Apart from established events like Art Basel in certain key cities and a range of New York shows like the Armory show, most art fairs are in locations with a soft gallery structure. These are more spectacles, than a reflection of an established art market. They draw in a group from a particular geographic region for a short-term event that offers art for sale for a few days; then they pack up and leave. It is difficult to judge the state of the art-buying scene based on these retail events. They are fleeting and therefore, not reliable indicators.”

Shifting gears again, I move the focus to Mr. Genocchio’s address to the audience on October 5th. “I believe you are planning to talk about the impact of new media on the traditional art publishing world? What can you tell me about how things have changed in recent years?”

“I am currently executive editor for three Web sites and two magazines. I have seen a sea change in the way information is disseminated in recent years. There are generational and attitudinal issues to consider. By that, I mean we in the publishing business have to consider how people want to get their news. Weekly periodicals are struggling, but daily is still a key word when we consider how people choose to consume information. The weekly magazine is all but dead.”

In advance of his keynote presentation at the Art of Leadership symposium on October 5, 2010, at Bonhams in New York City, I spoke with Ben Genocchio (left) about the search for value in the art market during challenging economic times.

“Who still has the money to spend on fine art and collectables today and are these buyers finding bargains in the current marketplace,” I asked?

“Money is pooled at the top,” said Mr. Genocchio, “and the luxury sector is doing very well. Of course, the art market is a very small component of the total luxury market, but it is still reflective of a general trend. You can see that Tiffanys recently reported good earnings, while for the same period, Wal-Mart did not. This is an indication that the people with money are still spending, but they have pulled back a bit and buying behavior is more conservative.” Fine Arts Magazine

October ‘Art of Leadership’ Speaker Offers Views on the State of the Art Market

Art + Auction Editorial Director, Benjamin Genocchio, sees art arena in flux

By Richard Friswell

“But, the big auction houses are reporting good earnings as well, with some record prices for certain pieces.”

“If you’re referring to Giacometti’s , L’homme qui marche, I, which sold recently for $104.3 million and Picasso’s, Portrait of Angel Fernandez de Soto (below), in June for $51.6 million, those were highly-publicized anomalies that, if you’ll recall, happened to coincide with spikes in global equity markets. People want to feel bullish after a long period of sell-offs in the markets. Those particular sales and others, to a lesser degree, respond to their own set of logical parameters. They may be purely anecdotal, when you consider the quality and rarity of those particular works—they would be considered a good asset class by anyone’s standard, but particularly if you have the money to spend.

“How are most other auction houses doing, if the bigger operations are struggling?”

“Other auction houses in the U.S., Europe and China are working hard to ‘make the sale’. The appetite for risk among collectors, particularly in the mid-priced market, has cooled. Those who can afford to have moved away from the contemporary category and into blue chips, like the Old Masters and early 20th century notables. In this way, the art market reflects broader market trends. I have noticed, for example, that Brazilians are buying now, Indians are buying, the Russian appetite for risk has diminished after they helped drive the market for a while. But, in spite of this, and speaking generally, the art market is reflecting broader market trends and discretionary spending is down. Sites like Art Info.com, that maintain daily records on global sales, are still showing very mixed results from most auctions.”

Alberto Giacometti ,''L'homme qui marche, I'' (1961)

“If I’m not mistaken,” changing focus to another aspect of the secondary art market,” there is an abundance of art fairs around the world and the numbers of regional events just seem to keep growing. How do they all stay alive?”

“I can remember when I worked in my native Australia, in the ‘70s, Time Magazine was the Internet of its day. A local publisher would buy 30% of Time’s content from the parent company, plug in 70% regional news and advertising and sell a recognized brand in the marketplace. Under that arrangement, you enjoyed a geographical monopoly. The Internet explodes all of that!”

“Later, in the ‘90s, I went to work for Rupert Murdoch. I watched as he invested newspaper’s golden goose, otherwise known as classified advertising revenues, into high-tech infrastructure: dedicated satellites, TV networks and the like. He saw the future…and it was not made of paper! The issue that many publications are now confronting is, ‘adapt or die’. With so much invested in traditional forms of information management and delivery, many print media publications would rather go out of business than change to a new delivery method. A lot of that resistance has to do with revenue generation and how to monetize a Web-based system of information management. That is the challenge we all face and those who can do it successfully will be the ones who survive in the future.”

Lastly, I directed a question to Mr. Genocchio that had originally topped my list: “What advice do you have for today’s collector who may be trying to decide to jump into or re-enter the art market, but believes that it feels a bit like challenging the spring rapids on the Colorado River in a rubber raft?”

“I address this very issue in the most recent issue of Art + Auction, because I am asked about this all the time. Essentially, the issues haven’t changed. First, be aware of every buying opportunity. Don’t just buy at auction or through the same dealer. Scout the galleries and become familiar with emerging artists in your area. Then, educate yourself regarding the art market and the work of those artists who appeal to you. Read everything you can get your hands on and don’t be afraid to ask questions.”

“Third, don’t buy anything you don’t want to wake up to in the morning and look at every day. It has been said, ‘buy what you love’, and that still holds true. Of all the reasons to acquire art, the most important and time-tested is the enjoyment of looking at it. Over time, a given piece may increase in price, but if you only buy for investment purposes, you’ll probably end up with an artwork you really don’t like—and one that’s worth even less than you paid.”

“Next, work with a trusted expert who can guide you through the morass of unproductive and over-priced directions that you may choose to pursue. Good advice may cost you in the short-run, but the value of that guidance helps to take the emotion out of purchasing art and results in a dispassionate, more informed series of decisions, as your collection grows. And last, consider the work itself: what I call the ‘registers of value’. This includes the record of sales for comparable works by the artist, condition, subject matter and provenance. You can buy what you like, but remember that what you like may turn into a financial asset. It pays to buy smart.”

by Richard Friswell, Executive Editor, Artes eMagazine

Pablo Picasso, "Portrait of Angel Fernandez de Soto" (1903)

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