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Analysis out of the box

The Artsy Consortium

Analysis out of the boxArt Market | Created in 2010, the New York start-up Artsy continues to impose itself on the great online art market in the making. Originally thought of as an image reference resource, this place in the market grew within three years to include design, while forging multiple partnerships with fairs and museums. The current goal is expansion in education and research. More than just an essential player, Artsy is in a position to dominate a veritable « influence machine ».

Logo Artsy © DR
Logo Artsy
© DR

Artsy in figures

In only five years, the Artsy marketplace has attracted over 2,500 galleries, including Gagosian, Perrotin and Pace, and about 400 institutions, including international museums like the Guggenheim, the Serpentine Gallery and more recently French museums like the Fondation Cartier and the Palais de Tokyo. Between 2013 and 2014, 20 partnerships were concluded with international fairs like the Armory Show and Art Stage Singapore, bringing the number of collaborations with international fairs to 37, including Art Basel and Frieze.

Artsy brings together a community of users from 82 countries, granting access to some 240,000 artworks, of which 60% are for sale for prices ranging from 100 to 1 million dollars. In line with a desire to render art accessible in any country with an Internet connection, Artsy also offers a mobile app downloaded over 300,000 times a day.

If Artsy’s 2013 and 2014 figures show exceptional growth, what they demonstrate even more clearly is a winning strategy, with the web site having undergone beta testing over almost three years. However, it is impossible to evaluate online traffic. Quantcast estimates 17,000 unique visitors per month on Artsy, while Michelle Finocchi, Artsy’s head of communication, evokes 500,000. While the company dœs not disclose their annual revenue, the prices associated with the galleries and fairs on the site would suggest a figure of, at a minimum, 1 million dollars per month.

Who directs Artsy

Names by Forbes as one of the prodigies of their 30 under 30 list in the art category, Carter Cleveland - Princeton-graduate information engineer - has surrounded himself with experts in numerous fields. As such, the general director of Artsy is none other than Sebastian Cwilich, ex-former head of Christie-s. Artsy employs a team of 90, including art historians, designers, curators, mathematicians, writers and artists.

Artsy also benefits from the support of influential players in the art market ecosystem, such as Larry Gagosian and Dasha Zhukova, both investors and « counselors » to the creative director. It should also be noted that Dasha Zhukova, founder of the Garage Museum of Contemporary Art and Garage Magazine, played an essential role in the partnership between Artsy and the Design Miami fair.

In the post of head curator and director of strategic and institutional partnerships, Christine Kuan, formerly head of external affaires at ARTSTOR, joined the start-up in July 2012. Communications are handled by Michelle Finocchi, a public relations consultant with clients including gallerist David Zwirner, artist Richard Phillips and designers like Cynthia Rowley.

Art Genome Project, Artsy’s engine

The Art Genome Project is to art what Pandora’s Music Genome is to music : a powerful algorithm meant to collect and interpret meta-data - this « data on data » particularly precious in the Big Data era. The Art Genome Project occupies a fundamental place in Artsy’s operations. It is a classification system and a network connecting artists, works and design objects across art history through a search for similar « genes ». This search for common characteristics conducted by art historians allows Artsy to analyze the navigation behaviors of users to discern their tastes and suggest works they could like. Currently, the Art Genome Project comprises over 1,200 genes that cover general criteria such as color, theme, medium, and pictorial movement as much as subjective considerations such as « Eye Contact » that unites works where the eye of the subject maintains direct contact with that of the spectator.

Hence, Ai Weiwei’s 2007 work Coca-Cola Vase is associated with the labels « provocative » , « found object » , « collective history » , and « Coca Cola ». Each characteristic leading to works that share common points. Zhang Xiaogang’s The Position of Father for « provocative » and Robert Rauschenberg’s Dylaby (Combine Painting) for « Coca Cola ». Similarly, for a user interested in Jeff Koons’ Michael Jackson and Bubbles, the site would suggest Terry Richardson’s Rolling Stones (representation of an icon) and Still Life : Leonardo DiCaprio by David LaChapelle (representative of popular culture).

The economic model

Artsy has raised 50.9 million dollars in financing in 5 years. Among the 18 investors are several venture capital companies like Catterton Partners, Thrive Capital, important players in the technological and digital worlds like Eric Schmidt (Google executive president), Jack Dorsey (creator of Twitter) and Peter Thiel (Paypal cofounder), public personalities like Wendy Deng Murdoch and art world players like Larry Gagosian and Dasha Zhukova.

Artsty’s business plan is based on a subscription fee (formerly free) running from $375 to $1,400 for galleries and art fairs (except Art Basel) to enjoy a promotional space on the site - with the price established in relationship to the degree of visibility desired. This replaces the initial model based on commissioning 1 to 6% of sales concluded on Artsy. The company had no real means of verifying the transparency of galleries. Arty also makes a profit from commissions charged on the charity auction sales they organize, sales that represented $10.8 million in 2014.
By comparison, the online sales platform SaatchiArt is supported by a model of charging artists a commission of 30% on each work sold.

Artsy and education

A major point in Artsy’s development plan is education. The company has concluded a partnership with the education department of the city of New York - where it is headquartered - through the Digital Ready initiative. Christine Kuan, a former employ at Artstor who contributed to the development of the Digital Library, heads this activity.

For its educational resources, Artsy is no longer simply a broadcaster of content but also a producer. Content is in the form of learning guides and resources for students, in addition to access to free downloads of 26,000 high definition images and 5,000 artist biographies. Artsy’s actions clearly favor the development of a new generation of curators. This was the case with a partnership with the Robert Rauschenberg Foundation whose Young Curator Prize attracted 138 students from 13 countries. An educational project where the winner had the opportunity to organize an exhibition at his or her school with works on loan from the Rauschenberg Foundation.

Artsy offers new and experienced collectors editorial and educational content through the section « Artsy Collecting ». Articles address subjects ranging from how and why to collect video art to a focus on the Asian or Canadian markets.

Artsy, player in an emerging market

Endowed with two-figure growth, according to HISCOX who predicts 19% growth through 2018, the online art market is more and more attractive with each passing year. The new generation of collectors changes behavior; they are less reticent about purchasing work based on a JPEG; and the advantages of the internet as intermediary are well recognized. However, the online part of the market remains small - 1.57 billion dollars in 2013 - compared with the 66 billion dollars reaped by the global art market. Contrary to the cinema, literature and music industries, the internet hasn’t yet caused major upheaval in the art world.

In terms of advertising and financing, Artsy seems better placed to become the market reference for online art, having mastered the major axes, than competitors Artspace and Paddle8 who have respectively raised $14.5 million and $17 million - large sums that have yet to be justified.

Vincent Kozsilovics
Publié le 15/02/2015
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Logo Artsy © DR

Logo Artsy
© DR