The Impact of Technology on the Art Market

Impact of Technology on Art Market

Apple as Benchmark for the Impact of Technology on the Art Market

In October 2014, a 38-year-old, but still working Apple-1 computer sold for a world record $905,000 (including fees and charges) as part of Bonhams inaugural history of science sale held in New York. The price, bid by an anonymous bidder, still stands as a record, even against the figure of $815,000 achieved in August 26, 2016, (the 40th Anniversary year of Apple Computers), for the rarest Apple-1 in existence, an Apple-I prototype made and hand-built by Steve Jobs himself.  The price reflects the rarity of the item: only 50 or so computers survive and of these only a handful are believed to work.  It also reflects the strength of the Apple brand in the modern world. Another reference point would be the launch of Apple’s new I Phone X with a price tag of $999. Yet while $671,000 is a staggering price for a computer, or even a piece of technology, it is relatively modest for a modern art auction. The world record for a painting sold at auction is Pablo Picasso’s ‘Les Femmes d’Algier (version o), which was sold by Christie’s New York for $179,365,000 (including commissions) in 2015.

Technology’s Role in Art Auctions

Though the impact of technology on the art market is small, its significance cannot be overstated. Technology has become so ingrained in our lives, that we often don’t notice it’s there. In the past, one would have to travel to the auction or send an agent to view the works in person, even to get a rough idea of if the works were even remotely suitable. And though there is no real substitute for viewing art in the flesh, high resolution images, displayed on auction house websites that you can enlarge and zoom into, give the viewer a fairly good idea of how the work will look.

The internet also enables clients from all over the world to bid in the auction in real time. Traditionally, the telephone was the best way to bid by proxy in the room. It was anonymous and you could bid from anywhere with mobile phone reception and change your mind if you chose. There is always the fear that leaving a commission bid could lead to the lot being “run up”‘. This is when the auctioneer takes imaginary bids in the room until he reaches yours. This practice is of course illegal, and is not practiced by reputable auctioneers!

The disadvantage of the telephone bid, is that auction houses only offer telephone bids to their biggest clients or on high value lots. The reason for this, is that an employee from the department must call the bidder several lots before their lot, and stay on the line to ensure they don’t miss it. This restricts the volume they can offer. The volume of Internet traffic an auction house can accept is virtually unlimited. And while auction houses seek to limit phone bidding, they actively encourage clients bidding online for even the smallest value lots as this will often be where they are sold. Even rural auctioneers have embraced online bidding as this greatly widens their potential client base.

Online Companies Leading the Pack

The two companies who have perhaps embraced online technology to the greatest extent are Paddle8 and the saleroom. These companies offer a variation on the auction process that is almost completely online. The saleroom is an online platform, set up by a subsidiary of the Antiques Trade Gazette (a publication for the antiques trade since the 1970’s) that allows buyers to bid live in the sale room via the Internet in a variety of auction rooms across Europe. It also hosts timed auctions, which work in the same way as eBay, where the highest bid at the end of a specified period, secures the item.

Paddle8, does not offer the interaction with other auctions and only holds timed auctions. This allows them to operate almost entirely in the virtual world. Vendors can submit a photograph of their item, have it delivered by courier to Paddle8 and then communicate entirely via email. You never need to speak with them in person at all (though security checks would need to be conducted in person, to ensure you are not actually a computer!) Buyers can see the lots being offered for auction and bid completely anonymously online.

When Physical Inspection is Needed

Rather crucially, the points when a judgement of quality is being made, when the auction house specialist is agreeing on an estimate for the work prior to sale and before a bidder bids on the work, do necessitate a physical examination of the work in person. The specialists can see the works when Paddle8 takes possession of them before the sale, so they can iron out any issues of condition not visible in the photographs. They also hold a traditional preview of the auction, where potential buyers view the lots.

The Future for Art and Technology

Paddle8 and the saleroom have both seen the positive impact of technology on the art market. The auctions, however are essentially in the same format as the first auction held by the Stockholm Auction House in 1674. The lots are valued, then offered with an estimate agreed between the auctioneer and the vendor. The lots are then displayed for the clients to view and sold to the highest bidder. While the process may be tweaked, I cannot see it fundamentally changing, for as the old saying goes, do not try and reinvent the wheel, and the auction wheel is turning as fast as ever.


About the Author

Huw is an experienced art storage and shipping professional with an art history background.

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