A Case Study Analysis of Online Art Sellers and Popularization of
Buying Art in the Era of Digitalization
By Sheng Lai
Advisor: Prof. Amy Whitaker
M.A. Final Project
Department of Art and Art Professions Visual Arts Administration
Steinhardt School of Culture, Education and Human Development Spring
2017
New York University
ABSTRACT
This thesis critically examines and analyses online art sellers and their decisive impacts on the
currently booming online art market. Though emerging online art sellers may only be
considered as portals to the traditional art market, they are involved in “cultural industry
digitalization,” which is defined in three aspects: (1) the application of internal digital
transformation in business practices, (2) the heavy use of the Internet as a mass medium, and
(3) the profound logic of digital capitalism and venture capital. Together these factors bring
challenges and changes to the traditional art world rules. Conducting qualitative research of
case studies of five major online art sellers—Paddle8, Saatchi Art, eBay/Sotheby's, Artspace,
and Sedition—and building on existing theories about the nature of arts and culture industry,
the thesis differentiates the strategies of these companies while observing the ongoing
phenomenon that they collectively represent. It is argued that that the success of online art
sellers inevitably requires the popularization of buying art, beyond the constituents of the
existing art world. The online models also reverse some traditional processes of art
consumption that are based on buyers’ long-time accumulation of cultural and social capital.
These changes constitute a revolutionary approach to commercializing art, yet so far have little
impact on breaking down the barriers between the art market that is elitist and intellectual and
the art market that caters to broader public tastes.
2
Table of Contents
Chapter 1 INTRODUCTION ......................................................................................... 4
Chapter 2 BACKGROUND ........................................................................................... 6
2.1 The Art Market: “An Autonomous Universe” ................................................................... 6
2.2 Large-scale and Restricted Art Markets............................................................................ 8
2.3 Cultural Industry Digitalization ........................................................................................ 9
2.4 Extra ............................................................................................................................... 13
Chapter 3 LITERATURE REVIEWS ...........................................................................14
Chapter 4 METHODOLOGY AND DATA ...................................................................17
4.1 Qualitative Research ....................................................................................................... 17
4.2 Data................................................................................................................................. 18
Chapter 5 CASE STUDIES ...........................................................................................19
5.1 Paddle8 (paddle8.com) .................................................................................................... 19
5.1.1 Business Model and Operations .......................................................................................... 20
5.1.3 Building Cultural Capital .................................................................................................... 23
5.1.4 The Target Audience ........................................................................................................... 24
5.2 Saatchi Art (www.saatchiart.com) ................................................................................... 25
5.2.1 Business Model and Operations .......................................................................................... 26
5.2.3 “Curated” E-commerce ....................................................................................................... 28
5.2.4 Free Art Advisory ............................................................................................................... 30
5.3 Sotheby's & eBay Partnership (www.ebay.com/sothebys) ............................................... 30
5.3.1 High Culture to Everyday Life............................................................................................ 31
5.4 Artspace Marketplace (www.artspace.com) .................................................................... 33
5.4.1 Business Model and Operations .......................................................................................... 34
5.4.3 Easy Collecting ................................................................................................................... 36
5.5 Sedition (www.seditionart.com) ....................................................................................... 37
5.5.1 Business Model and Operations .......................................................................................... 38
5.5.2 Education of Buying Art ..................................................................................................... 40
Chapter 6 SUMMARY AND CONCLUSION ...............................................................41
6.1 Summary......................................................................................................................... 41
6.2 Conclusion....................................................................................................................... 42
6.3 Further Research Suggestion .......................................................................................... 44
APPENDIX ...................................................................................................................45
BIBLIOGRAPHY .........................................................................................................51
3
“This relatively autonomous universe (which is to say, of course, that it is also relatively
dependent, notably with respect to the economic field and the political field) makes a place
for an inverse economy whose particular logic is based on the very nature of symbolic goods
- realities with two aspects, merchandise and signification, with the specifically symbolic
values and the market values remaining relatively independent of each other. At the end of a
process of specialization which has led to the appearance of a cultural production specially
destined for the market and, partly in reaction against that, a production of 'pure' works
destined for symbolic appropriation, the fields of cultural production are organized, very
generally, in their current state.”
Pierre Bourdieu, The Rules of Art: Genesis and Structure of the Literary Field
Chapter 1 INTRODUCTION
The following propositions will be elaborated in the present thesis:
One. Pierre Bourdieu’s theory of the market of symbolic good suggested that in today’s
modern society, art works with artistic, cultural and intellectual capital are no longer
completely and only possessed by the upper class, state, and church. Artists are more
autonomous than ever.
Two. But the autonomy comes with the emergence of the modern art market. To sell art
works, artists need to choose between two types of markets. In one type of market, artists
embrace the mass public, but to succeed, they sacrifice artistic and intellectual capital. Art
works are produced for the market and they are “characterized by tried and proven techniques
and an oscillation between plagiarism and parody most often linked with either indifference
or conservatism.”1 In another type of market, artists reject the economic success, they flee
from the mass public. Artists are devoted to art and works are purely produced for peers. The
consumption of art requires artistic, cultural and intellectual capital. In terms of the mass
public, only through cultural institutions’ long-term education can they appreciate and
understand art.
Three. More recently, however, digitalization and the Internet (details in the section 1.3) have
changed the art market. Online art sellers have emerged, and they have been trying to reach
large audience by blurring the boundaries between two types of markets. On the one hand,
1
Pierre Bourdieu, The Rules of Art: Genesis and Structure of the Literary Field, trans. Susan Emanuel
(California: Stanford University Press, 1996), 128.
4
venture capital is a power behind the scenes. As tech start-ups in the era of the Internet,
“online art services are first and foremost a business looking to make money,”2 wrote Robert
Read, head writer of Hiscox Online Art Trade Report. Online art sellers embrace the populist
approach of selling art works, and whether they are successful is defined by the reaction of
the masses. Therefore, the popular tastes influence online art sellers, and art works are
reduced to consumer goods with functional value. However, on the other hand, online art
sellers build accessible platforms for the mass public, collaborate with cultural institutions
who legitimize great art works, educate and guide the masses to view, identify, appreciate
and eventually consume art works. The elitist consumption of art is popularized because of
the mass public now being enabled to build up artistic, intellectual and cultural capital fast.
The goal of the thesis is to critically examine this premise to understand whether such a new
trend will influence the contemporary art market and its future. It will address the question
empirically by analyzing the case studies of five online art sellers. The thesis argues that the
success of online art sellers inevitably requires the popularization of buying art through
simplifying the traditional process of the art consumption that often requires buyers’ longtime accumulation of cultural and social capital, and this is no more than a revolutionary
approach of commercializing art, having little impact on breaking down the barriers between
the art market that is elitist and intellectual and the art market that caters to the public tastes.
Robert Read, FW: (EXT) Art Market I fo
24 February 2017.
2
atio al I te ie ‘e uest, E-mail message to author,
5
Chapter 2 BACKGROUND
2.1 The Art Market: “An Autonomous Universe”
In 1992 Pierre Bourdieu described the art market, or in his terms, “the artistic field”, as an
“autonomous universe” following its own logic of economy.3 To some extent, the judgement
still holds true in today’s art market both empirically and in academic debates, different from
most markets that may only follow the economic laws, it is believed that today’s art market
always should be considered in number of disparate aspects such as social and cultural, and
players in the market often have quite different interests.
On the one hand, nowadays in the art market, art works are considered as commodities or
investments. Art can now be highly merchandised more than ever. In the eyes of the mass
public, the art market is an international business game. With the global art market achieved
total sales of $63.8 billion in 2015, 4 Boris Groys pointed out that “Art can be interpreted as a
sum of works circulating on the art market” and “It is now beyond doubt that art can be seen
in the context of the art market and every work of art can function as a commodity.”5 In this
case, the mass public pays more attention to “the market” than “art.” And when they talk
about art, they probably think primarily of “spectacular developments in the art market that
took place in recent decades: the auctions of modern and contemporary art, the huge sums
that were paid for works, and so forth - what newspapers mostly report on when they want to
say something about contemporary art.”6 Moreover, even though for a long period time, the
art market is an elitist market, nowadays because a lot of artists have been “produced” by fine
art education system, and the mass reproduction techniques enabled by new technologies,
there are a lot of art works, official duplicates and peripheral products available to the mass
public.7 Art (related) works sometimes can be a synonymous with luxury goods, because they
3
Pierre Bourdieu, The Rules of Art: Genesis and Structure of the Literary Field, trans. Susan Emanuel
(California: Stanford University Press, 1996), 141.
4 Eilee Ki sella, What Does TEFAF 2016 Art Market Report Tell Us about the Global Art T ade?,
Artnet News, accessed 1 October 2016, https://news.artnet.com/market/tefaf-2016-art-marketreport-443615.
5 Bo is G o s, A t a d Mo e , e-flux, accessed 1 October 2016, http://www.eflux.com/journal/24/67836/art-and-money/.
6
Ibid.
7 Alessia Zorloni, The Economics of Contemporary Art: Markets, Strategies and Stardom (New York:
Springer, 2013).
6
are special enough to proclaim economic capital and status of owners, and are readily
accessible.8
Furthermore, artists, dealers and auction houses have been deliberately copying the marketing
strategies and techniques used by the luxury goods industry.9 Don Thompson used Damien
Hirst’s The Physical Impossibility of Death in the Mind of Someone Living (1991) as an
extreme example to show that in the contemporary art market, successful branding has
become one of the most significant factors that contributes to the price increase of certain art
works. “An emerging artist’s work that sells for $4,000 at one gallery might be offered at
$12,000 at a branded gallery.”10 To some extent, today’s art market is like Jean Baudrillard’s
consumer society, which gives consumers “not reality, but the dizzying whirl of reality [Ie
vertige de la realite].”11
However, on the other hand, the art consumption also can be very symbolic; it has its own
rejection of the pragmatic economic logic. The emergence of aesthetic, artistic, intellectual,
and cultural needs has led to the birth and development of cultural institutions and the
cultural industry.12 Though the art market is becoming more and more commercialized, art
works are still conceived as nonmaterial goods that “serve an aesthetic, rather than a clearly
utilitarian purpose.”13 Bourdieu pointed out that in “the artistic filed”, the cultural production
is very “pure”, “abstract” and “esoteric.”14 Applying his theory into the analysis of today’s art
market, firstly, the art consumption is “pure”, because most of art buyers have to develop
their specific artistic and aesthetic dispositions in accordance with certain principles of the
production of art works. Secondly, the contemporary art market is still highly “abstract.”
8
In the modern luxury industry, it is believed that luxury goods can be considered as more massproduced compared to fine art works that are often unique and rare. So, they are more readily
accessible than before.
9 Georgina Adam, Big Bucks: The Explosion of the Art Market in the 21st Century (London: Lund
Humphries, 2014), 77.
10 Don Thompson, The $12 Million Stuffed Shark: The Curious Economics of Contemporary Art (New
York: St. Martin's Press, 2012).
11 Jean Baudrillard, The Consumer Society: Myths and Structures (London: SAGE Publications Ltd.,
1998), 34.
12 Alessia Zorloni, The Economics of Contemporary Art: Markets, Strategies and Stardom (New York:
Springer, 2013), 21.
13
Paul M. Hi s h, P o essi g Fads a d Fashio s Cultu e I dust “ ste s: A O ga izatio -Set
A al sis, The A e i a Jou al of “o iolog
:
–59.
14 Pierre Bourdieu, The Field of Cultural Production, (New York: Columbia University Press, 1994),
115.
7
Different from art works that are more undifferentiated in the pre-modern society, today’s art
market shows “a multiplicity of specific approaches” and it is unified within a spectacle
involving a lot of different mediums.15 Lastly, the art market has become a complex structure,
and number of “esoteric” rules have been built in this structure.
Artists, dealers, auction houses, critics and art buyers in the art market all need to be familiar
with and flexibly use “tacit reference to the entire history of previous structures, and the
structure is accessible only to those who possess practical or theoretical mastery of a refined
code, of successive codes, and of the code of these codes.” 16 Therefore, the art market, in
Becker’s terms, is an “art world” that consists of “all those people and organizations whose
activity is necessary to produce the kind of events and objects which that world
characteristically produces.”17 It means that the art market not only simply involves
transactions between art sellers and art buyers. The art market is a result of the collaboration
involving the whole “art world.”
