Another record season is over, and one can almost feel the global elites pouring yet another large glass of art market absinth for themselves, becoming absorbed by the pleasant illusion of financial heaven brought about by their art investments, ducking their long term economic worries in their decorated palaces, and even expanding private museums or spacious safety vaults (secure storage for high-value art is one of many high growth art industry segments, after all).
The statistics for the art trade in the first six months of 2012 do indeed portray a blossoming marketplace that enjoyed greater liquidity, better returns and more price records all while ignoring a cracking global economy, stagnation in China, a collapsing EU fringe and continuous soul searching for a new sense of direction in the U.S.
Yet despite the rosy numbers, the focus of our semiannual report is not the high-end segment of the art market. Yes, as usual, we cover it with lots of statistics, but in a way the story has become boring. For years, it has been much the same story, over and over again. The rich get richer, put more capital in art that is already fully priced, and enjoy the opportunity to perceive the value-preserving qualities of masterpieces along with the branding opportunities that come with owning prestigious artworks. This has greatly driven up both the returns and benefits for those art market institutions that have focused on the premium segment, notably the leading auction house duo of Christie’s and Sotheby’s, the Grand Slam of the art fairs (now consolidated throughout the year into three Basels, two Friezes and one TEFAF, with FIAC and Armory left to ponder whether it’s worth remaining in the race) and, finally, the high-end galleries.
Apart from private political and social foundations or charitable activities aimed at education and healthcare, intellectual spending on tangible assets like art and private museums provides one of the few opportunities for the wealthy to stoke their egos. Ego stoking has served and continues to serve as a powerful source of growth in the high-end art market. But unlike most charitable activities, one can actually make money in the process, or, at the very least, preserve most of the capital allocated to collecting.
Let us take just a quick look at the high-end art market results for the first half of 2012 before moving on to the core focus of our report—the crystallization of the art consumption industry and its most interesting opportunities for value creation…
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