Understanding the Art Market
The contemporary art market is a global economy largely operating in New York and London with satellite centres throughout Europe, America, Asia and increasingly the Far and Middle East.
The contemporary art market shows the most recent, often the most challenging new forms of art being produced by artists internationally.
It is the place where art is given tangible financial value.
The market divides into the `primary market’ and `secondary’ market.
The primary market is where contemporary art is sold for the first time; mostly commercial galleries which represent artists and have a direct working relationship with them.
The secondary market is where a work is sold for a second or more times, e.g. auction houses and via secondary dealers.
The art market is global with the influential agents within both the primary and secondary markets operating internationally.
This especially includes artists – an artist can be born in one part of the world, educated in another, live and work somewhere else and be represented internationally by two or three galleries across the world.
The ease of international travel and the Internet mean the market now operates through an ever expanding globalised network of established and emerging centres where artists, galleries, collectors converge for major events to do business and network in person and online.

The international art market comprises commercial galleries, artists, art dealers and agents, art fairs, art consultants and auction houses.
There is also a market for so called `nonlegitimised channels’ such as highstreet shops, open studios and regional art fairs – the so-called `domestic market’ selling `non-critically’ engaged work.
Outside of London, Glasgow is the second international market for critically engaged contemporary art in the UK, but the infrastructure for selling critically engaged work is largely undeveloped outside of London, although there is a significant market for sales of domestic work.
The art market is unregulated – the different agents the market, be they artists, dealers, agents or auction houses all have their own protocols and these are never written down and rarely discussed, making the market a difficult place to navigate for the uninitiated!
The key agents in the art market are:
Artists
Usually trained by Fine Art or related degree (but not necessarily)
There are very many different types of artists but serious collectors are interested in those who are `critically engaged’ – this means there work is collectively considered by artists’ peers and art world professionals (academics, curators, dealers, other artists) to be sufficiently relevant to the current discourse in contemporary visual theory and history of art to secure what is called
`subsc ription’. I’ll explain what this is later.
Commercial Galleries
Commercial galleries form part of what is known as the primary market, generally.
The role of the gallery is to promote the artist to the key players within the market
– private collectors who buy work, and public institutions which give visibility and critical endorsement to artists and access to wider audience.
The job of the primary market agent if to get their artists’ work placed in the right public and private collections as this secures critical and financial value for the artists they represent and ensures their artists have the optimum chance of finding a place in the history of art.
Controlling the stock of an artist and vetting purchasers is an important function of managing an artists’ career and developing their market.

Art Fairs
The art world is increasingly event driven and the international art fair has become increasingly more important along with biennales, the auction house weeks and grand museum openings, all of which compete to attract the collectors’ attention.
There are currently approximately 80 fairs worldwide but the major art fairs are:
• New York Armory Show in March
• New York Frieze in May
• Art Basel in June
• Artforum Berlin in September
• Frieze in London in October
• Art Basel Miami Beach in December
The leading commercial contemporary art galleries all compete to participate in these key art fairs, which have become increasingly important for networking, visibility and sales.
Public institutions arrange their high profile exhibitions to coincide with these major events and a number of satellite fairs showing younger, less established galleries also congregate around the international fairs - all taking advantage of their pulling power in attracting international art world VIPs and collectors to town.
Auction Houses
Auction houses form part of the secondary market.
They trade works that are being sold on from private collectors and secondary dealers to the open market.
Like primary market agents, they develop relationships with collectors, offer advice on developing a collection and organise their pre-sale viewing rooms to look like curated shows.
Many collectors are attracted to the opportunities to buy at auction because it is perceived to be transparent and democratic – if a collector has sufficient funds, the work is theirs!
There is no convoluted, opaque vetting process, no queue.
Whereas the primary market dealer’s role is to represent their artist and his/her market, the business of the auction house is more straightforward, simply to sell to the highest bidder.
Collectors who cannot obtain works by a certain artist on the primary market may

acquire them at auction and in the case of some artists they may be the open route to works jealously protected by their dealers.
Art Consultants
Art consultants provide specialist fee-paid services to collectors on what to collect and are often paid on commission on sales.
Ideally they should encourage the collector to explore and discover their own interests.
Their relationships with galleries mean they provide reassurance and thereby access to works which, in a fiercely competitive market, would not otherwise be available to someone unknown to the gallery.
Fine Art Graduate Shows
Graduate shows are increasingly regarded as a means by which `to scout out the hottest new talent’.
Students have, as a result, been encouraged to become more professional and career-orientated in the presentation of their work in order to attract the attention of dealers and collectors, who in turn compete with each other to make new discoveries.
How Art Is Given Financial Value
In the art market, financial value is linked to collective critical endorsement and carefully managed release of works entering the right public and private collections.
In an otherwise unregulated market where anyone can proclaim themselves as an `artist’ and anything can claim to be `art’, the validation of work is carried out by artists’ peers.
Networks of art world professionals – including academics, curators, dealers, artists and buyers – provide advocacy and endorsement for an artist’s work through exhibitions, critical appraisal and private and public purchases.
This process of filtering and legitimising is called `subscription’ and the value of an artist’s work increases in direct proportion to the subscription it attracts and sustains.
This process is reflected in an artist’s CV and both curators and collectors will look to see to what extent an artist has secured the interest of critically-engaged opinion formers and public institutions in the form of critical-writing, prizes,

awards, residencies, exhibitions and ultimately, acquisitions into public collections.
All players within the art market
– artists, curators, dealers and collectors – view the public institution and its collection as the most prestigious destination for the work they make, sell or buy.
From an artist’s perspective, subscription can look like this:
Their graduate show where they attract the attention of peers, grass-roots art spaces, collectors and gallerists interested in emerging artists.
Participation in a group or solo show in a grass-roots artist-run space.
Representation by a gallery showing emerging artists.
Being nominated for prizes, residencies, awards which bring prestige, opportunity and visibility.
In time, solo shows in critically important public venues and more visible gallery representation.
Acquisition into corporate, private and ultimately public collections.
Accordingly, when a curator or collector is interested in an artist’s work – be they collecting for a public or corporate collection or their own private collection – they will research the artist and access the following criteria to ascertain if the artist is critically endorsed and to what extent:
• What is their age?
• Did they study for a Fine Art degree and if so when and where?
• Any group shows? Any solo shows? Where and curated by whom?
• Commercial representation – do they have a gallery, again, where and who?
• Participation in any international events or projects? Biennales? Residencies?
• Any awards or prizes or residencies?
• Any critical writing about the artist – bibiliography?
• Any private or corporate collections?
• Any public collections?
Things Artists Can Do That Are Useful
• Be within a community of artists – recommendation and endorsement by artists is influential in relation to curators and commercial agents and collectors – and it is important to develop criticality and sustaining engaged practice and for peer support.
• Stay informed – there are a lot of very talented people chasing the same work and opportunities. Make sure you know of opportunities first – mailing lists

and social media.
• Generate your own projects within your own communities.
• Keep in touch with opinion makers – curators and gallerists – let them know about your forthcoming projects, exhibitions etc.
• Have target galleries and curators in mind – look at which galleries you feel would suit your practice best; they tend to look to fill gaps in types of work they do not have!
• Ask curatorial friends to write critically about your work.
• Have a website – good visuals, clear statement on practice and critical writing.
This document is from a talk given by Paul Hobson, Director of Contemporary Art
Society at SVA, Stroud in May 201 2 as part of Visual Art South West’s ‘Art &
Money’ series.