2.2 Large-scale and Restricted Art Markets
Bourdieu further explained that there are two types of art markets in terms of two types of
cultural productions.18 Applying his theory into the analysis of today’s art market, the first
type is large-scale cultural art market. In this market, art works are considered as “products”
for the mass public, who are non-professionals of art. Art works in this market cater to the
public tastes, and art buyers do not need to fully understand the “codes” used by those art
professionals. Therefore, it is also easy for art sellers to just follow the general market rules,
and conquest the market as much as possible. Marketing and branding strategies and tactics
become very important.
On the contrary, the restricted cultural market rejects the mass public, this art market “tends
to develop its own criteria for the evaluation of its products, thus achieving the truly cultural
recognition accorded by the peer group whose members are both privileged clients and
15
Ibid.
Ibid.
17
Howard S. Becker, Art Worlds and Social Types (London: SAGE Publications, 1975), 1.
18 Pierre Bourdieu, The Field of Cultural Production, (New York: Columbia University Press, 1994),
115.
16
8
competitors.”19 This market is supposed to be exclusive to art buyers with a high level of
artistic, intellectual and cultural capital. This elitism art market follows the game rules of the
“art world.” Collectors buy and donate art works legitimized by the “art world.” Cultural
institutions such as museums “consecrate and preserve” generations of avant-garde20 art
works, educational institutions create producers, who are supposed to bring the new
generation of avant-garde art works. Art critics and publications provide certain internal
evaluation system. 21 The mass public can hardly decode the “art world;” thus, they can only
see the current spectacle or make long-time efforts to study and understand through public
cultural institutions’ education.
2.3 Cultural Industry Digitalization
The term “digitalization” has been used in different contexts and definitions of it may vary.
For example, in the business field, Gartner, an information technology research and advisory
company, defines it as “the use of digital technologies to change a business model and
provide new revenue and value-producing opportunities; it is the process of moving to a
digital business.”22 In the science field, according to Lucy et al., digitalization enables people
to “mathematically reduce all types of information (video, still pictures, audio, text,
conversations, games or graphics) into binary form.”23 Moreover, the Internet refers to “a
telephony-based system that links computers and computer networks worldwide to permit
distribution of data, e-mail, messages and visual and audio materials to individuals, groups of
individuals and the public.”24 Therefore, “digitalization” may not mean going online or the
use of the Internet.
However, in the thesis, since the cultural industry, and especially the online art market is
concerned, the term “cultural industry digitalization” is used to specifically show the changes
to the “art world” brought by digital technologies, which include the use of the Internet, used
19
Ibid.
Avant-garde often means radical and experiment with respect to culture and society. Peter
Bürger, Theory of the Avant-Garde, trans. Michael Shaw, (Minnesota: University of Minnesota Press,
1984).
21 Ibid, 121-122.
22
Digitalization, Gartner, accessed 1 October 2016, http://www.gartner.com/itglossary/digitalization/.
23 Lucy Küng et al., The Internet and the Mass Media (London: SAGE Publications Ltd., 2008), 1-16.
24 Ibid.
20
9
in emerging technology-oriented art business practices (e.g. art business tech start-ups).
Moreover, to provide a more compete view, there are three aspects should be considered.
Firstly, like the definition used in the business field, digitalization is about the internal
changes happening in the art firms. MIT Sloan School of Management did a report on big
companies’ digitalization, and it claimed that successfully implementing it helps corporates
“radically improve performance or reach of enterprises.”25 The digitalization building blocks
as showed in the figure (1) were provided for companies to conduct best practices and
develop better strategies. And in the art business, especially regarding the online art market,
digitalization has already happened in a lot of online art firms. For instance, in terms of the
customer experience, by applying new technologies, online art sellers can reach many more
audiences than ever, which may be considered as “masses” compared with traditional art
sellers’ audience base. Therefore, in general, if these building blocks are all applied to the art
business, they may profoundly influence the environment and structures of it.
Figure (1)
(From: Digital Transformation: A Roadmap for Billion-dollar Organizations, p. 17.)
25
Digital Transformation: A Roadmap for Billion-dollar Organizations, MIT Sloan School of
Management, accessed 1 November 2016,
https://www.capgemini.com/resource-file-access/resource/pdf/Digital_Transformation__A_RoadMap_for_Billion-Dollar_Organizations.pdf.
10
Secondly, digitalization, as a force behind the booming online art market, also represents a
wholly new environment the “art world” faces. In 1936, almost two decades after the
invention of movies, Walter Benjamin quoted Georges Duhamel’ comments on movie, which
says movies are “A pastime for helots, a diversion for uneducated, wretched, worn-out
creatures who are consumed by their worries a spectacle which requires no concentration and
presupposes no intelligence which kindles no light in the heart and awakens no hope other
than the ridiculous one of someday becoming a ‘star’ in Los Angeles.” 26 And Benjamin
wrote, “The mass is a matrix from which all traditional behaviour toward works of art issues
today in a new form. Quantity has been transmuted into quality. The greatly increased mass
of participants has produced a change in the mode of participation... new mode of
participation first appeared in a disreputable form… Clearly, this is at bottom the same
ancient lament that the masses seek distraction whereas art demands concentration from the
spectator. That is a commonplace.” 27 Nowadays, the Internet and all the digital devices have
created a new mode of participation in arts for the masses. On the one hand, negative
comments have been made on the new mode. They sound like Duhamel’s comments on
movies. It may be described as distractive, fragmented and it may have no concentration and
no intelligence. On the other hand, in the context of technology development and transfer, it
is celebrated. The Internet and digital devices have evolved from a newly developed medium
or objects to a real mass medium, a super matrix. Nowadays, it is truer than ever that
“Quantity has been transmuted into quality.” The new participation mode has profound
cultural, economic and social reach,28 and the public mass now can view, appreciate, and
study the images of art works online, anywhere and anytime. Boris Groys stated that if the
era of mechanical reproduction gave people objects without aura, this era of digital
production provides “aura without objects.”29
Lastly, along with the two trends (the internal innovations of the art business and externally,
the new mode of participation in arts for the mass public) as mentioned, the fact is that the
online art market is growing fast, with conservatively estimated total sales of $4.7 billion in
26
Walter Benjamin, Illuminations: Essays and Reflections, Ed. Hannah Arendt, Trans. Harry Zohn,
(New York: Schocken/Random House, 1998).
27
Ibid.
28
Mass Effect: Art and the Internet in the Twenty-First Century (Cambridge: The MIT Press, 2015), ed.
Lauren Cornell and Ed Halter.
29 Boris Groys, In the Flow (New York: Verso Books, 2016).
11
2015.30 The “new revenue and value-producing opportunities” defined by the business filed
have also become very relevant in the art field.31 And the gold diggers include established
players such as Sotheby’s, who has a partnership with eBay, and several emerging art
business tech start-ups such as Artnet, Artsy, Paddle8, Artspace and Saatchi Art.
Behind the gold rush scenes, Dan Schiller’s theory of digital capitalism may provide a third
view. In Digital Capitalism: Networking the Global Market System published in 2000,
Schiller claimed that digitalization provides a broader effective reach for marketplaces, in
which companies all follows an expansionary market logic. 32 From a historical perspective,
he traced back to the neoliberal market-driven policies that contribute to the development of
the telecommunications system and how the digitalized system conversely empowered large
corporates, privileged groups, consumerism and capitalism.33 Furthermore, regarding
industries that may not be commercialized before, today’s cyberspace is “making feasible
what Edward S. Herman calls a ‘deepening of the market’—both for commercial home
entertainment and for education, which has long been exempted, at least in part, from
commercial imperatives. Networks are directly generalizing the social and cultural range of
the capitalist economy as never.”34
Eilee Ki sella, What does TEFAF
A t Ma ket ‘epo t tell us a out the Glo al A t T ade?,
Artnet News, accessed 1 October 2016, https://news.artnet.com/market/tefaf-2016-art-marketreport-443615.
31 Digitalization, Gartner, accessed 1 October 2016, http://www.gartner.com/itglossary/digitalization/.
32
Dan Schiller, Digital Capitalism: Networking the Global Market System (Cambridge, US: MIT Press,
2000), xiv.
33 Ibid.
34 Ibid.
30
12
2.4 Extra
Regarding this wholly new environment for the art field, the thesis may not show every
aspect of everything that are going on. However, besides the main argument, the thesis also
tries to provide facts and new insights. On the one hand, this thesis includes a little survey of
players in the recent expansionary online art market. It investigates several online art sellers
including online auctions houses, art galleries and art marketplaces. Their business models,
operations, digital marketing strategies and special features will be analysed and discussed.
On the other hand, through the lens of classical cultural and social theories, the thesis also
wants to explore the relationship between the high art and the mass public, the cultural
industry and the commercial business world.
13
Chapter 3 LITERATURE REVIEWS
Several scholars have discussed the practical aspect of digitalization in arts and culture
industries, in which the music industry may be compared with the fine art industry. For
example, Laura Robinson and David Halle’s study shows that music streaming service
companies that adopt digitalization have profoundly transformed how people access and
engage with arts, especially the music.35 In their study of the relationship between the music
industry and digitalization, on the one hand, thanks to new technologies, music listeners now
have more access to different genres of music since they can explore, save and listen to
various types of music online, and the music service providers also use users’ data to
customize better streaming services. Digitalization of the industry even has threatened the
traditional music industry. On the other hand, it is surprisingly found that though
digitalization leads to industrial innovations, monetary concerns in the offline market is still
“colonizing” the cyberspace.36 Before digitalization happened, Theodor Adorno pointed out
that in a capitalist world, popular music, which is different from “serious music,” is a very
typical example of the popular culture, and this type of highly standardized music caters to
the mass public taste.37 Starting from Adorno’s position, though today’s music industry
seems very diverse and digitalization has brought a lot of options in the market, there is little
space for “serious music,” and customers’ freedom and diversification of choices only show a
cyber version of “pseudo-individuation,” which is enhanced by the mass public taste
orientated products and services. “Standardization of song hits keeps the customers in line
doing their thinking for them, as it were. Pseudo-individuation, for its part, keeps them in line
by making them forget that what they listen to is wholly intended for them or predigested.”38
However, it should be noticed that the fine art market and the online art market are very
different from the music industry. Because music products and services, which are relatively
much more reproducible, can be easily traded or transmitted under the protection of
copyrights. It means that before all the discussion, the masses already could consume them.
However, art works are often unique, which means for many people, the consumption of arts
is still a new concept. Regarding this situation, several scholars have investigated the power
35
Laura Robinson and David Halle, Digitization, the Internet, and the Arts: eBay, Napster, SAG, and eBooks, Qualitative Sociology, September 2002, Volume 25, Issue 3, 359–383.
36
Ibid.
37
Theodor W. Adorno, The Culture Industry: Selected Essays on Mass Culture (London: Routledge
Publishing, 1991).
38 Ibid.
14
of social media for promoting arts and the consumption of arts, and how it may influence the
relationship between the arts consumption and the mass public tastes. It is believed that this
new media has brought changes to the art market and Sam Hinton and Larissa Hjorth argued
that the use of different types of social medias in the fine art industry provide new avenues
for “dissemination and engagement.”39 It is believed that “friendship and intimacy can be
both amplified and commodified through social media.” 40 Monica Lombardi’s research in
Italy shows that the use of social media has enabled not only established galleries, but also
small and medium size ones to reach more potential art consumers in a different way from
the past,41 because the more intimate way of communication may reduce the sense of distance
between the art sellers and potential buyers.42 Furthermore, it is also showed that because of
digitalization leading to an “information explosion”, in general, collectors and art lovers now
all have a higher knowledge of every aspects of the art market. They may readily get much
more information about artists, prices and the art market trends than before. This shows a
trend of “democratization of information,” and since the arts looks more accessible, 43 when
the mass public are reached by sellers through the social media, they may have more
interests.
