The art price mystery

May 10, 2011

by Robert Genn

Yesterday, Mark Sharp of Invermere, B.C. wrote, "I was in a gallery looking at a large painting by a living artist. With no dramatic message or spiritual awakenings, it was just a really nice painting--and it was priced at $24,000.00. It probably took the painter one or two days. On the same wall was another same-size painting by another living artist. It was equally well executed, of similar effort, but priced at $6,000.00. Both artists are the same age with similar educational backgrounds. Why the vast price difference? Is it an artist's mystique, proven sales record, better marketing, or what?"

Thanks, Mark. Art pricing has to do with control. Artists who seek professional status should not be seen selling their work irregularly or at lower prices. Dealers (and artists) who control supply are better able to control demand. Scarcity is important. That $6,000 artist may be three times as prolific as the other guy. Another consideration is location. If an artist offers work in barber shops or less prestigious galleries he cannot expect to get the same kind of prices as in high-end commercial venues. Further, artists whose work is exhibited in public museums or loaned out from significant private collections can be expected to demand more.

There's another factor that's a bit harder to quantify. The higher-priced painter may just happen to be the better painter. Artists whose work is of higher quality (or merely consistently marketable) are sought out by leading galleries. Further, dealers have a collective interest in seeing an artist's prices escalate, thus adding the sniff of investment to an otherwise mostly emotional purchasing decision. For the artist, a few years of 10-20 percent annual price increases leads to eventual high prices.

Serious artists have an obligation to themselves to secure a strong cash flow so money worries are left behind. Travel, study, challenge, exploration and even down-time can be expensive, but they are the life blood of creativity.

My democratic inbox is frequently loaded with questions on prices, marketing strategy, recession ploys, distribution and sales methodology. One might conclude that art is a branch of economics. While the burden of money will forever be with us, quality is still ahead of whatever is in second place. That's why artists need to go to their rooms. Quality needs to be made. But please don't ask me to define "quality." With the exception of markets based on unnatural spin and hype, quality (whatever it is) is often the harbinger of higher prices.
 
Best regards,

Robert

PS: "Nowadays nothing but money counts: a fortune brings honors, friendships; the poor man everywhere lies low." (Ovid 43 BC--AD 17)

Esoterica: Younger and early-career artists need to enter the market at prices low enough to tempt collectors, but high enough to make it worthwhile for potential dealers. Even dealerless artists need to keep this in mind when laying the groundwork for a career in art. Everyone loves a penny stock that goes up. "Price is what you pay. Value is what you get." (Warren Buffett)