Christie's and the art of change

CHRISTIE’S SALEROOM. JULY 8. There’s a crowd at the auction house, one of the world’s oldest, on King’s Street, London. People bid for an Old Master (defined as an artist before 1800 A.D.), and some British paintings. It could be a scene at any time, in any era, from the house’s 238-year history. Except, for an army of sales advisors ferreting out details on rows of laptops next to the animated auctioneer. They are fielding bids online.

It’s a small sign of big changes at Christie’s. The art market, after a slump during the global slowdown, is back. Christie’s had record sales of $4.5 billion (Rs 27,225 crore) in the first half of 2014, up 12% from the same period previous year; 51 works fetched more than $10 million each.

It’s those laptops. Christie’s highest growth came from online sales at 71%, of which 27% were first-time buyers. Conventional auction grew by 13%, and private sales (in which a Christie’s expert mediates between a buyer and a seller) 7%.

Nearly a quarter of Christie’s buyers in the first half of 2014 were first-timers. While it is impossible to determine how many of them were first-time aficionados of fine art, Christie’s anticipates it’s not a small number. “The downturn moved the highest bracket of buyers, especially the new ones, who set benchmark prices with their purchases, from depending on galleries to more forcefully into the auction space. This is where the expertise of Christie’s gave them the required confidence,” says Ranjit Hoskote, an art critic and independent curator.

Stephen Murphy, the auction house’s CEO, says earlier Western fine art (the category still brings in the highest revenues) was confined to a few places, largely in the region. That is changing. An unprecedented interest in global art is attracting new customers. A cool 400,000 people attended the first-ever exhibition of Impressionist master Claude Monet held in Shanghai this year. The Google Art Project, which has a suitably Google-like ambition of putting all of humanity’s art online for free viewing, has 32,000 images of artworks from 46 museums, partnering a total 151 museums across 40 countries.

The list is growing. The Metropolitan Museum of Art has become the No. 1 tourist spot in New York, and Tate in Britain attracts a record half-a-million visitors a year. Read this in light of a record 100 million tourists from China in 2013, and it’s easy to see why 28% of Christie’s six-month revenues came from Asia. Christie’s first-ever Shanghai auction in September 2013 raked in an above-expected $25 million. “Earlier people would travel to art, now art travels to people,” says Murphy.

In 2013, 22% of Christie’s $7.5 billion sales came from new buyers, a category that grew 30% year on year. While North America ($2.8 billion), and Europe ($2.1 billion) are its biggest markets, Asia grew the fastest, by 44%.

“Here’s a whole new crowd of people who had never dealt with an auction house like Christie’s, but who can buy what we sell, and have the platform to do so,” says Paul Hewitt, managing director of growth markets for Christie’s. Christie’s thinks many of these customers will one day splurge on stuff like 58 pieces of artwork, each more than $10 million, it sold in 2013. “Today’s $100,000 customer could easily be tomorrow’s $10 million spender.”

Hewitt divides Christie’s universe into old markets—the U.S. and Europe—and growth markets. Each growth market, he says, has a clear ‘play’ on how the resources or money to buy art is coming from. Russia, the CIS nations, and West Asia “are largely hydrocarbons play”, he says. They make money from oil and gas, or natural resources, and their buyers have a more “asset-oriented” temperament. They, therefore, value the Old Masters and Impressionists (artists from the 19th-century art movement, such as Monet, Renoir, Cézanne, and Degas). They hardly support contemporary local art. In West Asia, Qatar gives enormous support to contemporary Arabic and West Asian artists.

That brings houses like Christie’s to a challenging time, at the core of which is the value of art that used to be judged by its rarity. In the age of ubiquitous art, how does one ensure the value of its original? An answer lies in the essay, The Work of Art in the Age of Mechanical Reproduction (1936), by German literary critic and essayist Walter Benjamin. He argued, “Even the most perfect reproduction of a work of art is lacking in one element: Its presence in time and space, its unique existence at the place where it happens to be.” Benjamin wrote about “the presence of the original”, suggesting that the fact that no reproduction diminishes the value of the original—on the contrary, raises it—“is the prerequisite to the concept of authenticity”. But he spoke at a time when reproduction was not infinite like in the Internet age.

Murphy says that in the age of excess access, companies like Christie’s have a more nuanced role of defining for the customer why something is valuable. Think of it this way: On the one hand, as millions of people see a Monet or a Matisse for the first time, on the screen—tablet or mobile, via social media—the more priceless the original becomes. The reason: Everyone knows its provenance and history. For the buyer of the original, therefore, the value, satisfaction, and social prestige he gets out of it, becomes near-infinite. On the other hand, for the lesser known, less viewed and shared artworks, it needs knowledge, tact, and skill to explain to buyers, especially new ones, why it is precious and costs what it does. This did not matter as long as the art world was confined to a small social set—many of them had historical familial experience, even training in buying and accessing art. Not anymore.

NEW-AGE CUSTOMERS are seeking out Christie’s not just to get the right value for their trophies, but also to figure out if they should buy it in the first place. This is one reason why the number of Christie’s buyers outside of auction has risen to 45%. (At auctions, one needs a certain base level of knowledge, since the decision-making or bidding time is short.)