Furthermore, in the US, Ryan McClure’s research shows that digitalization at least provides
an effective way for arts institutions in general to cultivate young collectors.44 It is claimed
that companies that are more adapted to new technologies may have more opportunities to
obtain young art consumers, who are tend to have different tastes from the older generations
and will strongly influence both the future infrastructure of the art market and the public
taste,45 which is also echoed in the art market analyst’s observations. According to Robert
Read, “Generation Y are generally more tech savvy so are more likely to purchase art online.
For this reason, the online art market will continue to grow, as Generation Y become older,
39
Sam Hinton and Larissa Hjorth, Understanding Social Media (London: SAGE Publications Ltd.,
2013), 1-6.
40 Ibid.
41 Monica Lombardi, Social Media and Contemporary Art Market, University of Lugano, accessed 1
November 2016, http://www.tec-ch.usi.ch/dissertations-full-thesis-lombardi-125734.pdf.
42 Ibid.
43 Ibid.
44
Ryan McClure, Cultivating Young Collectors: Engaging the Next Generation of Art Patrons,
Sotheby’s Institute of Art, accessed 1 October 2016,
http://gradworks.umi.com/15/40/1540848.html.
45 Ibid.
15
with more disposable income to spend on art.”46 Moreover, in McClure’s study, having
“lucrative prospect of the market” is one of the most significant features of this group of
emerging art buyers in the US, and players in the market need to understand “Generation Y's
unique characteristics as a consumer to determine the best marketing practices to engage
them in the evolving art community.”47 Moreover, Legene Quesenberry and Bruce W. Sykes
added that for art galleries, their websites or digital spaces also need to meet certain social
and intellectual needs of potential young customers and patrons, and it is paramount to the
success of galleries in the digital era. 48 However, on the other hand, it is also argued that
digitalization only provides a limited number of portals to the traditional physical art
market,49 young buyers are growing, but the high-end (conservatism) collectors are still the
dominant power of the market.
These studies as mentioned all provide helpful insights into the relationship between
digitalization, the art consumption and the mass public. They talked about how players in the
art market respond to new technologies and potential changes brought by them. In the music
market, the industry has been more popularized than ever because the streaming service
companies make the music more readily accessible, and aim to expand their markets in a very
fast pace. Digitalization may also bring similar results to the art market, for example, the
social media may be one important tool that attracts the public to consume arts. However,
there is little comprehensive research that focuses on whether digitalization is just a very
practical additional tool, will the online art market will have fundamental changes compared
with the “autonomous universe” idea mentioned at the beginning of the thesis, or if the online
art market will provide the mass public just another version of “pseudo-individuation”
because it caters to the public taste and ignore the complexity behind the “art world.”
Therefore, this thesis aims to not only provide practical ideas about these issues, but also
cultural and social insights.
Robert Read, FW: (EXT) Art Market I fo atio al I te ie ‘e uest, E-mail message to author,
24 February 2017.
47 Ibid.
48 Legene Quesenberry and Bruce W. Sykes, Leveraging the Internet to Promote Fine Art:
Perspectives of Art Patrons, Journal of Arts Management, Law, and Society 38, (2) (Summer): 121138, accessed 20 January 2017,
http://ezproxy.library.nyu.edu:2048/login?url=http://search.proquest.com/docview/223948916?acc
ountid=12768.
49 Pau Waelder, Different but Always the Same: The Online Art Market, Etc no. 98: 51-55. Art &
Architecture Source, EBSCOhost (20 accessed January 2017).
46
16
Chapter 4 METHODOLOGY AND DATA
4.1 Qualitative Research
To explore all these situations and problems mentioned in the previous parts, since the thesis
has limited resources to do a study of such a complex market. The use of the case method is
believed to bring an understanding of selected cases, which may be applied to the whole
phenomenon.50 And the cases study method also is a relatively reliable and feasible approach
for the researcher to explore the questions as mentioned before. Furthermore, Yin showed
that case study method, a useful empirical inquiry, is helpful for investigations into
contemporary phenomena within their real-life context, especially when “the boundaries
between phenomenon and context are not clear.”51 In terms of the thesis, the application of
digitalization in the art market is an emerging phenomenon that deserves attention, however,
the context of the art market is sometimes vague and it is a changing field that involves
different players with various aspects. Therefore, the thesis will mainly show and discuss five
cases, and it hopes to reflect the phenomenon within the context.
These five cases include (1) Paddle8 (paddle8.com), a web born online auction house, (2) the
partnership between traditional auction house Sotheby’s and e-commerce eBay
(www.live.ebay.com/lvx/sothebys), (3) Artspace (www.artspace.com), a digital marketplace
for art, (4) Saatchi Art (www.saatchiart.com), an online art gallery and (5) Sedition
(www.seditionart.com), a digital limited-edition art works marketplace. These cases are
mainly based in the United States or United Kingdom, however, digitalization sometimes
also comes with the trend of globalization, which means that these companies also aim to
reach an international audience base. Therefore, on the other hand, the phenomenon also can
be considered as “international,” and it is not only happening in the US or UK. Moreover, as
a qualitative research, the thesis provides insights into the relationship between the Internet
and digitalization and the art market. Miles and Huberman pointed that a successful case
study work requires different possible alternatives to be chosen to achieve the goal of the
thesis’ theme.52 Therefore, five cases were chosen regarding certain principles, firstly,
50
Susan K. Soy, The Case Study as A Research Method, Unpublished paper, University of Texas at
Austin, accessed 20 January 2017, https://www.ischool.utexas.edu/~ssoy/usesusers/l391d1b.htm.
51
Robert K. Yin, Case Study Research: Design and Methods (CA: Sage, 1984), 23, cited in 38.
52 Matthew B. Miles and A. Michael Huberman, Qualitative Data Analysis: A Methods Sourcebook
3rd Edition Lo do : “AGE Pu li atio s,
. A d “a ah Cu tis et al. App oa hes to “a pli g a d
17
digitalization plays an important role in all these companies as mentioned, it has provided
them new potential of revenue and value-producing opportunities. Their operations are
mainly online, which means their field is the online art market, and they are all seeking a
market expansion. Secondly, in terms of types of companies included, there are gallery,
auction house and marketplace that involves in both primary and secondary markets.
Therefore, these samplings promise a “generalizability” of findings. 53
4.2 Data
The data in the thesis includes both primary and secondary sources. The data are sourced
from 1. official websites of these companies, 2. news reports concerning these companies, 3.
interviews done by others with employees or managers of these companies, and 4.
observations of these companies’ strategies and operations in the cyberspace. Moreover, three
key art market annual reports including Deloitte Art & Finance Report, TEFAF Art Market
Report and Hiscox Online Art Trade Report are also referenced to provide a big picture of the
art market, and the online art market. In addition to these sources, several interviews also
were done by the researcher. Interviewees include Robert Read, Head of Art and Private
Clients at Hiscox, Jane Han, former Marketing Manager and Assistant Curator at Artspace,
and Ashley L. Wong, Head of Programmes and Operations at Sedition.
Case “ele tio i Qualitati e ‘esea h: E a ples i the Geog aph of Health. “o ial “ ie e &
Medicine 50, (January 1, 2000): 1001-1014. ScienceDirect, EBSCOhost (accessed January 20, 2017).
53 Ibid.
18
Chapter 5 CASE STUDIES
5.1 Paddle8 (paddle8.com)
Founded in 2011, Paddle8 is a typical example of today’s online-only auction phenomenon:
hundreds of small auction platforms are emerging, operating only online, and auctioning a
variety of objects including art works, antiques, and luxury goods. Paddle8, an “auction
house of the 21st century,”54 is one of the successful ones in terms of reputation and
investment.55 Its three co-founders are Aditya Julka, a seasoned technology start-up
entrepreneur;56 Osman Khan, an expert in consulting and finance;57 Alexander Gilkes, former
Executive of European multinational luxury goods conglomerate LVHM and Auctioneer at
Phillip’s auction house.58 One of Paddle8’s advantages is that it attracted abundant venture
capital. The investments came from various industries such as fine art, fashion, media, and
luxury goods.59 Among Paddle8’s individual investors, there are also famous names from the
art world, for instance, David Zwirner, Damien Hirst and Hikari Yokoyama. 60
In a TEDxChelsea speech, the co-founder Aditya Julka said that one of Paddle8’s goals is to
add values to the arts and culture industry by streamlining the traditional art transaction
process, which always involves the interaction between four to six different people “in a
mysterious manner.”61 The innovation of Paddle8 is to integrate all the steps of back-end
process (payment processing, shipping and logistics, installation, insurance, tax and customs,
and financing) into a one-stop real-time transaction service, which enables beginner art
buyers to easily understand and quickly be a part of the process. Julka believes that Paddle8
combines “the excitement and expertise of an auction house with intuitive technology,”
Eliza eth Baudoui , Paddle “ets the “tage fo O li e A t Au tio s Toda , The Huffington Post,
accessed 6 January 2017, http://www.huffingtonpost.com/elizabeth-baudouin/paddle8-sets-thestage-fo_b_7861616.html.
55 Paddle8 has been covered by mainstream press and invested by investors such as David Zwirner
and Mousse Partners.
56 Adit a Julka , Crunchbase, accessed 10 January 2017,
https://www.crunchbase.com/person/aditya-julka#/entity.
57 Os a Kha , Crunchbase, accessed 10 January 2017
https://www.crunchbase.com/person/osman-khan#/entity.
58 Cat hi g Up ith Ale a de Gilkes, Esquire, accessed 10 January 2017,
http://www.esquire.com/style/interviews/a32696/catching-up-with-alexander-gilkes-021015/.
59
A out, Paddle8, accessed 10 January 2017, https://paddle8.com/about/.
60
Ibid.
61Adit a Julka, Beaut a d the Beast: C eati e E t ep e eu ship i the A t Wo ld, TED Talks
(Video), accessed 12 January 2017, https://www.youtube.com/watch?v=E2a0lpYD6hk.
54
19
which connects a wide range of users to “the most covetable objects, sourced from a
worldwide network and evaluated by connoisseurs, in an elegant format that’s as enticing as
the works themselves.”62
5.1.1 Business Model and Operations
Based on this idea of “streamlining a mysterious process,” Paddle8’s borrows business model
ideas from traditional auction houses, but also has its own unique inventions. As an auction
house, it encourages “individual collectors to consign their works to sell at auction or via
private sales to their global network of buyers.” In 2014, the company’s sales were nearly
$36 million, which was 146% increase over 2013's. Moreover, by the second quarter of 2015,
Paddle8 had $25 million in sales.63 However, since online auctions often deal with “low
value high volume works,” while traditional ones will typically specialize in “high value low
volume,”64 Paddle’s fast growing sales also show that rather than acquiring sky high price
eye-catching masterpieces, the company’s key strategy should be gaining a large and
increasing number of online art buyers.65
Additionally, Paddle8 develops two types of auctions: themed and benefit. Firstly, the themed
auctions have pre-selected topics or themes, which are curated by cultural institutions,
celebrities from the arts and culture industry, or famous publications. Then, the auction house
charges consigners a commission fee that is 15% for works below $5,000 and 8% for works
above $5,000. On the other hand, the premium to buyers is 20%, which is considered as “a
discounted price from the market standards.”66 Secondly, in terms of the benefit auctions,
Paddle8 carefully selects non-profit cultural institutions with high reputation as its partners,
and these partners can run their virtual auctions. Traditional auction houses often charge 20%
62
Ibid, 5.
Natalie ‘o eh ed, The A t of the Deali g: I side Paddle 's Bid To Be o e The I te et's Au tio
House, Forbes, accessed 12 January 2017.
https://www.forbes.com/sites/natalierobehmed/2015/11/23/the-art-of-the-dealing-inside-paddle8bid-to-become-the-internet-auction-house/#617b50467bac.
