Young people are breaking records in the art market this year. More numerous than ever to collect works or invest in art, they are committed to democratizing the market with new technologies. Overview of a universe in turmoil, where artistic creation is getting closer to funding.
Collectors aged 38 and under now represent nearly 60% of the global buyer base who spends more than $10,000 annually on artworks. According to the latest annual report by UBS and the Art Basel fair, this is a record that is considered benchmarks in this area.
Although the most expensive works are always bought by older collectors, young people are more likely to buy art for its value as an investment than for its aesthetic qualities, again according to the same report.
“This phenomenon has been around for a long time, but digital technologies have sharpened the vision of artistic creation as an investment,” confirms Christine Bernier, associate professor at the Department of Art History at the Université de Montréal.
She explains that new digital platforms and NFTs (non-fungible tokensor non-fungible tokens, digital certificates of authenticity associated with virtual works) are primarily attracting wealthier young investors who have not previously been interested in the art market.
The revolution of the masterpieces
The American platform Masterworks, founded in 2017, has made an impressive breakthrough with young collectors. It is the first service in the world that allows users to buy shares in works (for as little as $20) with the aim of increasing their value in the market; it’s a bit like what Wealthsimple allows with stocks on the stock exchange, for example.
Internet users buy shares in works owned by the company, which it intends to resell for a profit after 3 to 10 years of ownership. It is also possible to buy shares there in works owned by other investors and released on their “secondary market”. The platform takes 20% of profits made by users on each sale of works and deducts a 1.5% annual management fee on all of their profits.
Masterworks now has 500,000 users — most of whom are millennials — and 30,000 investors marketing works. Though Secondary Markets is only open to Americans for now, the company says it wants to expand the feature to other countries, including Canada.
All works marketed on the platform shall ” blue-chip art », i.e. pieces by great masters that will experience a meteoric rise on the market. There are many star artists like Banksy, Jean-Michel Basquiat, Yayoi Kusama and Andy Warhol.
“We try to educate our users about art and the market, but mostly we show them the merits of art as an investment,” says Masha Golovina, Head of Acquisitions at Masterworks.
This executive, who has been with the company since its inception, says collectors need to know less and less about art in order to buy it. It is pleased that its users “come mainly for high returns”, protected from inflation and the vagaries of the stock markets.
The growing popularity of NFTs and online galleries
According to the Artprice platform, NFTs have established themselves with a record revenue of $2.7 billion for FY2020-2021 (+117%). The latest report shows that the trend continues for the first quarter of 2022.
Art economist Christine Bernier claims that NFTs are currently mostly accessible to artists and investors who are privy to the world of cryptocurrencies, although they are attracting more and more young beginners.
In Montreal, the chic Ox Society gallery, which opened in Griffintown’s New City Gas Complex last summer, is on a mission to democratize access to NFTs. You can walk around for free and find digital works presented on screens for sale for several thousand dollars.
“We’re somewhere between a museum experience and a gallery,” explains co-founder Yannick Folla. The young entrepreneur not only wants to sell works, but also wants to inform his audience about NFT through cultural mediation activities.
Yannick Folla explains that most of the NFT buyers in his gallery are young investors “who come from the crypto world”. But he believes this market should expand its customer base year by year.
Just north of downtown Montreal is the first physical showroom of Montreal’s Gallea virtual gallery. Located in the former Maison-Alcan complex owned by Guy Laliberté and now home to a young shoots incubator, Gallea offers almost 10,000 physical and digital works on the web. Founded in 2018, the Montreal company has grown to become the largest virtual gallery in Canada.
“We market emerging artists who are becoming more professional and whose work may increase in value,” said Guillaume Parent, founder and director of Gallea. The works sold there remain affordable for the time being and mainly cover personal needs, but the entrepreneur is convinced that young people like him will want to invest more in art over the years. He describes the Masterworks platform as “inspirational”.
Christine Bernier therefore recognizes that new technologies are attracting more and more young investors who see art primarily as a financial opportunity. However, she remains decidedly optimistic.
In her opinion, investment firms like Masterworks and NFT sales will “take their rightful place” in a context where “non-commercial art” still dominates in institutions. “Never before have there been so many different practices and so much non-commercial art. There is something for everyone, it is wonderful. »
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