Earlier, Christie’s would have a small group of collectors who would become buyers or sellers. It was a fairly uniform universe. “Now, we have a detailed customer-mapping system where online customers become tomorrow’s private sale participants, and then bidders,” says Murphy. And, as relationships and collections build, customers become consignment sellers. “We are across the entire value chain.”

In May, at a Christie’s online-only sale, a buyer paid nearly $1 million for a 2009 American minimalist work by Richard Serra. That figure becomes significant when you realise that it is nearly $200,000 more than the artist’s auction record. This reinforces the significance of online as part of this value chain. “Everything is in beta [meaning, Christie’s is still trying to understand and respond to buyers’ online behaviour],” says Murphy.

For now, there are two kinds of online sales. One is an online-only sale, where the customer has access to information on the Internet, and buys on the basis of that. Second—Christie’s has in some ways presciently waited for this moment since its launch in 2006—is Christie’s LIVE, a proprietary online platform where customers can participate in live auctions. It has created a global market for art. Earlier, in most auctions, there would be certain nationalities, largely Western buyers for Western art. Then as Japan and China began rising, Asians started buying Western art. Today it is a network of buyers and sellers from anywhere buying and selling anything. The top lot of Picasso sold at the Shanghai auction in September was bought by a European sitting in Europe, Murphy points out.

New markets are opening up in Africa, Brazil is gaining clout, and in each geography, Hewitt says the customer is seeking deeper knowledge and more acute “granularity” on art. “We see ourselves as evangelists of quality. Our customers are seeking just one thing—trust, more than knowledge,” says Hewitt. He adds that the Internet has created “pools of super expertise”. “If 25 very wealthy art collectors are passionate about Chinese ceramics, well, earlier they only knew about one or two of each other. Now they can form little groups or clubs and exchange knowledge, which make the buying and selling more enriching.” This also means Christie’s has to be more careful, because “a mistake or slip can be swiftly discovered by the pool of intelligence which is researching the subject”.

In all this, India is largely a domestic play. Buyers here mostly pick up Indian art, not only because it’s cheaper, but mainly to support great Indian artists. Christie’s, which had a representative office here to help buyers for two decades, held its first Indian auction in Mumbai in 2013. It made double ($15 million) the pre-auction estimate. Another auction is planned for later this year.

“Christie’s is reinventing itself to become a truly global company, which has platforms available for any kind of customer—from a few thousand dollars to millions,” says Lekha Poddar, one of India’s best-known collectors. The Mumbai sales were the tipping point for India.

THIS IS IMPORTANT, and leads to the raison d’être of a business like Christie’s. In the world of art, the economic downturn brought some of the toughest questions on pricing ever. In an unforgettable coincidence, the day after Damien Hirst, the irascible, omnipotent British contemporary artist, pulled off his biggest career coup—a single-man auction called Beautiful Inside My Head Forever, at Sotheby’s—Lehman Brothers collapsed. Hirst raised $200.7 million. By 2009, an auction of Hirst, often touted as the most powerful contemporary art brand in the world, could not sell one in three pieces. A critic, Julien Spalding, even wrote a book, Why You Ought To Sell Your Damien Hirst While You Can.

Many began to ask, is a shark head in formaldehyde (one of the pieces that shot Hirst to fame, The Physical Impossibility of Death in the Mind of Someone Living) really art? Is an unkempt bed, made famous by another famous British artist, Tracey Emin, art? Christie’s says it is not up to them to judge such things, they only provide details of technical provenance and authenticity. After all, when Marcel Duchamp showed an inverted urinal as art in 1917, many were shocked. They rejected his vision of representing everyday goods as art. “Christie’s job is to carefully curate every piece of art that comes to us, and not determine or judge the taste of our clients. We only ensure that they don’t get short-changed,” says Murphy.

This very thought, however, is disrupting the market. ArtRank, an online startup, has stunned the art world with a stockbroker-like ranking of artists. They give ‘buy’, ‘hold’, and ‘liquidate’ judgements on artworks. Founder Carlos Rivera says his service is created for those thousands of new buyers who would not get a good art investment advisor without spending thousands of dollars upfront (sometimes up to $50,000). His service costs $3,500 a quarter.

Amin Jaffer, international director of Asian art at Christie’s, is the sort of advisor who costs a lot of money and has billionaire investors like Kiran Nadar (she hates bidding) as personal friends. He smiles wryly when asked about ArtRank. “The idea of Christie’s is never to tap into a moment, but play a historical role.” To know, for instance, as he does, that most Indian collectors do not buy on seeing just photos of a piece. “They are more conservative than that.” Jaffer makes at least two trips to India each year, and meets many of his clients when they are in London during summer. “India is a complex place to handle logistics and complicated legalities, but the buyers are evolved and astute,” he says. And the speculators, people who want to buy today and sell a year later at huge profits, the type we had begun to see before 2008, are disappearing.

In the end, technology and gold rush only establish what Jaffer says, and Christie’s knows. “Human beings will always seek beauty, that search cannot end. We are there to guide on that journey. But yes, once they find beauty, it is now easier for them to share, which only helps our cause, does not deter it.”