Direct-to-consumer models have become increasingly visible across industries over the past two decades, with major companies and brands going direct to the end user, such as Netflix becoming a major producer of movie content. The art market had remained relatively impervious to these trends due to its highly publicized nature, high transaction costs, and general inscrutability. However, the pandemic and the power of social media have helped break down barriers and a transformation is underway.
In 2021, NFTs accelerated peer-to-peer commerce, allowing primary artists to sell directly to the public or to collectors through an exchange, as evidenced by the sudden rise of platforms such as OpenSea, Cryptovoxels, LiveArt, Masterpieces and more. “What we’re seeing is a big disruption – a blurring of clearly defined boundaries,” says Yuki Terase, co-founder of international art consultancy Art Intelligence Global. “Everyone wears many hats now, including artists, and that’s a good thing because artists have more agency.”
Everyone wears many hats now, including artists, and that’s a good thing, because artists have more leeway
Yuki Terase, Art Intelligence Global
Los Angeles-based digital artist Sarah Zucker agrees. She prefers the ability to communicate her story and make sales directly without “mediators who can slow down or confuse the process.” Again, it’s about agency and avoiding giving 50% of a sale to a gallery. “Direct-to-consumer sales can be beneficial for artists because they give us more agency and a greater share of the proceeds of our own work,” says Zucker. “The option to self-elect and sell directly to collectors is a huge opportunity for artists who otherwise wouldn’t have access to the more codified realms of the art world.”
Simon Denny, an artist who has been incorporating blockchain technology into his work for a few years, the most famous being in 2018, presenting the first CryptoKitty never sold – does not consider its releases as devoid of intermediaries. “When I released NFTs, it was with platforms of different types,” he says. But, adds Denny, “These platforms are not like galleries, in the sense that there is a long-term relationship of representation and management of reputation, market and careers. It’s more like working with a museum or a private institution, project by project. It has to be, he says, “because the NFT world is much more dynamic and the market itself moves much faster and in unpredictable ways.”
Industry insiders note that auction houses such as Christie’s and Sotheby’s have been quick to capitalize on the NFT boom by directly consigning artists who have moved past years of persistent daytime sales into major evening sales – even though, a year earlier, their work had never appeared at auction. .
While Denny is relatively established, his work has rarely appeared at auction. But last year he recorded Backdated NFT/Ethereum stamp (2016-2018-2021) directly on Sotheby’s Native Digital: an organized NFT sale, where it sold for $37,800. “For NFTs, auction houses are much more often primary sales sites, and their global customers and infrastructure make sense for a particular type of NFT-friendly artist to work with,” he says. .
What does this trend mean for traditional art galleries? Veteran dealer Dominique Lévy remains optimistic: “No artist can enjoy lasting and thorough recognition without the full partnership and commitment of a gallery,” she says. However, galleries still need to rework their business model and value proposition. German gallery owner Johann König says: “In the past, the function of galleries was only to distribute and sell works, but this is no longer essential because artists can have direct access to them. However, they still need places to show their work, they need context, advice and networking, so you need to change the way you work for artists as a merchant.
This discrepancy is also noted by Jehan Chu, art collector and founder of Kenetic, a Hong Kong-based blockchain trading and investment firm. He foresees that in the event of a crypto downturn and bear market, the NFT community would prove too superficial to support the scene. “If you look at the traditional art market, it’s very deep and well supported with auction houses, galleries, private collections, museums, publications and so many other areas,” he says. . “With a few exceptions like Crypto Punks, Bored Apes, and Art Blocks, most other collectible NFTs are thin speculative markets.”
Despite all its independence, certain artists and collectors in this new sector are waiting for the intervention of the mediators of the traditional art market. add curation, to add criticism, what galleries or institutions do,” Chu says. As prices climb, he predicts it will be harder for NFTs to exist in a vacuum as “collectors will look to curators and institutions to help them figure out why a Beeple work is worth 69.3 millions of dollars”.