64
‘o e t ‘ead, FW: (EXT) Art Market I fo atio al I te ie ‘e uest, E-mail message to author,
24 February 2017.
65 Ibid, 5.
66 Fa s, Paddle8, accessed 10 January 2017, https://paddle8.com/about/faqs.
63
20
to 25% commission for benefit auctions, but Paddle8 only charges about 5% to 6% vendor’s
commission.67
However, it should be noticed that Paddle8 is also a technology start-up. The venture capital
funding plays a very important role in the company’s development, and it is continuously
growing. It is reported that two years after Paddle8’s inception, the company got $6 million
from investors including “the artist Damien Hirst; the White Cube gallerist Jay Jopling; the
Mellon family; Mousse Partners, the private investment firm controlled by the family that
owns Chanel; and the venture capital fund Founder Collective, an early backer of Uber and
Buzzfeed.”68 On the one hand, the investment is a wonderful endorsement for the company;
however, on the other hand, it also means that Paddle8 has to keep expanding itself.
Therefore, in May 2016, Paddle8 united with one of its key competitors, Berlin-based onlineonly auctioneer Auctionata, which “does live-streamed auctions in vintage luxury areas such
as cars, wine, and watches,”69 and this union was supposed to create “one of the top ten
largest auction houses worldwide outside China.”70 However, in early 2017, Auctionata
announced that the company “would file for the equivalent of bankruptcy protection in
Germany and spin off Paddle8,” because “sufficient funds for maintaining the going concern
could not be found.”71 Then, Paddle8 announced that it found a separate entity that would
buy back its New York-based company, and it will continue to do its services.72 This
interlude shows that as a start-up, the market expansion is an urgent issue, and it also implies
that besides the auctions of art works, Paddle8 is willing to have Auctionata’s broader
product line.
Ki e l Chou, A t “ite Takes Cha ita le Tu , The Wall Street Journal, accessed 20 February
2017, http://www.wsj.com/articles/SB10001424127887324481204578177391210355294.
68 Diane Solway, New Kid on the Block, W Magazine, accessed 12 January 2017,
http://www.wmagazine.com/story/alexander-gilkes.
69 Sarah Douglas, Auctionata and Paddle8 Will Merge, Marking a Shift in the Online Art Market,
Artnews, accessed 15 January 2017, http://www.artnews.com/2016/05/12/auctionata-and-paddle8merge-in-sign-of-consolidation-in-online-art-market/.
70 Au tio ata Paddle U ite, Auctionata, accessed 15 January 2017, https://auctionata.com/enus/n/auctionata-paddle8-unite.
71 Henri Neuendorf, Au tio ata Closes I sol e
P o eedi gs, Artnet, accessed 28 February 2017,
https://news.artnet.com/market/auctionata-closes-insolvency-proceedings-874583 and Guelda
Voie , O li e A t Au tio “ta tup Calls it Quits, Observer, 28 February 2017,
http://observer.com/2017/02/online-art-auction-start-up-auctionata-calls-it-quits/.
72 Ibid.
67
21
5.1.2 The Selection of Art
However, at the beginning, Paddle8 only had the benefit auctions, and the company only
auctioned art works. For these auctions, works were selected by non-profit cultural
institutions, and they were exclusive to a certain group of people, who were familiar with
them. Therefore, it was not a populist way of auctioning. After that, Paddle8 had themed
auction, and tried to attract more attention. On the one hand, Paddle8 describes its art works
as “museum-quality contemporary art vetted by experienced specialists,” which highlights
the experts’ approval. On the other hand, art works are mostly priced between $1,000 and
$1000,000,73 which have little overlap with top auction houses. Moreover, in an interview,
the co-founder Alexander Gilkes said that “it’s not just about the painting, but also the chair
that goes with it,”74 because Paddle8 was also trying to expand into design furniture, luxury
goods, clothing and even collectable toys auction services. The mixture of high and low is
Paddle8’s another try, “the son of one of the biggest collecting families in the world is now
buying sneakers” Aditya Julka said.75
Additionally, seventeen Paddle8’s marketing e-mails, dated from 6 January 2017 to 27
February 2017, were analyzed. In general, these e-mails were regularly sent to all subscribers
to promote ongoing auctions at Paddle8. Moreover, they were also customized to highlight
objects that may interest subscribers based on their browsing histories. Regarding the general
information, it is found that the most of Paddle8’s art works on sale were prints, multiples,
and photographs, which can be more well viewed on the screen. In terms of the subject
matter, street art, Pop art, famous fashion or landscape photography, celebrity portraits (e.g.
David Bowie Photography Auction) appeared regularly, and some screenshots of these emails are showed in figure (2) in the next page. It is believed that though Pop art or street art
were initially anti-consumerism and rebellious, in the digital era, the mass media already
made their images more popular and engaging public taste than even. This typical selection
Ki e l Chou, A t “ite Takes Cha ita le Tu , The Wall Street Journal, accessed 20 February
2017,
http://www.wsj.com/articles/SB10001424127887324481204578177391210355294.
74 “a uel Co h a , Ale a de Gilkes Dis usses Paddle 's Desig -“a
Futu e, Architectural Digest,
accessed 12 January 2017, http://www.architecturaldigest.com/story/paddle8-alexander-gilkesdesign-auctions.
75
Natalie ‘o eh ed, The A t of the Deali g: I side Paddle 's Bid To Be o e The I te et's Au tio
House, Forbes, accessed 12 January 2017
https://www.forbes.com/sites/natalierobehmed/2015/11/23/the-art-of-the-dealing-inside-paddle8bid-to-become-the-internet-auction-house/#617b50467bac.
73
22
of works may not represent all the themed auctions, it still shows that Paddle8’s preference
for popular works and its efforts to cater to the tastes of the public because of its needs of
sales in volume.
Figure (2)
5.1.3 Building Cultural Capital
While Paddle8 aims at reaching a broader audience, the company also seeks to build its
cultural capital through branding and marketing. Paddle8 is continuously developing its
brand as a “21st century auction house,” which highlights its “newness.” In 2013, Paddle8
announced it got $6 million funding and there were several positive reports on the
company,76 which drew a lot of attention. They all talked about another word “innovation.”
Paddle8 was branded as a challenger that may totally change the old and conservativism
auction world. Therefore, it is believed that initially, when people talked about Paddle8, they
were talking about a technology start-up.
However, it is also found that Alexander Gilkes, Eton graduate who “comes across as
decidedly old-world.”77 There were a lot of reports on him, and his public image is often
elegant, artsy and charming, which makes him the best spokesperson78 for the company.
Moreover, the spokesperson’s cultural capital was transferred and extended to the company.
Gilkes shared his personal stories about arts and culture, his experience in the art world,
P ess, Paddle , a essed 10 January 2017, https://paddle8.com/about/press.
Dia e “ol a , Ne Kid o the Blo k, W Magazine, accessed 12 January 2017,
http://www.wmagazine.com/story/alexander-gilkes.
78 In the context of marketing, the spokesperson is a person who represents a company, industry or
cause in the media.
76
77
23
which is totally different from other two co-founders who thinks the art world is
mysterious.79 It is believed that this strong coverage somehow contributed to company’s
brand and the credibility for a tech start-up to be a player in the cultural field.
On the other hand, in terms of Paddle8’s marketing strategies, the company follows a similar
approach. Tastemakers were invited to teach the audience and provides suggestions and
recommendations. Paddle8 regularly asked celebrity figures in the art, entertainment and
fashion world to curate auctions. For example, Bob Colacello, an art writer and former editor
of Andy Warhol’s Interview magazine,80 was invited to curate an auction about Andy
Warhol, and Paddle8 editorial had a long conversation with the writer, talking about the items
and Colacello’s thoughts on them. 81 In this case, a famous art writer provided the credibility
for the whole auction and art buyers as followers could buy items with less concerns. In
addition to this, Paddle8 also applies digital marketing strategies commonly used by mass
consumption e-commences. For example, it sends e-mails about new auctions, provides
personalized recommendations based on users’ browse histories.
5.1.4 The Target Audience
Founders of Paddle8 also claimed that one of reasons they created this auction house is that
they wanted to fulfill the needs of an emerging group of art buyers, who are “cost-sensitive,
channel-agnostic, nomadic, digitally savvy, craves immediacy, and collects across multiple
categories.”82 It means that this group of people are familiar with the cyberspace, but may not
know the art world and its ecosystem. Moreover, Alexander Gilkes said that “our generation
has become somewhat stripped of identity by the homogenizing effect of technology.” “So,
more than ever, people want to project their own individuality. What you collect is the
Co-founder Aditya Julka o e said I thought it ould e fai l st aightfo a d fo e to alk i to
a galle o a au tio house a d u so e a t. It tu s out it is a lot o e o pli ated. The e
were waiting lists, misinformation about which artists were really hot and what the actual price was.
It as eggi g fo i o atio .
80 I the
s, he as also di e tl i ol ed i all aspe ts of life a d usi ess at A d Wa hol s
studio The Factory.
81 Ai sle O Co
ell, “ta te Au tio House: Paddle Guides Afflue t Mille ials I to The World Of
Fi e A t, Fast Company, 12 accessed January, 2017,
https://www.fastcompany.com/3058472/starter-auction-house-paddle8-guides-affluent-millennialsinto-the-world-of-fine-art.
82 Ale a de Gilkes, Fo u : A e o li e au tio s the futu e of the a t t ade? Apollo, accessed 12
January 2017, https://www.apollo-magazine.com/forum-online-auctions-future-art-trade/.
79
24
ultimate impartation of who you are. It’s the archive of your identity—it’s what you leave
behind.”83 It also shows that Paddle8 noticed that though this group of people may have little
experience in the traditional art market, they may have this social aspirational need.
Therefore, by using rules they are familiar with and providing tastemakers to guide them,
Paddle8 provides an easy and populist way to help them find their “identities” in a very
comfortable environment.
5.2 Saatchi Art (www.saatchiart.com)
Saatchi Art, formerly known as Saatchi Online, was founded in 2006 by Charles Saatchi. It
was originally developed as an online showcase of emerging artists and their artworks. 84
Charles Saatchi, owner of Saatchi Gallery, London and founder of advertising firm Saatchi &
Saatchi, is one of early supporters of the Young British Artists and his name has been
associated with “the high end of the art market spectrum.” 85 Later in 2011, Saatchi Online
was transformed to a marketplace called Saatchi Art and received $11 million in venture
capital. However, Charles Saatchi was no longer involved in it.86 It is also found that since
2014, Charles Saatchi has taken several legal actions in UK courts against Saatchi Art for its
infringement because of an alleged breach of an Intellectual Property agreement about his
name and the use of the name by Saatchi Art. 87
Moreover, in early 2014, Sean Moriarty, former CEO of Ticketmaster, an online ticket sales
and distribution company, became CEO of Saatchi Art, and he was supposed to help the
company expand its market. 88 Later in 2014, Saatchi Art was acquired for $17 million by
Demand Media, an “Internet media, advertising and e-commerce” public company also based
Dia e “ol a , Ne Kid o the Blo k, W Magazine, accessed 12 January 2017,
http://www.wmagazine.com/story/alexander-gilkes.
84 Ga ett ‘ei , Collectors Now Look to Hang With Artists Online, LA Business Journal, accessed 20
January 2017, http://labusinessjournal.com/news/2016/may/29/collectors-now-look-hang-artistsonline/?page=2.
85 Amah-Rose Abrams, Charles Saatchi Sues Online Platform Saatchi Art to Stop It from Using His
Name, Artnet, accessed 20 January 2017, https://news.artnet.com/art-world/charles-saatchi-suessaatchi-art-297042.
86 Ibid, 1.
87
Ibid.
88
Ryan Lawler, With A New CEO From Ticketmaster, Art Marketplace Saatchi Online Rebrands as
Saatchi Art, TechCrunch, accessed 20 January 2017, https://techcrunch.com/2014/01/29/saatchiart/.
