Skates recently published its Art E-Commerce report. Click HERE to download the full report. These types of reports are important for appraisers to follow as they keep us infomred on what is happening between the art market and technology, new platforms and sales practices. E-Commerce can change very rapidly, and what is working one year, may become obsolete or out of fashion the next year (or even next month). The report notes that online art trade is one of the fastest growing sectors.
The highlights of the report include
Report Includes:
The World’s Top 3 Online Art Trading Platforms by Volume- Top Five Digital Strategies for the Global Art Industry
- Skate’s Digital Score as of August 1, 2014
- Top Five Web Strategies for the Global Art Industry
- Monthly average page views for May-July 2014
- Best Strategic Moves (June – August 2014)
- Key Trends
- Skate’s Top 30 Digital Strategies for Art Businesses
- Skate’s Top 30 Digital Strategies for the Global Art Industry
- Use of Digital Platforms
- Top 30 Digital Strategies for Art Businesses
- Skate’s Top 30 Stickiest Sites
- Skate’s Top 30 Facebook Strategies for Art Businesses
- Skate’s Top 30 Twitter Strategies for Art Businesses
- The Quest for a Winning Business Model and the ARPU Strategic Dilemma
- Art Business: Skate’s Highest Rated Digital Strategies and Enterprise Value
- Product Battle – Securing Quality Consignments
- Business Model to Watch: Digital “Art Vanity Fair” Operators
Excerpt from the Executive Summary:
Although we continue to refine our methodology, Skate’s ranking of digital strategies in the art industry leaves no room for ambiguity as far as what the winning digital business model is today. The aggregation and electronic distribution of digital intellectual property rights for various creative outputs is currently the best digital strategy in the art industry. This strategy has reaped the rewards of both the largest equity valuation and the biggest audience. Shutterstock and Getty Images rank head and shoulders above all other art industry digital plays on Skate’s Digital Scorecard (for methodology, please see Schedule A). Both firms are richly valued by capital markets, operate truly international, multilingual, state-of-the-art digital products and are growing at a phenomenal rate (42% CAGR for Shutterstock over the last five years).
While image licensing might be the largest and most profitable art digital business today, the online art trade is clearly the fastest growing. Table 1 ranks the world’s largest online art trading businesses by volume and providing evidence that the highest growth rates today are found in this segment of the global art industry.
TABLE 1:
THE WORLD’S TOP 3 ONLINE ART TRADING PLATFORMS2 BY VOLUME3
NAME / $ MILLIONS
|
GMV, 1H 2014, USD
|
GMV, 1H 2013, USD
|
CHANGE, %
|
|---|---|---|---|
| Paddle8 | 17.4m | 3.5m | 399% |
| Auctionata | 16.1m | 8.2m | 97% |
| Christies | 14.4m | 7.7m | 87% |
Sources: www.skatepress.com, paddle8, Auctionata and Christie’s
All in all the following digital strategies are represented well in our rating: low revenue per client e-commerce (e.g., price data, image licensing and custom art based merchandise and printing), advertising driven media models, listing/aggregation media models, and online auctions and galleries (high revenue per client e-commerce). Not surprisingly, none of the traditional galleries made it into the top 30 digital strategies; the highest rated are Gagosian (#35 under Skate’s Digital Score), Serpentine (#44), Pace (#48) and David Zwirner (#49).
The five top-rated art businesses in terms of digital strategy as measured with Skate’s Digital Score are pure play digital ventures that have no off-line legacy issues to manage. This fact provides telling evidence of how difficult it is to migrate art businesses established in an offline world into an online future. The highest rated business with offline roots is Christie’s, which only ranks 7th in Skate’s Digital Score (see Table 4 for the full rating).
That said, Skate’s Digital Score reflects a digital audience rather than the size of the business or economic efficiency of the business model. Traffic and business size sometimes provide a striking mismatch, harking back to the early days when website proprietors were still learning the right monetization models. And some of the most successful art businesses today might rank relatively low on Skate’s Digital Score but appear high on revenues and trading volume metrics (like paddle8 and Dorotheum).
The digital strategy rankings begin to look very different when art businesses are ranked according to other individual factors, such as Facebook audience, Twitter followers, and the general stickiness of their web presence. These data and trends of using varied digital platforms and strategies are included in Section 5 of this report.
TABLE 2:
TOP FIVE DIGITAL STRATEGIES FOR THE GLOBAL ART INDUSTRY SKATE’S DIGITAL SCORE AS OF AUGUST 1, 20144
#
|
URL
|
LOGO
|
BUSINESS MODEL
|
SCORE
|
|---|---|---|---|---|
| 1 | shutterstock.com |  | Digital imagery licensing | 100 |
| 2 | gettyimages.com |  | Digital imagery licensing | 14.96 |
| 3 | artnet.com |  | Art media and online auction | 10.06 |
| 4 | society6.com |  | Art e-commerce platform | 7.83 |
| 5 | liveauctioneers.com |  | Auction aggregation and listing service | 7.21 |
Source: www.skatepress.com
 |
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