Who is the market maker? Forces in Tandem
Market: The ‘taboo’ word – Who drives the wheels in the art market? Collectors, galleries, artists, dealers, power brokers, savvy investors, flippers, fakes or the fund managers!! Does the bullish market follow a local or global mantra? Can its wobbling be attributed to some definite factors? Does a primary player transverse at a certain stage and don the role of secondary market player to pocket profits and sustain oneself ? Is there a ‘business model’, which can be endorsed as ‘the order of the day’? Is there anything called like the synergy levels of the two different market performers? Can the secondary market successfully manage a living artist’s primary market? These uncertainties and risks and misconceptions inherent in art speculation remain one of the most intriguing subjects of debate amongst the art fraternity. Revelations spurting from the horse’s mouth testify that there is no one ‘order of the day’ that can be hailed as the formula of survival. Indeed discussion on the market is akin to opening a Pandora Box. A similar impulse has driven the experience of bringing around this issue with most of the writers and collectors shying away from committing their stance. However discussions with some of the main players operating in the Indian art market has put across a jagged yet optimistic and progressing state of functioning of the market.
Market analysts often focus on auction prices when it comes to a research on the art market but TAKE Market steers clear of fluctuating figures and instead looks at its evolution through interviews and photo essays of connoisseurs, collectors and consultants like V.Sanjay Kumar, Nitin Bhayana, Dinesh Vazirani, Nirmalaya Kumar, Ina Puri, Rajashree Pathy, Malvinder Singh, Shalini Passi, Radhika Chopra, Lekha Poddar, Manisha Gera amongst others with a focus on collections vis-a vis the art market. The Primary Art Af ’fair’ – The Art Tactic Indian Art Market Confidence Survey, May 2011 underlined that whilst the Indian auction market has been a bellwether for the overall Indian art market, it is becoming evident that the current market activity is happening elsewhere, such as in the gallery, dealer and private sales. The increasing popularity of art fairs, such as the India Art Summit (now the India Art Fair) and the recently launched venture India Art Collective – India’s first online fair is a sign that the Indian art market is maturing, and that the confidence in buying art outside the auction room is on the increase. Neha Kripal, the India Art Fair partner paints a larger picture stating that a large number of investors seem to have pulled out of the market, leaving a few collectors to be wooed by the growing number of galleries. And hence in the current climate, survival, and success in the primary market is rather challenging. However, having started the art fair in the recession in August 2008, the fair has also seen over the last 3 years a far greater level of exchange and ongoing exposure for galleries in the primary market. Will Ramsay, the new partner of the fair elaborates in his interview elsewhere in the issue, on the new strategies that will help bring in a broader international collector base to India during the forthcoming edition. Kripal says that this was the main premise on which India Art Fair was started, to be able to build a wider collecting base and bring in new buyers as also to provide a marketplace like environment that encourages the primary market to bind itself together into a more structured organized community that fuels better trade and encourages certain industry best practices to base itself on. Should this trend continue to gain strength, it might help primary galleries stay focused on their role in the art eco system and not be necessarily distracted by secondary trade activities.
Secondary Market – Being an insider and knowing that secondary market forms an essential part of our system I took the plunge in speaking to a few colleagues trying to give perspective to an issue focused on what constitutes the art market. Ironically, a collective voice has been that the entire market works in tandem the primary and the secondary. One influences the other. Gaurav Karan, Managing Partner, Crayon Capital Art Advisory and Projjal Dutta, Aicon Gallery feel that most galleries form a strong part of the secondary market and there is no reason why they shouldn’t be!! It is a business model that is not the order of today but of all days! And the same goes internationally. Most leading international galleries are significant secondary market players. For eg. Gagosian, who handle prominent artist’s estates and scout for emerging talent, simultaneously. Galleries that combine secondary and primary market activities are less dependent on quick returns from sales. In reality almost all successful galleries combine some measure of both. Arun Vadehra of Vadehra Art Gallery opines that the secondary market is important for an artist as it reinforces his or her prices. When the secondary market flourishes, it shows that the market for that artist is properly established. For example, nearly every top dealer in the West is in the secondary market for Picasso and this is considerably supporting the artist’s market.