83
25
in Santa Monica. Sean Moriarty then became CEO of Demand Media. 89 Additionally, in its
parent company’s website, Saatchi Art is described as an internationally successful online
marketplace that has over “five hundred thousand original artworks, sixty thousand emerging
artists, one hundred countries represented and 800,000 social following.”90 This number of
art works is definitely much higher for the most traditional art galleries’. However, it is
surprising that for this number of art works, Saatchi Art only has four in-house curators led
by Chief Curator, Rebecca Wilson, who is also Vice President of Saatchi Art’s Art Advisory
and was formerly Director at Saatchi Gallery, London. 91
Moreover, considering itself as “the world’s leading online art gallery,”92 Saatchi Art aims to
“redefine the experience of buying and selling art” by firstly, giving potential audiences “free
art advisory services” and secondly, curating online exhibitions that are welcoming for all the
people and easy to understand.93 As Wilson said in a Forbes interview, “the Internet
democratizes the art world by expanding opportunities and essentially shifting the control and
taste-making power that determines who is successful and who isn’t,” and “much of what
goes on in the art world is about nurturing and supporting artists, on the one hand, and
helping people purchase art on the other.” 94
5.2.1 Business Model and Operations
In terms of the business model, Saatchi Art is like eBay or Amazon version of a fine art
gallery. According to Garrett Reim, “Saatchi Art allows anyone to ‘hang’ their art on the
website’s digital walls.” 95 The company gets profits in the form of a 30% of all sales made on
the website. The percentage is a little lower than the average level of what traditional
galleries get, and the prices of art works are often from $500 to $5,000. However, Saatchi Art
89
Ibid.
“aat hi A t, Leaf Group, accessed 5 February 2017,
https://www.leafgroup.com/brands/#saatchiart.
91 A t Ad iso , Saatchi Art, accessed 5 February 2017, https://www.saatchiart.com/artadvisory.
92 A out, Saatchi Art, accessed 5 February 2017, https://www.saatchiart.com/about.
93 Ibid.
94 ‘e e a Wilso , Why The Internet Will Loosen The Iron Grip Men Have On The Art World,
Forbes, accessed 5 February, 2017, https://www.forbes.com/sites/valleyvoices/2016/02/04/whythe-internet-will-loosen-the-iron-grip-men-have-on-the-art-world/#10f1a5a928bc.
95
Ga ett ‘ei , Colle to s No Look to Ha g With A tists O li e, LA Business Journal, accessed 20
January 2017, http://labusinessjournal.com/news/2016/may/29/collectors-now-look-hang-artistsonline/?page=2.
90
26
does not have inventory costs since works are always in artists’ hands. Moreover, customers
often need to pay for the shipping costs, while the company gives customers basic consultant
services and instructions. 96 As a far-reaching online marketplace, to support the emerging
artists, Saatchi Art teaches and encourages artists to promote their works. For example,
Saatchi Art’ marketplace allows artists to share their works’ sales information to main social
media platforms, and these sharing also create free online exposure for the marketplace.97
However, besides all these, it is believed that Saatchi Art’s parent company Demand Media’s
strategies also play an important role in the whole business. Even though Demand Media now
claims that its mission is “to build platforms across media and marketplace properties to
enable communities of creators to reach passionate audiences in large and growing lifestyle
categories, while also helping advertisers find innovative ways to engage with their
customers.”98 Originally, its business was all about successfully operating a “content farm,”
simply using a large amount of content production to earn huge advertisement profits. The
company paid low rates to freelancers, and these “content farmers” would produce thousands
of articles and videos that were “algorithmically designed to be narrow in focus and broad in
reach to maximize online advertisement potential.” 99 Normally, the “content farm” could
produce 4,000 videos and articles every day and the important algorithm as mentioned for
these contents was generated from popular search terms “from more than 100 sources
comprising 2 billion searches a day”, advertisement market keywords and ranked search
engine results.100 After Demand Media owned information websites such as eHow,
Airliners.net, and Livestrong.com got enormous traffic, page views, and online attention, the
company could make profits through putting advertisements on these websites or providing
branding services for clients. However, in 2011, Google fundamentally changed its
algorithm, because it tried to deprioritize results from low-quality content websites as
96
Ibid.
A La di, “elli g o “aat hi, Vasari21, accessed 10 February 2017, http://vasari21.com/sellingon-saatchi/.
98 A out, Leaf Group, accessed 5 February 2017, https://www.leafgroup.com/brands/#saatchiart.
99 Jessa
e Colli s, M “u
e o the Co te t Fa , The Awl, accessed 10 February 2017,
https://theawl.com/my-summer-on-the-content-farm-ec230e4972f8#.yzuog3tm3
100
Da iel ‘oth, The Answer Factory: Demand Media and the Fast, Disposable, and Profitable as Hell
Media Model, WIRED, accessed 10 February 2017,
https://www.wired.com/2009/10/ff_demandmedia/.
97
27
mentioned. Finally, it battered Demand Media’s business. 101 After that, the company started
to acquire marketplaces and tried to have a new direction. However, the company still has its
strong power of branding, advertising and influencing the social media.
5.2.2 Digital Marketing
Relating to Saatchi Art’s digital marketing strategies, it is believed that it follows a similar
methodology. Saatchi Art has an official blog called Canvas, which regularly updates several
columns including “Art News,” “Art History 101,” “Inside the Studio,” “Design Inspiration,”
and so on. They are not in-depth reporting on the art world, they only focus on art works that
can be found on the marketplace and their contents are also “narrow in focus and broad in
reach to maximize online advertisement potential.” Furthermore, compared with pamphlets
written by curators in traditional art galleries, these contents are straightforward and well
written for art non-professionals. Moreover, different from non-profit art organizations’
similar contents, in Saatchi Art’s most columns, viewers can find sales information that is
related to the contents, and viewers can simply click and buy art works from there. Therefore,
these contents are designed for marketing purpose more than public education purpose.
Moreover, Saatchi Art also has attracted very strong social media attention. By 12 March
2017, it has seven official accounts in mainstream social media platforms. There are 405,198
followers on Facebook, around 200,000 followers on Twitter, 94,687 followers on Pinterest,
about 230,000 followers on Instagram and 1,425 subscribers on YouTube. Not surprisingly,
the contents on these platforms are all like these column’s contents. Furthermore, Saatchi Art
also creates a lot of videos and images that are either used to promote certain art works and
attract potential art buyers.
5.2.3 “Curated” E-commerce
As mentioned, Saatchi Art has over 500,000 works listed on its marketplace, but only has one
chief curator. It is believed that “curating” here in this online gallery is different from the art
world’s “curating.” Saatchi Art regularly posts “curated” catalogue of artworks. However,
these catalogues are more like series of general retail shopping guide. For example, in Saatchi
101
Andrew Wallenstein and Todd Spangler, Epic Fail: The Rise and Fall of Demand Media, Variety,
accessed 10 February, 2017, http://variety.com/2013/biz/news/epic-fail-the-rise-and-fall-ofdemand-media-1200914646/.
28
Art’s 2017 Spring catalogue, also a digital magazine, as showed in figure (3), introduced an
artist who does figurative works, the catalogue provided basic information of the artist and
one simple comment on the work was “artists often have a deep connection to certain
colours, in this case a green so grass like you can smell it.” 102 In the next page, figure (4),
there were different types of figurative works with prices and how they would look like in
some fancy apartments. Moreover, in this catalogue, discount codes were always in
prominent positions. The whole idea of this “curated catalogue” seems borrowed from
traditional retail e-commerce.
Figure (3)
Figure (4)
In this case, the visual experience and functional values of art works are highlighted. Art
works are often reduced to be eye candies and ornaments. For certain group of art buyers like
interior designers, Saatchi Art provides a very useful colour matching tool. “I am a huge fan
of Saatchi Art because they make the art selection process seamless and enriching,” designer
Hunter said. “It is literally the colour—that magic pixie dust—that enhances my rooms.”103
As for the mass public, they do not need much intellectual or cultural capital to identify,
study and appreciate these art works, thus, the consumption of arts is transformed into a “very
pleasant retail shopping experience.”
Catalogue Co te t, Saatchi Art, accessed 1 March 2017,
https://www.saatchiart.com/catalog/2017/1#catalog_content.
103
Saatchi Art Hires Art Advisor Hayley Miner to Head Its Trade Division, Business Wire, accessed
10 March 2017, http://www.businesswire.com/news/home/20150901005558/en/Saatchi-Art-HiresArt-Advisor-Hayley-Miner.
102
29
5.2.4 Free Art Advisory
In the context of the traditional art market, the art advisory often means very professional
special services for certain elitist collectors. It not only requires economic capital, but also art
buyers having a certain level of professional knowledge. It builds a relationship between
collectors and advisors, which also involves much social capital. However, Saatchi Art’s
“Free Art Advisory” provides another simplified and populist approach. Basically, the art
advisory page gives viewers a questionnaire with images of artworks and basic questions
about tastes, and people only need to pick images they like and answer questions such “select
the room where you wish to hang your new artwork,” and “what is your budget.” Again, the
functional values of art works are highlighted in a straightforward way. Also, based on
people’s choices of images, the website gives an analysis of their tastes, and this taste test
result will only lead to people’s click and buy behaviour, because finally, the
recommendations of art works will be provided for those who finish the questionnaire.
5.3 Sotheby's & eBay Partnership (www.ebay.com/sothebys)
In the previous cases, Paddle8 and Saatchi Art are all online-only companies, which means
they were digitalized when they were born. However, for traditional companies such as the
established auction house Sotheby’s, it is still trying to adapt to the new online art market.
Therefore, its approaches may be different. It is believed that the partnership between
Sotheby’s and eBay, which is described as a “marriage of the blue-blood auction house to the
blue-collar online retailer,”104 is a very typical case of how a high-end auction house tries to
reach a broader audience through the Internet.
Founded in 1995 in California, eBay, an e-commerce company, provides C2C (consumer-toconsumer) and B2C (business-to-consumer) services for people all over the world. 105 As a
multibillion-dollar business, the company claims that it has about 167 million active buyers
and 1 billion live listings, which makes eBay one of the top ten retail brands in the world. 106
Willia G i es, EBay Begins Streaming Live Sothe s Au tio s, The New York Times, accessed
10 March 2017, https://www.nytimes.com/2015/04/02/business/ebay-begins-streaming-livesothebys-auctions.html.
105
Who We A e, eBay, accessed 10 March 2017, https://www.ebayinc.com/our-company/whowe-are/.
106 Ibid.
104
30
Its slogan is “if it exists in the world, it probably is for sale on eBay.”107 On the platform,
eBay has a wide range of mass consumption products such as electronics and fashion. Its
original service was mainly auction style listing. Buyers can bid on items listed by sellers,
and eBay gets profits from providing a bidding platform.108 This feature also made the
trading of small collectables a main service of the platform in eBay’s early days. Later, eBay
began to offer more options such as fixed price listing. However, before the partnership, eBay
does not have a special channel for the fine art auctions.
On the contrary, founded in 1744 in London, UK, Sotheby’s is a global company that is one
of the world’s largest auctioneers of fine and decorative arts, real estate, wine, jewellery and
so on. It is well known that Sotheby’s art sales always have few sky-high prices, and for its
key auctions, buyers are supposed to either have economic, cultural, intellectual capital or be
supported by professionals’ advice and help. Therefore, as a high-end auction house,
Sotheby’s “bidding” is totally different from eBay’s “bidding.”
5.3.1 High Culture to Everyday Life
Therefore, a partnership between such different companies makes it an interesting case.
Moreover, it is found that Sotheby’s had two failed experiments before. In 1999, it partnered
with Amazon.com, but two companies soon closed their joint site in October 2000. 109 In
2002, Sotheby’s and eBay tried to have a similar partnership, but it finally failed because
“that was a bit too head of its time, frankly,” according to one of eBay’s representatives.110
However, nowadays, according to Hiscox Online Art Trade Report 2016, people are more
comfortable with buying art online and online art market sales reach $3.27 billion in 2015.111
Therefore, when Sotheby’s key rivalry Christie’s launched their own online auctions in 2012,
Ou Co pa , eBay, accessed 10 March 2017, https://www.ebayinc.com/our-company/.
Fo ats, eBa , a essed Ma h
, http://pages.ebay.com/help/sell/formats.html.
109 EBay, Sothe
's “et to Lau h Ne “ite, Cnet, accessed 30 April 2017,
https://www.cnet.com/news/ebay-sothebys-set-to-launch-new-site/.
110
Ja o Kast e akes, eBa lau hes high-end au tio s ith “othe 's, a essed Ma h
,
http://www.theverge.com/2015/3/17/8227663/ebay-sothebys-auctions-launch.
