Case Study: How To Value Prints & Editions With Art Tech
Pop Shop IV, Plate III © Keith Haring 1989
In the ever-evolving realm of the art market, we've witnessed significant paradigm shifts that are reshaping the traditional art trade. The art market, notorious for its opacity, particularly in quantifying the worth of artworks, is undergoing a profound transformation in 2024. This transformation becomes more pronounced as the art world experiences a substantial influx of new buyers and sellers during the ongoing wealth transfer. What becomes increasingly clear is that newcomers to the art market are seeking transparency and concrete data. Whether they are buyers or sellers, they crave precise and reliable valuations and assessments for their collections or potential acquisitions.
Here is where the shift towards online art acquisition comes into sharp focus. Despite a 15% drop in online art sales from the big three auction houses–Christie’s, Sotheby’s, Phillips–at the end of 2023, there was a 5% rise in the number of artworks sold through online sales. This trend indicates a growing confidence in online purchasing from auction houses, a confidence that we anticipate to extend to online dealer transactions. These transactions offer key benefits such as accessibility, convenience, and transparency, facilitated by MyArtBroker’s technology-driven marketplace tools. According to the Hiscox Online Art Trade Report 2023, transparency in pricing and valuation are elements attracting newcomers to the market. This demand aligns seamlessly with MyArtBroker's innovative technology – an advanced algorithm, SingularityX, powering our unique value indicator, setting it apart from other market tools.
This article serves as a case study with a dual emphasis: highlighting the crucial role of valuations in the art market and shedding light on the cutting-edge algorithm behind our exclusive value indicator. We have also engaged with industry experts who provide insights into how this technology has enhanced their pricing valuation strategy.
MyPortfolio © MyArtBroker 2024 MyArtBroker’s Value Indicator
Why Accurate Valuations Matter In the Art Market
The concept of value in the art market holds significant importance for investors, collectors, sellers, and artists, as it underscores the essence of worth. Ultimately, when it comes to determining value, it's the dealers in the industry who play a pivotal role. Whether through auction houses, online platforms such as MyArtBroker, or galleries, we all operate within the same overarching category–we are all traders in the art world.
Auction houses serve as the titans of trade. Yet, despite recognising their pivotal position in the art market, it’s slightly ironic that the well-known operations of auction houses–institutions celebrated for orchestrating the grand market spectacles–are shrouded in opacity, despite such widespread awareness of their practices. When one consigns to an auction, there exists a relatively limited degree of control for both the consignor and the buyer, leaving them essentially beholden to the auction house's determinations of value with a lack of knowledge in how that value was determined. In these specific situations, characterised by the conventional (arguably outdated) approach to art buying and selling, technological valuation tools exert a substantial impact on the art market.
MyArtBroker's innovative value indicator brings much-needed transparency by providing real-time valuations of artworks. This technology isn't just beneficial for buyers and sellers; it's also widely appreciated by fellow traders in the art market. Ed Plackett from Roseberys attests to this, stating, “I regularly use MyArtBroker market reports, as they provide informed and up-to-the-minute insights with artist’s values. It’s useful to look at the Trading Floor section to see the trends in artist’s values and I also check the MAB 100 index to see what’s in demand.”
Image © Sotheby's New York Modern Evening Auction November 2023 © MyArtBroker 2024 Technology Driven Art Valuations In The 2024 Print Market
In the digital age, MyArtBroker has undertaken extensive research and development to establish a dedicated marketplace for prints and editions. Our technology meticulously tracks and archives auction histories for blue chip print works, much like the paid subscription databases of ArtNet and ArtPrice. What truly differentiates us is our exclusive focus on art market data for print sales of blue chip artists with comparable markets. Moreover, we've made significant strides by introducing an algorithm that meticulously analyses auction histories within our market database, generating valuations encompassing both low and high estimates for individual works based on their past auction sales and private sales. Essentially, we've harnessed the potential of auction history, offering it freely within our network, and showcased how we leverage art market data, to derive precise real-time valuations. This technological approach stands as the sole means to portray the factual and current market value of an individual print work, rooted in data.
Simplifying The Art Market
MyArtBroker remains unwavering in its dedication to reshaping the art market in an Art Tech driven era, placing a strong emphasis on accessibility and transparency. As we enter 2024, we anticipate significant advancements in art technology, streamlining operations within the art market. We see valuation models powered by technology not as replacing traditional auction methods but rather becoming seamlessly integrated into the art sales process.
In a recent discussion with fellow Art Dealer Oliver Munts, we delved into the utilisation of our digital art valuation tools. Our conversation highlighted the critical importance of integrating private sales data into valuation assessments. Oliver underscored the indispensable role of technological solutions in helping clients grasp the true market value of specific artworks, particularly in navigating the complexities of the art market.
One of the main hurdles dealers face is the reliance on publicly available auction data alone to gauge market value. While these figures offer insights, they may not always accurately reflect current market dynamics, posing a challenge that is difficult to rationalise with clients. Factors like buyer's premium fees and temporary market shifts can distort perceptions, particularly for unsold artworks amidst market saturation, notably affecting high-demand blue chip artists with active private markets. In a recent live panel discussion hosted by MyArtBroker, Charlotte Stewart highlighted that public auction results represent only about 30% of market activity. The Banksy print market surge in 2021 is a case study that exemplifies this point, explored further in our recent Banksy investment guide. Amidst oversaturation in public auctions, when there is an overwhelm of supply, our technology offers a solution. MyArtBroker’s innovative AI-powered Value Indicator revolutionises print valuation, leveraging historical auction data, auction hammer prices, buyer’s premiums, and private sales insights for the most accurate and comprehensive assessments available in the print market.