Shireen Gandhy of Chemould Prescott perceives the interaction between primary and secondary market as a strategy the former opts to survive with the private sales having no bearing on their “gallery programme”. However, there are many who don’t necessarily agree with the above and Peter Nagy’s affirmation comes in face with the wider picture of the Indian art market and proposes a cautious mode of functioning for the galleries. “I have never been very involved with the secondary market and managed to open and sustain a gallery dealing in the primary market, though it wasn’t the easiest thing to do. But one does have to be realistic about the parameters of the local market and what collectors want to buy. Everything is a balancing act. But I do find it perplexing that some galleries feel unable to commit publicly to painting in their exhibition program but then acknowledge that they keep the doors open via the secondary market for paintings. Unfortunately, this implies that painting is no longer a relevant art form, though it does still command the market. I couldn’t disagree more: painting, especially in Asia today, is a vibrant and highly relevant medium that can’t be disregarded.” A slight on the hypocrisy of a new breed of cutting edge spaces that turn up their noses on the more classic arts/artists publically but don’t mind dealing on the side.
On the flip side however there is also a risk equation in the secondary market. There is less regulation in the so-called secondary market of auction houses. Aside from scandals about systematic price-fixing, reserve prices are set below which works will not sell, and bidding is manipulated by collectors and dealers [as the grapevine claims!]. Unlike primary performers, traders rarely opt to sell a work at a lower price to a museum or a good collector in the interests of developing an artist’s career. High prices are an end in themselves for the secondary market. The question that needs to be then answered is that, can the secondary market successfully manage a living artist’s primary market? One cannot deny the importance of a healthy primary market for the long-term sustainability of the country’s art market, and the career progression of its artists. The primary galleries are the bedrock of the art eco system; they discover, build and shape the artists’ careers, a role that cannot be equaled by the relatively transactional secondary market. So there is no supplanting the contribution of the primary market in this regard, however what is required now is
governmental and public institutional support to shoulder the responsibility of building a vibrant sustainable art scene. Nagy adds in a similar tone, “The secondary market has no concern for the well being of the artist and scant concern for the primary market. What do the auction houses or private dealers do to help shore up the primary market for artists? Nothing. I see no creative thinking going into the marketing and exhibition of Indian contemporary art from the auction houses, just a roll-over of goods in the easiest, most convenient packaging.”
Voicing a common concern, Gaurav Karan, Sunaina Anand, Art Alive and Payal Kapur, Arushi Arts feel that auction houses and dealers also cultivate new clients for the primary segment by introducing the collectors to artists whose primary channel is the gallery they are represented by. “Secondary Market also plays a role in maintaining and extending the client base and widening the availability of works. Also if a client approaches a gallery with a work to sell, and they have buyers, why shouldn’t they try and help their client find a buyer. And help buyers acquire an artist that they are looking for at attractive prices that doesn’t work with primary works” adds Karan. Lack of institutional support for the Indian contemporary art scene, lack of critical writing and curatorship, of support for new talents and primary and secondary dealers not willing to support their artists in auction have been marked as some of the reasons for the contemporary Indian art not reflecting a continual confidence. The war between the primary and secondary market is an ongoing debate and the art market as widely known has been the function of the larger economy.
Anders Petterson in his lead piece claims that the contagion effect experienced in 2009 did affect virtually every art market around the globe, with auction sales volume contracting anywhere from 60-80% between 2008 and 2009. However, the Chinese art market has moved into first place globally in terms of auction sales creating a new world order reflecting a new ferment of the marketplace and the global art production and consumption. This is also largely true as the general art-world view in face of the proliferation of biennales and art fairs and representations from Asia is no more linear and is replaced by multiple, diverse, rainbow-hued, complex practices and discourses.
Arshiya Lokhandwala aptly recognizes this as a trend taking over the galleries in the country to leverage trade and stretch the local market towards the global direction in her article. Interestingly, a lot of our perceptive writers are trying to read in between the lines of the operation of this market and hail passion as the force which will drive the market even in the bleak times. This issue stresses on the dynamics of such phenomena and the need of longevity of the market and its players. Not accentuating the number game, the issue in its totality conceives the marketplace as the beginning and end of the collector base which in their own words is a sort of a ‘Chronicle of Missed Heart-beats’.
Wishing all the readers a very Happy Diwali !