’s name just as one would respond to brands of watches, bags or clothing. A must have for any art connoisseur; these are artists equated with quality, consistency and lasting value, which is what places them at par with international brands. Some of the other features that are equated with a brand - recall value and the promise to deliver start to work here as well. And, that is where collectors are willing to go the extra dollar or rupee to own one.

Although art as an investment instrument has caught on immensely in only the last few years, the fact remains that most people still have limited knowledge regarding artists and their works. It is noticed that artists who are featured regularly in the news or the page 3 section are known more in the ‘non-art’ circles. Sometimes the association with a familiar name even leads to purchases of artworks as the average buyer is more likely to invest money in an artist who is perceived as a known entity. Although this cannot be equated directly with brand value, but, there is a link and an association with recall value. In creating a brand image, apart from talent, PR skills, marketing and media hype play a huge role. And, global recognition adds to the brand value. Most artist brands are those who have established themselves over the years – they have sustained themselves and have created a niche for their particular brand of art.

M. F. Husain, S. H. Raza, F. N. Souza are huge brands amongst the moderns, whereas artists like Subodh Gupta, Jitish Kallat, Bharti Kher and T V Santosh lead the category amongst the contemporary. With these artists, the investment aspect is clearly safe and risk free, however, as their prices run into several lakhs to crores of rupees, the amount of money required cannot be afforded by all. Clearly in art too, to own a brand one needs to have deep pockets.

Straying Off Course

(By Nalini S Malaviya)

Of late, there have been several queries regarding courses in art appreciation and workshops on painting and sculpture. It just goes to show how the awareness and interest in art has grown in proportion to the art market. There is an ever widening audience that wants to know more about various aspects of art, but, unfortunately, avenues to fulfill these remain rather limited. Most art colleges offer a fixed set of conventional courses which cover full time programmes in various branches of fine arts such as painting, applied arts, sculpture and art history amongst others. However, with the growth in the art mart, there has been a spurt in demand for affiliated services such as art advisory services. Also, there is a need for courses that address the business aspect of the market. Art writing, curation, investment, valuations, appraisals are some of the key areas that need to be addressed through specifically designed programmes for art professionals. Of these, to the best of my knowledge, there are very few courses that are offered either as a degree diploma, or a certificate course in any of the fine art institutes in the country. There is no shortage of fine art colleges (comparatively speaking) in the country, but these are geared towards conventional disciplines rather than towards professional courses that support ancillary services relating to the business of art. What this means then is that the art market is buzzing with professionals lacking in necessary qualifications and this further adds to the chaos that characterizes the Indian art market.

A look at an international auction house’s official website reveals short term courses in Art Law, Ethics and the Art market, Art Valuation, and a number of other equally relevant courses, while semester programmes in Art and Business, and masters in various aspects of contemporary art are offered. It appears that the business of art is taken extremely seriously and efforts are made to plug the gaps that may occur due to lack of knowledge. As an auction house it makes a lot of business sense as well to address these topics. In India we are lacking behind sorely in imparting professional education in most fields and the same is happening in fine arts too. On the other hand, the business segment in art has grown exponentially, while the number of professionals who can authenticate art, provide valuation or information on copyrights and other legal issues are negligible. One can only hope that such programmes tackling the business side of the art market are initiated in the near future, as this will establish greater credibility and confidence in the market.

Valuation of art

(By Nalini S Malaviya)

Every art collector, at some point or the other, likes to know the financial worth of his art collection. The monetary valuation of an artwork comes in useful not only in estimating the monetary worth of a collection, but also when art needs to be sold. Again, it forms a crucial element for the purpose of insurance and wherever property assessments have to be done or when estate issues are involved. In such cases it is important to get a fair estimate from an independent source.

Today, when prices have corrected drastically, many people who are attempting to sell their artworks privately have to resort to some kind of a valuation which gives an idea about its current market price. Having a reasonable base price as reference helps the seller in making a prudent decision regarding the sale of the artwork. A valuation may also be necessary when an heir is in doubt about the value of an inherited artwork. Many corporate collections and private individuals as well opt for a valuation of their art collection as it gives an estimate regarding the total financial worth of the collector.

The process of valuation should be done by experts in the field as it is a fairly complex procedure, involving several factors such as, comparison of data of various price points, significance or rarity of the work, condition of the artwork and current market estimates. Incidentally, most auction houses provide this service.

Generally, in case of private sales most people tend to approach either galleries or independent consultants for a fair market evaluation. The important factor here is that one should obtain the services of an expert who is unbiased and has no stake in the financial worth of the artwork.

The Indian art market has grown phenomenally in the last few years and although there is a slowdown at the moment, valuation of art is one field that is bound to see a lot of demand and growth in the near future.

(Published in Financial Times)