111 Hiscox Art Trade Report 2016, Hiscox, accessed 10 March 2017, https://www.hiscox.co.uk/onlineart-trade-report/docs/hiscox-online-art-trade-report-2016-v2.pdf.
107
108
31
and in 2014 reported that 6% increase of new buyers came from online,112 it was reasonable
for Sotheby’s to follow the trend and have this partnership.
A report from BI Intelligence on luxury e-commerce also shows that luxury shopping online
now is less “brand- and status-oriented than it once was.”113 New generations of luxury
buyers enjoy the convenience and low prices of e-commerce retailers just like eBay and
Amazon, which means that luxury shopping is becoming more price-sensitive.114 Because of
this trend, Sotheby’s did not launch its high-end auctions through the partnership. Its auctions
on eBay are mainly day sales, which have less expensive items “valued under $25,000, or
even less.”115 Moreover, “culturally sensitive auctions” are also exceptions.116 According to
Sotheby’s, these “easy-to-use design and live streaming auctions” are supposed to make
“aspirational art feel more accessible than ever to a broad online audience with diverse
interests and tastes.”117
Since this partnership aims to attract new buyers, who may not have much experience with
buying fine art and high-end collectibles. Sotheby’s offers specially selected auctions that
have lowers bars and more basic education of art. Firstly, the selection of works is more
populist. Secondly, there are more tailored contents such as informative articles and
tastemaker talking videos for these new audiences.118 For instance, for a Frank Sinatra’s
untitled 1985 abstract painting, Sotheby’s prepared a short video of this famous singer’s art
stories, and for photography on New York sales, hip-hop artist Swizz Beatz and fashion
“othe 's Pa t ers with eBay for High-profile Art Auctions, Business Insider, accessed 1 March
2017, http://www.businessinsider.com/sothebys-partners-with-ebay-for-high-profile-art-auctions2016-5.
113 Ibid.
114 Ibid.
115 “othe
s Lau hes o eBa , Sotheby’s, accessed 1 March 2017,
http://www.sothebys.com/en/news-video/blogs/all-blogs/sotheby-s-at-large/2015/03/sothebyslaunches-on-ebay.html.
116 Eileen Kinsella, Weighi g the P os a d Co s of the “othe
s eBa Pa t e ship, Artnet, accessed
10 March 2017, https://news.artnet.com/market/weighing-the-pros-and-cons-of-the-sothebysebay-partnership-63880.
117
“othe s Lau hes o eBa , Sotheby’s, accessed 1 March 2017,
http://www.sothebys.com/en/news-video/blogs/all-blogs/sotheby-s-at-large/2015/03/sothebyslaunches-on-ebay.html.
118 Ibid.
112
32
designer Anna Sui talked their stories of the city. 119 Lastly, the online auction environment is
also different from traditional auctions that are tense and full of emotional competition. The
eBay’s populist website design normalizes the fine art auction and makes it feels more like an
everyday online shopping experience. On the other hand, the established auction house also
made its brand more accessible for byers on eBay. For example, on its eBay Auction’s
“About Sotheby’s” page, several sales such as Elvis Presley’s peacock jumpsuit, Apple I
computer and Stan Smith prototype shoes are selected to show what the auction house
intended to promote, “wonderful objects at every price point.” 120
5.4 Artspace Marketplace (www.artspace.com)
In 2011, Artspace Marketplace, a private company with the mission “to make it easy for
people to discover and collect fine art from renowned artists, galleries, and cultural
institutions worldwide,”121 was co-founded in New York City by Catherine Levene and
Christopher Vroom. Catherine Levene, CEO of Artspace, likes art collecting and formerly
was COO and General Manager of DailyCandy, a female lifestyle and shopping e-newsletter
and website providing women with information of the trends in culture, fashion, food and so
on.122 In an interview, Catherine Levene said that people used to think women would not buy
clothing online; however, women’s fashion is the largest online category now, and she wants
to do the same for the art sector. 123 Christopher Vroom, former Chairman of Artspace, also
founded Artadia in 1997. Artadia is a non-profit art organization based in Brooklyn that
provides “a network of social and professional support to artists.” 124 Moreover, from
Christopher Vroom’s point of view, a lot of people benefits from the art ecosystem, however,
artists often get little sustain and viable support, and he wants to create a “systematic” way by
Katya Kazakina and Spencer Soper, “othe s EBa “ale to Offe Wo ks Ma ‘a , “i at a,
Bloomberg, accessed 2 March 2017, https://www.bloomberg.com/news/articles/2015-0317/sotheby-s-ebay-sale-to-offer-works-by-man-ray-sinatra.
120 A out “othe
s, eBay, accessed 1 March 2017,
http://www.live.ebay.com/lvx/sothebys/auctionhouse.
121 A out, Artspace, accessed 1 March 2017, https://www.artspace.com/about.
122 Cathe i e Le e e, Crunchbase, accessed 1 March 2017,
https://www.crunchbase.com/person/catherine-levene#/entity.
123
A tspa e: Co te po a A t s Nook i The Cloud, Fast Company, accessed 1 March 2017,
https://www.fastcompany.com/1757045/artspace-contemporary-arts-nook-cloud.
124 Fou de Ch istophe V oo
featu ed as W“J s Do o of the Da , Artadia, accessed 1 March
2017, https://artadia.org/news/founder-christopher-vroom-featured-as-wsjs-donor-of-the-day/.
119
33
using “not only financial help, but community support, critical evaluation, public validation
of work and connections to museums and galleries” to support artists. 125
In terms of the financial situation, since 2011, Artspace has had four funding rounds and
raised about $14.45 million investment. In 2014, the company was acquired by Phaidon, a
well-known fine art book publisher privately owned by Leon D. Black, a famous art collector
who paid $120 million for Edvard Munch’s the Scream in 2012 and owner of a private equity
firm Apollo Global Management.126 Phaidon announced that Artspace has attracted many
collectors and that this acquisition was supposed to give the publication company access to
more art collectors. 127 Christopher Vroom left the company after this acquisition.
5.4.1 Business Model and Operations
Both founded in 2011, acquired by other companies in 2014, and following this trend of art ecommerce, Artspace and Saatchi Art have several similarities. On the surface, these two
marketplaces both have e-commerce-like website design. In each marketplace, website
curators pick several works as recommendations for users, and there are free advising
services. In terms of the nature of the business model, they both gain profits from the
successful sales made on their platform.
However, Artspace Marketplace has a different supply chain, because compared with Saatchi
Art, which mostly directly gets works from artists, Artspace has various sources. On its
platform, there are over five thousand artists from over thirty countries. Firstly, it also
directly works with artists including famous names such as Jeff Koons and emerging
artists.128 Secondly, the platform also has partnerships with galleries, non-profit organizations
and museums all over the world such as the Guggenheim, the Whitney Museum and the
Serpentine Galleries. 129
125
Ibid.
Willia Alde , Leo Bla k s Phaido Bu s A tspa e, a O li e A t Ma ket, The New York Times,
accessed 1 March 2017, https://dealbook.nytimes.com/2014/08/14/leon-blacks-phaidon-buysartspace-an-online-art-market/ .
127
Ibid.
128 A tists, Artspace, accessed 1 March 2017, https://www.artspace.com/artists.
129 Pa t e s, Artspace, accessed 1 March 2017, https://www.artspace.com/partners.
126
34
Like Paddle8, Artspace tried to sell products that are not fine art works. However, Artspace
provides its users a very clear sense of categories. Besides the fine art marketplace, there are
two separate sections called “Design Objects” and “Bookstore.” “Design Objects” deals with
mass-produced or limited edition design products, and it has its own sub-sections: (1) “For
the Home”, (2) “Beach and Leisure”, and (3) “Fashion”. For example, it not only offers
Mondrian chairs and After Andy Warhol rugs for the home, but also Takashi Murakami
skateboards and Mickalene Thomas iPad case for the daily use. Those famous artists’ names
provide culturally added values to these design objects, which are less expensive compared
with Artspace’s fine art works. Moreover, in the “Bookstore” section, its parent company
Phaidon’s books make up the majority. They often do not have limited editions, thus are
relatively more available to the public. However, it also offers more expensive limited edition
artist books such as Kiki Smith’ signed book Still Life (1/60 editions, $18,000).
5.4.2 A Virtual Art World 130
Different from Saatchi Art, who is trying to democratize or “Walmartize” the consumption of
arts, Artspace Marketplace has another approach. In an interview, Catherine Levine
mentioned that Artspace’s value chain is based on the collaborations with different third party
groups in the art world, 131 and the company’s “curated partnership program is the very
foundation of its business.”132 Therefore, it is believed that Artspace not simply tries to create
a virtual gallery or auction house, but to build a virtual ecosystem, in Howard S. Becker’s
definition, an art world where the art consumption is a part of and a result of a collaborative
work involving all different units such as galleries, publications, cultural intuitions and so
on.133 According to Jane Han, former Artspace Marketing Manager and Assistant Curator,
this way of partnering with museums, galleries, and artists all over the world is an important
130
Another online auction and art data start-up Artsy (www.artsy.net) has similar approach, as it
tries to feature the o ld s leadi g galle ies, useu olle tio s, fou datio s, a tist estates, art
fairs, and benefit auctions, all i o e pla e, a d it has ell-designed editorials and education for art
collecting beginners. However, since it is not only an online art seller, but also an art data provider,
its business model is very different from five cases mentioned, it is not selected in the thesis.
131 “i o e Fo
a , A‘T“PACE: He e's Ho the Ne Ge e atio of A t Colle to s Will “hop,
Business Insider, accessed 1 March 2017, http://www.businessinsider.com/artspace-catherinelevene-art-collections-online-2011-6.
132
Pa t e I ui ies, Artspace, accessed 1 March 2017,
http://www.artspace.com/partner_inquiries.
133 Howard S. Becker, Art Worlds and Social Types (London: SAGE Publications, 1975), 1.
35
and unique part of Artspace's marketing strategies.134 Moreover, this concept of partnership is
also echoed in Artspace’s expansion strategy. For example, in 2013, the company bought VIP
Art, an online art fair, and the company claimed that “VIP’s vibrant community of collectors
and world-class gallery partnerships bolsters Artspace’s industry-leading position as the only
transactional platform online.”135 Rather than creating a single channel to sell art works,
Artspace integrates different channels. For a physical gallery, it needs to regularly have
exhibitions, therefore, certain artworks may not be showed, and they can be put in Artspace.
For cultural institutions, it is also an effective way to reach a large audience and sell art
works. By creating a virtual art world, Artspace’s brand is differentiated from its rivalries,
because it gets more supports from different groups of people in the art world.
5.4.3 Easy Collecting
The virtual art world may bring complexity from the real art world, because the common
audience not only need to be familiar with the platform, but also have a certain understanding
of the third-party partners. How to find art works they like or they want becomes a question,
which requires knowledge of the art world and a long-time building-up of personal artistic
tastes and intellectual preference. Therefore, to reach the mass public, anther Artspace’s key
strategy is to directly create “a more populist approach to collecting.” 136 It means that starting
a collection is much easier and the platform provides straightforward guidance for the
audience to explore and consume the art world.
Firstly, the publically collected data from users is used to guide the collecting, which is
personal. On the homepage, Artspace has suggestions of art works for users based on their
viewing histories and the works’ popularity. Like Amazon recommendations, this feature
makes the collecting much easier. Secondly, the classification of art and the naming of
different art types provides important information, and not like galleries having obscure titles
and explanations of artists’ styles for their exhibitions, Artspace deals with it in a very
populist way. For example, it has a “Movements & Styles” page, on which users can view
Ja e Ha , Re: Interview questions on the online art market and Artspace, E-mail message to
author, 8 March 2017.
135 K le Cha ka, A tspa e A ui es VIP, Co ti ui g the A t E-Co
e e Wa s, Hyperallergic,
accessed 1 March 2017, http://hyperallergic.com/68042/artspace-acquires-vip-continuing-the-art-ecommerce-wars/.
136 “hoppi g the Museu
A hi e, The Wall Street Journal, accessed 1 March 2017,
https://www.wsj.com/articles/SB10001424053111904716604576544522366191148.
