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Interview with Anders Petterson Managing Director of ArttActic, Art Market Research Company Elisa Hernando, Director of Arte Global
Do you think the recession will change the rules of the art market? What will be the main diff erences with 1992? I don’t think the rules will change, but the art market landscape and the roles of the existing players will. Auction houses are likely to revert to their core business of buying & selling art – after years of dabbling in other activities from curated exhibitions to fi nancial services. The weakness of the auction houses will play into the hands of the major art dealers. The primary art market is likely to remain weak, and only the most resourceful and committed galleries will survive – these will be the galleries to watch in the next cycle. The main difference between the last boom and bust in the early 1990s is that we can actually talk about a global contemporary art market now. Art markets such as China, India and the Middle-East were not even on the map then. These markets could revive quicker than their US and European counterparts, depending on how their economies weather the current economic crisis. How can collectors fi nd opportunities nowadays? It was very difficult to find long-term opportunities in the boom over the last 5 years, particularly as new wealth and speculative buyers drove prices to unsustainable levels. Now that the art market is correcting, and prices are coming down, the market is shifting from a seller’s to a buyer’s market. This means there will be plenty of opportunities in every single collecting category. However, the market will remain hesitant and nervous for a while, until it feels the bottom has been reached, which according to ArtTactic’s last confi dence survey, could take between 3-5 years. As prices and values are coming down we will start to see an increasing number of long-term collectors entering the market, and this will eventually be the beginning of a new art market cycle. In his book “Collecting Contemporary” Adam Lindemann claimed that critics have less infl uence on the market nowadays? Do you agree? Who are the powerful players? Yes, in the last boom the critic’s role was marginalised, as everything was about the market and the monetary value of art. This will change. I believe the critics role will become more important as the art market re-focuses its attention on the art itself. The need for a non-market benchmark for assessing ‘quality’ is needed. From your point of view, what are the main diff erences between emerging and consolidated markets? Infrastructure: Many of the emerging markets lack art market infrastructure, such as education, museums, galleries, collectors, curators, writers – and are therefore more vulnerable to market forces and speculation, as there is a lack of context in which the quality of the artists and their work can be validated. Hence high prices in auction are often equated with high quality art – which is often not the case. Do you believe we can measure art as we do on stock or building market? What are the diffi culties we fi nd to do so properly? What are the diff erences between all these markets? The short answer, is yes you can. Mei & Moses, Art Market Research (AMR), Artprice all have indexes measuring the performance of the art market. None of them are perfect – but that is also true of other indexes in heterogeneous markets such as the housing market – it’s an approximation and indication of how the market performs. The question about art indexes and their validity becomes important depending on what purpose you are using them for. It is funny because both of us have previous working experience in banking, you in JP Morgan and I in The Bank of New York, I launch an art consulting company, Arte Global. Why did you decide to launch ArtTactic? I always had a strong interest in contemporary art and also a strong interest in markets (fi nancial and others). ArtTactic is a merger of those two interests, where I am trying to bring a diff erent type of research methodology to get a better understanding of how the art market works. What is the ArtTactic Art Market Confi - dence Indicator? What are the advantages for a collector using it? and what is the diff erence compared with the Artprice Confi dence Index? The indicator was launched in May 2005, and was the fi rst time anyone had tried to measure the sentiment in the art market. The indicator is modelled on a similar methodology to the CEO Confi dence Survey that was launched in 1976 by the Conference Board in the US. ArtTactic believes that the opinions of a small group of carefully selected ‘art insiders’ (the sample is currently around 150 individuals), being collectors, auction houses, advisors and other art professionals provide a valuable insight into the future direction of the art market. The survey is not only used to measure the short-term confidence in the market and individual artists, but we also launched the Survival Rating methodology in December 2008 to gauge the respondent’s perception of the artists’ long-term importance and longevity. ArtTactic Art Market Confi dence Indicators currently cover three markets: the US & European, Indian and Chinese modern and contemporary art market, with Confi dence Indicators being launched in a number of other regional markets during 2009. Artprice measures the market sentiment using an ‘open’ response / real-time methodology – anyone who subscribes to the database can vote. There is no artist focus and there is no regional focus. What do you think about the spanish art market? It is among the countries in Europe with the best funded and strongest public art infrastructure. But despite the strong institutional support, the art market has always been operating slightly on the periphery of the international art market. As the UK and US markets are struggling at the moment, maybe it’s an opportune time for Spain to step up and position itself for the market rebound. This year ARCO has invited India. I have seen you published a report in May 2008 on this market. What are its strong points? A lot has happened since the report was launched last year. Like most other art markets, the Indian art market is going through a corrective mode, with both confi dence and prices falling. However, the recent art market boom laid the foundation for the next cycle. With the lack of government support for contemporary Indian art, private initiatives such as the Devi Foundation (launched in September 2008) will help create a non-market oriented reference frame for the Indian art market. The gallery sector has also developed signifi cantly over the last 2-3 years, which will support the art scene going forward. India has a long cultural heritage, the potential of becoming one of the biggest economies in the world over the next decades and importantly a lot of artistic talents – ingredients that can make for a very powerful art market in the future.