Since the dawn of the web, companies have tried - and mostly failed - to sell fine art online. In 1999, for example, eBay bought Butterfield & Butterfield, one of the largest traditional auction houses, for $260 million, promising to use technology to bring fine art to the masses. Three years later, finding internet users reluctant to buy expensive art online, eBay gave up and sold the house to Bonhams.
Fast-forward, and you discover that online buyers are far more willing to spend thousands - and, in a few cases, hundreds of thousands - to purchase fine art and furnishings on the internet. Now dozens of companies, from small fry like Artsy and 1stdibs to retail giants like Amazon and yes, eBay, hope to use the latest digital technology to improve a business that for centuries has relied on personal salesmanship.
So far, online sales remain small, making up only six percent of the euro 51 billion (about $58 billion, at current exchange rates) of art and antiques sold globally in 2014, according to an annual study conducted for the European Fine Art Foundation, known as Tefaf. Clare McAndrew, the founder of Art Economics, who researched and wrote the foundation report, said the most valuable art was still sold the old-fashioned way, with dealers and auction houses wining and dining the wealthy. "Those people are not very interested in buying online," she said.
But at the low end, people are now comfortable buying works for a few hundred dollars from sites like Amazon and Art.com, and the vast middle of the market is also starting to trust online vendors. "The average person is becoming a little more confident," McAndrew said. "The whole market itself is getting better and dealing with things like returns and transactions."
Artsy, one of the start-ups competing in this world, emphasises education as the first step in making buyers more comfortable. Its site displays works from more than 500 museums, including the Louvre in Paris and the National Gallery in London, providing detailed information on each piece. Artsy also uses its own art classification system, called the Art Genome Project, to help people understand the connections between artists. The idea, said Sebastian Cwilich, Artsy's chief operating officer, is to "create a larger class of people who will appreciate art broadly and a subset that wants to make it a part of their daily lives by acquiring art".
Slightly more than half of the 300,000 pieces on Artsy's site are for sale, drawn from 4,000 galleries and hundreds of art fairs. Prospective buyers can peruse high-resolution images and contact the seller for more information and to negotiate a final price. Artsy makes money from listing fees charged to the galleries.
Cwilich said that buyers generally seemed to be comfortable paying up to $5,000 online. But pieces sold in online auctions, vetted by a reputable auction house and made more alluring by the competition, can bring in much more. "People are bidding vigorously up to $50,000," he said. Artsy has been hosting smaller auctions for months, and in October, it partnered with Sotheby's to conduct an online-only auction of contemporary artwork with digital themes.
Sotheby's, with more than two centuries in the auction business, has ventured more deeply into online auctions since 2010, when it began allowing online bids at many of its regular auctions through partnerships with Invaluable and eBay. In March, a platinum and diamond ring sold online for $3.25 million.
Like other parts of the technology world, the online art market has attracted a variety of deep-pocketed investors, despite an uncertain outlook for profits.
Artsy, for example, has raised about $51 million from big-name backers such as Jack Dorsey, chief executive of Twitter and Square; Sky Dayton, a founder of Earthlink and Boingo Wireless; Larry Gagosian, owner of Gagosian Gallery; and Dasha Zhukova, founder of the Garage Museum of Contemporary Art in Moscow. And 1stdibs has raised $117 million from some top tech industry venture funds, including Index Ventures and Insight Venture Partners.
With more than 40 small companies competing for buyers' attention, and traditional auction houses and online retailers growing interest, a shakeout is inevitable, industry participants say. "A lot of the companies are simply intermediaries, or intermediaries to intermediaries," Dr. McAndrew said. "There are limits to the amounts of that needed in the market."
©2015 TheNewYorkTimesNewsService
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