134
36
categories based on a simple “Art History 101” naming rule. For example, there are
“Feminist Art,” “Skateboard,” and “Dada.” These categories are used to help users to refine
their art world journey and “lead them to the work they are looking for.” Moreover, users
also can browse by medium and subject matter. 137 In each category, Artspace uses Wikipedia
style introductions. In this way, even art collecting novices can readily start their study, feel
confident, and thus collect in a quick way. Additionally, for more advanced customers who
have specific purposes, Artspace also creates filters for them. For example, there are
“Artspace Editions,” which are “exclusive and affordable editions brought to customers by
Artspace”; “Editor’s Picks, artworks recommended by Artspace’s expert editorial team”;
“Rising Stars, great investment pieces by artists or on the rise”; “Steals” that are “the best
bang-for-your-buck deals on Artspace”; and “Straight from the Studio, works by emerging
artists partnered directly with Artspace.” Again, the naming is straightforward and populist.
And the art world’s complexity is cleared up by a simple classification. Therefore, different
from the real art world, where a lay person may have pressure or hesitation asking too simple
questions, Artspace makes the art consumption an easy collecting and a “exploring of your
interests” (based on recommendation algorithm). It is a de-coding of the jargons and obscure
artistic and intellectual contents often used by the art world. The platform simplifies the
process and makes it populist.
5.5 Sedition (www.seditionart.com)
Founded in 2011 by English gallerist Harry Blain, owner of Blain | Southern, Sedition is a
London based online platform that enables artists and collectors all over the world to sell,
collect and trade limited edition digital artworks. Different from online platforms previously
mentioned, Sedition does not involve any physical artworks. Works sold on the platform are
totally digital. They are all still photography, video work or animation in their own digital
formats.
The company chose this very niche market, because it noticed the trend in the recent years
that the use of digital devices and screen based media such as smartphones, tablets,
computers and TVs has been quickly increasing. The founder Harry Blain has directed
several internationally known physical galleries and has been successful in the London art
137
Mo e e t a d “t les, Artspace, accessed 1 March 2017, http://www.artspace.com/tags.
37
scene. In an interview, he said that the Internet has become a very important media, which
enables people who may not have access to traditional art and cultural systems such as
museums to appreciate artworks online. He founded Sedition, because through the Internet
and new technologies, he wants to provide an accessible way for same group of people to
look, identify and even collect their first fine art works. 138 Furthermore, he also mentioned
that in the history, the art business is always for the elites, and nowadays, even for some
professionals in other fields such as technology or finance industries, they still may not know
much about how to collect art, and it becomes a “daunting” thing for them.139 Therefore,
Harry Blain believes that one of Sedition’s uniqueness is that it is an access point for a wider
audience, and everyone can learn on the platform and feel comfortable with buying
artworks.140
5.5.1 Business Model and Operations
However, even for art professionals, “digital limited editions” is also a very new and unclear
idea. Because “digital” often means “can be endlessly copied,” which is an opposite of the
“limited editions.”141 Therefore, Sedition created its own rules and explanations of its core
products and services, and tried to build a very exclusive ecosystem of these “digital limited
editions” art works around the Sedition platform.
There are several aspects of this ecosystem. Firstly, Sedition has an official marketplace
representing and selling digital editions of works of nearly one hundred and fifty artists.142
According to company’s CEO Robert Norton, Sedition only went for artists that “already had
a big following and a proven secondary market.”143 Moreover, these artists often produce
works in editions of between thirty and ten thousand, which can be sold for between five
dollars and one thousand dollars. By providing these digital editions, anyone can collect
works that may be very expensive in the traditional market. For example, a digital piece of
Damien Hirst Xylosidase with ten thousand editions can be bought for twelve dollars. For
Ha Blai - Fou de of “editio A t | “ili o ‘eal Video , London Real, accessed 5 March
2017, https://www.youtube.com/watch?v=rQHjj1s4W0o.
139 Ibid.
140 Ibid.
141
Ibid, 123.
142
B
Ma h
, the offi ial a ketpla e has
diffe e t a tists o ks.
143 Oli ia “olo , Ca “editio C eate a Ma ketpla e fo Li ited-Ediito Digital A t?, Wired, accessed
10 March 2017, https://www.wired.com/2011/11/sedition-limited-edition-digital-art/.
138
38
these works, the platform makes profits from the sales. After the purchase, buyers will get a
digital certificate that is “signed, numbered and authenticated by both the artist and Sedition”
for each digital edition. Therefore, even if the digital work may be hacked or copied, the
certificate becomes the only prove and protection of buyers’ ownership. The art and
certificate are stored in buyers’ “Vault,” an online storage space for users to view their
collection. However, neither art works nor certificates can be printed to become physical,144
which means the collecting on Sedition is completely online, digital, and exclusive in its own
ecosystem.
Furthermore, since the “Vault” is exclusive to Sedition, and the digital editions can be “sold
out,” the site also created an exclusive “secondary market” for “digital limited editions”
called “Trade.” In “Trade”, users can post their digital collections and resell them, and this
marketplace has a bidding system. Sellers give their asking prices, and potential buyers can
bid on the works. If the bid is lower than the asking price, the work will not be sold until the
seller accepts the bid or other people outbids. 145 Using the Xylosidase piece as an example,
the original price was twelve dollars, and since this work was sold out, the highest biding
price for one digital edition now was sixty dollars,146 which was five times of the original
price. However, since its original price was relatively low compared with the most art works
in the physical art market, the investment values of digital editions became very low, and
there are not many biddings on “Trade.” It is believed that since the platform is at its early
stage, “Trade” only provides a sense how the secondary market may work and an excitement
of trading for art buyers on Sedition, but not creates an exclusive real art market.
Lastly, Sedition also encourages anyone who have artworks or call themselves artists to sell
their digital editions on “Open Platform.” However, this marketplace is totally separate from
the marketplace for featured artists, and it is believed that there are few people collect these
works. Because anyone can submit art works, little efforts were made by the platform to
legitimize, and highlight these artists and their works, therefore, it is very hard for new art
buyers to choose and collect.
Ho it o ks, Sedition, accessed 5 March 2017, https://www.seditionart.com/how-it-works.
A d Q&A, Sedition, accessed 5 March 2017, https://www.seditionart.com/support.
145 Ibid.
146 By 23 March 2017.
144
39
5.5.2 Education of Buying Art
In the interview with Ashley L. Wong, Head of Programmes and Operations at Sedition,
claimed that the company’s target audience are art professionals, but in a broader way.
Sedition also tries to reach early adopters and technology enthusiasts and those interested in
lifestyle and culture in general.147 Moreover, she brought the idea of “educating people”
about how to view, display art works, build knowledge and appreciation of digital artworks,
and know and understand artists through developing contents such as featured artists
interviews, promoting their physical exhibitions and other artists working in the field. 148 In
this case, even though digitalization has brought a totally new way of collecting art works,
what Sedition tries to do is still helping the broader audience to build up their own cultural
and intellectual capital, which enables them to more easily be part of the art world, and thus
readily consume the arts. Moreover, going back to “Open Platform,” since these outside
artists lack these supports, they are much less consumed by the audience.
Ashle L. Wo g, Re: Art Market Informational Interview Request, E-mail message to author, 15
March 2017.
148 Ibid.
147
40
Chapter 6 SUMMARY AND CONCLUSION
6.1 Summary
Through the qualitative research and the lens of classical theories of Bourdieu and Becker,
five case studies of five online art sellers have been done in this thesis: (1) Paddle8
(paddle8.com), (2) the partnership between traditional auction house Sotheby’s and ecommerce eBay (www.live.ebay.com/lvx/sothebys), (3) Artspace (www.artspace.com), (4)
Saatchi Art (www.saatchiart.com), and (5) Sedition (www.seditionart.com). Several aspects
of these companies such as their digitalization, business model, and digital marketing have
been investigated and discussed.
To summarize, it is found these online art sellers as mentioned have several similar
characteristics to some extent:
One. To successfully build a brand in the online art market, an art seller needs two
contributing elements. Firstly, it needs a certain degree of cultural industry digitalization,
which not only requires the basic application of digital technologies and the Internet, but also
technological innovations that aim to change the pre-existing art market game rules.
However, on the other hand, a successful online art seller still needs a certain degree of
credibility or legitimacy passed or borrowed from units in the pre-existing art market,
because art works, as special commercial products, involve not only economic or functional
values, but also symbolic, cultural and intellectual values, and these extra values often can
only be confirmed by certain groups such as educational and cultural institutions or specialist
in the market.
Two. Therefore, online art sellers are often driven by two types of forces. Firstly, in the
context of digital capitalism, the substantial venture capital that chases technological
innovations (often tech start-ups), and excepts market expansions and economic returns. On
the other hand, these companies also have strong cultural ambitions, and claim to build a
better “art world.”
Three. Another significant feature for these online art sellers is that compared with physical
art sellers, the nature of selling art online makes online art sellers offer art works that range at
lower prices, which requires them to reach more customers than ever to make profits. This
pragmatic need, along with supports from digitalization and tech start-ups’ common belief of
41
the democratization of high-end culture, leads to art sellers striving to popularize the
consumption of art.
Four. To achieve the popularization, which means the once elitist and mysterious art market
rules can be understood and appreciated by the mass public, online art sellers either provides
speed-up education for them to understand the process, or simplifies the process that often
requires buyers’ long-time accumulation of cultural and social capital, also highlighting the
functional values of the art works rather than their artistic values.
6.2 Conclusion
It is concluded that the success of five cases mentioned in the thesis inevitably requires the
popularization of buying art through simplifying the traditional process of the art
consumption that often requires buyers’ long-time accumulation of cultural and social capital.
By using different marketing approaches, they have commercialized art, but having little
impact on breaking down the barriers between the art market that is elitist and intellectual and
the art market that caters to the public tastes.
Moreover, based on the cases studies, to show these different approaches, the 3Cs and 4Ps
marketing is created as following.149
(1) Paddle8
Corporation
Competition
Customer
Product
Price
Promotion
Placement
Reputable
brand,
growth
through
investment
and market
expansion.
Highly
competitive,
needs of
merge and
acquisition.
Traditional
collectors,
(young)
technology
savvy art
collecting
beginners.
Successful
branding,
multiple
categories,
moderate
before and
after sales
services,
customized
services.
Product
line
pricing,150
simplified
payment
process,
no
discounts.
Successful
public
relations,
single
channel,
moderate
message
frequency.
Online,
private
sales,
limited
market
coverage.
149
David Needham, Business for Higher Awards with Marketing for Higher Awards (London:
Heinemann, 1999) and Bob Lauterborn, New Marketing Litany: Four Ps Passes: C-Words Take Over,
Advertising Age 61(41) (1990): 26.
150 Paddle8 separate its products into cost categories to create several different quality levels in the
minds of users.
42
(2) Sotheby’s/eBay
Corporation
Competition
Customer
Product
Price
Promotion
Placement
Reputable
brand,
abundant
industry
experience
and network.
Highly
competitive,
more brand
reputation
than general
competitors.
Art lovers
in general,
entry level
collectors
with basic
technology
skills.
Limited
product
range,
high level
before and
after sales
services.
High
value
pricing,
smooth
payment
process,
no
discounts.
Multiple
channels,
public
relations,
moderate
message
frequency.
Online,
wide
market
coverage
through
eBay.com.
(3) Artspace
Corporation
Competition
Customer
Product
Price
Promotion
Placement
Abundant
partnership
resources,
successful
editorials.
Highly
competitive,
a strong
industry
network.
Young and
artsy users
with certain
art and
collecting
knowledge.
Multiple
categories,
high level
before and
after sales
services,
customized
services.
Product
line
pricing,
smooth
payment
process,
discounts.
Multiple
channels,
partnerships,
public
relations,
high message
frequency.
Online,
exclusive
user sales,
limited
market
coverage.
(4) Saatchi Art
Corporation Competition
Customer
Product
Price
Promotion
Placement
Parent
company
supports,
strong
advertising
resources.
Entry level
fine art and
decorative
art buyers
with
limited
collecting
needs and
knowledge.
Limited
categories,
moderate
before and
after sales
services,
moderate
customized
services.
Penetrating
pricing,
smooth
payment
process,
discounts.