Listen to MyArtBroker's live panel discussion with experts in the industry and explore our recent and comprehensive Banksy Investment Guide.
Understanding Auctions and Private Sales
Our platform provides users with a simple way to identify artworks that have fetched the highest auction prices. We prominently display this information for each artwork, showing listed auction sales–hammer price and buyer's premium– alongside a dotted value trendline, offering users an accurate visual representation of the artwork's value.
In conversation with Oliver, we both agreed that sometimes, there are high-value works by blue chip artists that have recently appeared at auctions selling for low price points, directly affecting real-time, tech backed estimates for what experts know to be high-value and investment-worthy pieces. However, as Oliver points out, this is precisely what many individuals, particularly newcomers to the art market, seek: a reliable metric rather than inflated auction prices with added fees.
Acknowledging the influence of buyer's premium prices released by auction houses and uncharacteristic sales, might shape valuation perceptions for both buyers and sellers, we made the strategic choice to incorporate private sales into our technology. This decision was motivated by the necessity to adeptly navigate market saturation and optimise value determination.
Using Andy Warhol as an example, whose print market experienced considerable success throughout 2023. Phillips, most recent, January 2024 Prints and Editions sale, offered high-value and recently trending Warhol prints including Mick Jagger (F. & S. II.145) and Queen Elizabeth II (F. & S. II.336) (AP). While these pieces performed well, they fell short of setting new auction records. One explanation for this could be attributed to temporary market saturation of these particular works. While lower auction results might initially affect a technology-powered art value indicator, which interprets historical auction data and private sales, it ultimately ensures a more accurate assessment of an artwork's value by considering the broader market dynamics of supply and demand in different markets.
While market dynamics may lead to fluctuations in the selling prices of artworks, our price valuation system skilfully consolidates pricing data. As Oliver emphasised, it provides a user-friendly alternative, sparing clients the need to navigate the complexities of Sotheby's website. MyArtBroker wholeheartedly concurs, recognising that data is truly valuable when one knows how to effectively interpret and utilise it.
Listen to MyArtBroker Talks Podcast Building The Next Generation Of Digital Infrastructure For The Art World.
Tailoring Recommendations to Client Needs
To gain insights into diverse client needs, we engaged in discussions with fellow Art Dealer Adam Baldwin and Ultimart, who provide art insurance services. Adam praised MyArtBroker's print valuation indicator as a remarkable tool for gallerists, enabling them to assess print value beyond historical auction data limitations. Meanwhile, Ultimart highlighted the importance of art insurance valuations, emphasising the necessity to safeguard investments amidst frequent market fluctuations. They emphasised the significance of periodic revaluations, typically every three years, and how our technology can side-step in between time to ensure accurate assessments.
When creating our valuation indicator, MyArtBroker’s approach involved catering to the unique requirements of our clients, whether they are buyers or sellers. Our objective was to evolve with the advancements of the digital era providing information that we knew would be valuable. For example, in contrast to the paid subscriptions offered by platforms like ArtNet and ArtPrice, we took the initiative to present this information to our clients at no cost, aggregating data from recent auctions and the private market to provide authentic market value to create a formidable and transparent marketplace for informed decision making.
Streamlining Art Market Insights For Newcomers
Navigating the art market, particularly for newcomers, can be a daunting task, and the opacity of numbers often adds to the complexity. MyArtBroker's value indicator was designed to address this challenge by offering precise valuations for individual artworks alongside their auction histories, all conveniently consolidated in one location.
During our discussion with Oliver, we both emphasised the significance of centralisation as an effective simplification strategy, a concept that aligns perfectly with our website's mission. With a laser focus on the print market, we provide a seamless experience by offering extensive auction histories, a valuation indicator, and value trends, all accessible in one user-friendly platform.
The 2023 Deloitte Art and Finance Report underscores the growing importance of Art Tech tools in connecting with the upcoming generation of affluent buyers, poised to reshape luxury investments. While seasoned experts and dealers possess the expertise to assess valuations based on their deep market knowledge, tools like MyArtBroker's value indicator are invaluable aids for clients, offering a more straightforward path to informed decision-making.
For emerging collectors and those seeking to comprehend the art market, MyArtBroker's valuation system stands out as an exceptional resource. This is particularly relevant in light of the rising presence of millennial buyers, who benefit from such a tool in navigating the intricacies of the art market.
Looking Ahead In 2024
Looking ahead to 2024, we foresee an imminent surge in emerging collectors joining the art market. This surge underscores the growing importance of leveraging MyArtBroker's technology to a greater degree. The enthusiasm in the art market was unmistakable in January, read our monthly market newsletter for more insights. The start to the year was fuelled by the London Art Fair, which shed light on the rapidly expanding and dynamic sector of blue chip prints and multiples.
We expect well-established artists to sustain their allure, particularly in light of the ongoing economic rebound from previous deficits. Investing in blue chip branded artists will remain a reliable option. Although the market has achieved stability, there is tangible value within the current landscape. The greatest advantage of our tool, as Munts emphasises in our conversation's conclusion, is its suitability for both seasoned collectors and newcomers to the market. We present the data, and you can enter with limited knowledge; before you know it, you’re understanding valuations.