Multiple
channels,
strong
social
media
presence,
high
message
frequency.
Online,
large
market
coverage
through
large scale
advertising.
Highly
competitive,
homogenization
of products.
(4) Sedition
Corporation
Competition
Customer
Product
Price
Promotion
Placement
Low brand
awareness,
unique
product and
services.
Moderate
competition.
Collectors
in general,
technology
savvy entry
level digital
art
collectors.
Very
specialized
product.
Penetrating
pricing,
smooth
payment
process,
Discounts.
Limited
channels,
high
message
frequency.
Online,
limited
market
coverage.
43
6.3 Further Research Suggestion
The thesis provides several insights into the online art market and online art sellers, however,
because of the limited resources, there are number of further studies that can be done based
on its investigation and conclusion. For future researchers, it is believed that: (1) an
international study of a group of online art sellers should be done to provide a clearer picture
of the global online art market and similar characteristics of online art sellers. (2) because
Bourdieu’s theory of the art field involves the historical development of the art market, a
research should be done to investigate the long history of the art market, and how
digitalization may have impacts, (3) an investigation particularly focusing on online art
buyers should be done, because this thesis did not investigate the motivations and behaviours
of online art buyers, which impact the art market significantly, and (4) more and more online
art sellers are transferring their platforms to mobile devices such as smartphones, and there
are also mobile-only art sellers, how this type of digitalization may influence the market and
art buyers also should be questioned by the future researchers.
44
APPENDIX
E-mail Interviews
I. Interview with Robert Read, Head of Art and Private Clients at Hiscox
1. In the report, it is showed that many Generation Y (as future online art consumer)
buy art because of "emotional" and "investment" reasons. Do you think it has
influences on online art platforms' strategies and selection of artworks? If yes, what are
those influences; if not, how are online art platforms dealing with these motivations?
I feel the platforms’ strategies target more the emotional motivation of the buyers. If a
buyer’s motivation is for investment, they will not need to be enticed to purchase the items as
much as a speculative collector who is purchasing for emotive reasons.
2. What do you think are those "emotional" motivations for online art buyers?
A personal connection to the artwork. It is hard to quantify what these emotional motivations
are as they are so personal to each collector.
3. What do you think is the key motivation for the most online art buyers today?
Ease of access and the perceived view that they may get a better deal online.
4. Do you think Baby Boomers and Generation Y art buyers have different online art
habits and preferences? If there are differences, what do you think contribute to these
differences? If not, why they are going to become similar in the digital age?
I feel their online purchasing habits is not specific to art but the purchasing of any items
online. Generation Y are generally more tech savvy so are more likely to purchase art online.
For this reason, I feel the online art market will continue to grow, as Generation Y become
older, with more disposable income to spend on luxuries such as art.
5. In some traditional art market theories, social and cultural values play a very
important role in art consumption behaviors, do you think these are still significant in
the online art market? If it is significant, how it may influence online art platforms'
marketing strategies? If it is not, why?
I feel these values are still present in the online art market. By purchasing the art online, this
does not take away any of the values or tastes for art from the consumer, it merely provides a
new channel for the art to be bought. However, it is much easier to view art from many
different cultures online, so this may lead to collectors buying art they may never have
looked at before the presence of online platforms. I therefore feel that online platforms do
45
cater for the traditional values of the collector, but are far more willing to stray from these if
they desire.
6. Compared to traditional ways of promoting art (VIP opening/preview, private dealer
consulting etc.), do you think online art platforms' promotions (often borrowed from ecommerce e.g. e-mail, discount, fixed price and social media) have advantages or
disadvantages? What are those advantages or disadvantages.
Overall I feel it is advantageous to have the online platforms promotions, as a larger quantity
of art can be viewed by potential buyers more frequently. However, traditional methods will
still play an important role as viewing art in person can have a very different emotional
response to online.
7. What do you think in terms of how art buyers find artworks in the digital age?
Generally, more people are beginning their search online. For lower value art, this will be
purchased online too. For the more expensive art, a collector more than likely still want to
view the artwork in person before purchasing.
8. What do you think of online art platforms' website design, their use of language and
tones in general? To what extent, do you think they make online art platforms different
form traditional art venues?
From my experience, I don’t feel they differ too much.
9. What do you think are the reasons for most traditional galleries do not yet have an
online strategy? What are barriers?
To move from a traditional gallery to have an online strategy is a huge shift in business
strategy. Many do not have the technical knowledge or expertise to undertake such a
transformation, so have shown reluctance to do so.
10. What do you think are the differences between doing auctions online and doing
auctions offline for auction houses? and for art buyers?
Online is more cost effective, offline is more personal and more enjoyable.
11. What do you think are the common features (subject matter, media, artist type and
price) of most artworks available online in general?
The most common feature for online art is the price. Typically, online deals with low value
high volume works. Traditional galleries will typically specialize in high value low volume.
46
12. Why most of galleries that have online art services are dealing in collectibles such as
watches, design, furniture and photography?
Mainly due to customer appetite. Online art services are first and foremost a business looking
to make money. If the customers want more than just art, they will provide just that!
It is said that "Sotheby’s have invested heavily in their digital presence and in the adjustment
towards catering for new art and collectible buyers who increasingly prefer to buy online.”
And Sotheby’s now not only has BIDnow, but also has a partnership with eBay
(http://www.live.ebay.com/lvx/sothebys),
13. What do you think are the incentives for Sotheby’s having a digital presence on
eBay besides its own online auction page?
Ebay is the number one online art marketplace, by developing this partnership they will be
increasing their online presence and hope to make more sales.
14. What do you think are the potential audiences of BIDnow and Sotheby’s on eBay?
The same as most other online platforms. Anyone who has an interest in purchasing artworks
will be their potential audience.
II. Interview with Jane Han, former Marketing Manager and Assistant Curator at
Artspace
1. What do you think are key motivations for online art buyers?
I think key motivations for online art buyers are the ease of buying and delivery process.
2. Do you think these preferences and motivations have influences on online art
platforms' strategies (marketing, operation etc.) and selection of artworks?
Yes.
3. If yes, what are those influences?
There are various types of arts: painting, prints, sculptures, new media, designed objects, etc.
Although paintings may be hard to grasp in online, prints and sometimes small objects are
foreseeable in real life with HD image of the works. Therefore, influences will include
curators in choosing the works that will work best for our site and our marketers focusing on
works that most interests our customers.
4. Do you think Baby Boomers (53-71 years old) and Millennials art buyers have
different online art habits or experience?
47
5. If there are differences, what do you think contribute to this? If not, why they are
similar in the digital age?
6. In some traditional art market theories, social and cultural values play a very
important role in art consumption behaviors, do you think these are still significant in
the online art market? If it is significant, how it may influence online art platforms'
marketing strategies? If it is not, why?
I am unsure of these.
7. Compared to traditional ways of promoting art (VIP opening/preview, private dealer
consulting etc.), what do you think are the unique parts of Artspace's marketing
strategies? Do you think Artspace's promotions have advantages or disadvantages?
Artspace is the online marketplace for contemporary art, partnering with museums, galleries,
and artists all over the world. I think one of the unique parts of Artspace's marketing
strategies is the partnership. Through numerous partners all over the world, Artspace is
naturally making a great marketing to the art specialists, globally. Many other platforms may
be partnering with the museums and galleries, or artists alone (not all three). This special
partnership is creating unique marketing of Artspace brand.
8. What are those advantages or disadvantages?
Partnership not only brings more unique works to the site, but it also gives unpredicted
synergy effects, which could be advantage or disadvantage.
9. What do you think in terms of how art buyers find artworks in the digital age?
Searching and surfing around.
10. What do you think social media can bring to the online art platforms?
Connections with the collectors.
10. What do you think of Artspace's website design, its use of language and tones in
general?
We are constantly changing the design, language and tones to see what will work best for the
site. I think every time changes are made, it's getting better and bringing more convenience to
the collectors in searching and purchasing of the works.
11. It is found that Artspace has a fixed price strategy, how it makes it different from
auction houses? What do you think are benefits and costs?
I am unsure of this.
48
12. Artspace has its own art review articles, do you think they are part of the promotion
or just art news?
I believe our editorials are very ever-green news.
13. What do you think are the most successful marketing strategy used by Artspace?
We had good successes from the art fairs and email marketing.
14. What do you think are the key audiences of Artspace?
People who are interested in the art world!
III. E-mail Interview with Ashley L. Wong, Head of Programmes and Operations at
Sedition
1. What do you think are the main motivations for people to buy artworks online in
general?
People buy works online because it's more convenient than having to go to the gallery. They
can browse and discover new artists and artworks as a quick rate.
2. Some scholars say that in the traditional art market, social and cultural values play a
very important role in art consumption behaviours. Are they still significant in the
online art market? If they are, how it may influence digital art firms' marketing
strategies? If not, why?
Social and cultural values play a role in everything. Those who purchase online may be more
digitally savvy to use the internet as a tool to find new artists and artworks. They will often
use reliable sources and websites.
3. In terms of Sedition, since works are all in digital media, what do you think are the
advantages or disadvantages for people to consume art in this way.
The advantages are you can take your artwork anywhere you go and you can display them on
any screen or device.
The disadvantages are you must have a certain understanding of digital technology to use and
display the works on different devices.
4. What are the Sedition's strategies to promote this new way of consuming artworks?
One is to educate people about how to view their artworks and to provide many ways to
display their art on different devices by constantly improving our apps and coming out with
49
new products like Art Stream and Sedition Frame. We also need to educate people about
artists who create works and to build knowledge and appreciation of digital artworks. We do
this by developing content around the artist through interviews and promoting their
exhibitions and other artists working in the field.
5. It is noticed that Sedition has both established and emerging artists, to what extent,
do you think the fame may influence their prices and sales?
Yes. The fame of the artists influence the price of the work, but we also consider the edition
size, demand for the artwork (as prices will often increase as it sells out) and the complexity
of the work.
6. In terms of Trade, the marketplace for people to sell and bid artworks, what is the
original intention for it? Do you think it follows the traditional rules for secondary art
market?
The idea of Sedition is to replicate how artworks are sold in the art market, online. If
someone buys a work from Sedition, they should be able to re-sell it like in any ordinary
marketplace. The only requirement is the artwork must be sold out before they can sell their
work. This is to ensure it does not devalue the primary market.
7. Who do you think are your target markets/audiences?
Our target audiences are art lovers and art professionals often 25-55 years in age, university
educated with an income of over $75K. Since artworks are affordable our audience is broader
though we have a focus on early adopters and technology enthusiasts and those interested in
lifestyle and culture.
8. Frame is a new feature at Sedition, how the idea of promoting physical showcase for
digital artworks may influence the future of Sedition? What are the thoughts behind it?
The idea of the Sedition Frame is to allow collectors to have an elegant display and dedicated
device for showcasing their artworks using devices they may already own like an iPad or
Samsung tablet. This is one step towards developing a fully operational Sedition Frame that
can be controlled using a smart phone and Sedition app.
9. What do you think are the main differences between Sedition and other digital art
firms such as Paddle8 and Artspace, who operates more like traditional e-commerce?
The main difference is Sedition sells works that are only digital artworks to be experienced
on screens and devices. Paddle8 and Artspace sell and auction traditional artworks online.
Sedition creates a whole system for buying, accessing and displaying digital works on
screens.
50
10. It is noticed that buyers can follow buyers and artists, which makes Sedition likes a
community, but there is little social networking, what are the thoughts behind this?
What do you think of having a community at Sedition?
Collectors can follow artists to receive new and updates from artists. When a collector
follows an artist, they will receive emails of any new artworks and news updates from that
artist. Collectors can also follow other collectors and friends. There is also functionality to
message artists and collectors through the platform. These are private messages so they are
not visible. Often, we find many collectors prefer to keep their profiles private and not reveal
which artworks they have purchased. Some people do not want to share that information;
others want to show off or don’t mind that people can view their profile. Of course, the social
networking can be improved, but it is not the primary goal of our website which is to promote
and share artists and artworks, and a new way of collecting digital artworks. Additionally,
social media provides the primary function for social networking including Twitter,
Instagram and Facebook.
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