This article is taken from the June 2024 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issues for just £10.

Since the 1990s almost every consumer market has been transformed by the internet. The art market has tried hard to embrace technology, which has certainly boosted the lower end, but much business continues as it has done for centuries: in person.

At the beginning of this century, Sotheby’s conceived a way to disrupt the traditional model by selling online at the lower end in partnership with Amazon. Jeff Bezos explained the intent: “We’re trying to create a whole new auction site, one that makes sense for valuable objects. The point is to break new ground selling fully-authenticated, fully-guaranteed objects online using Sotheby’s experts around the world and its network of more than 2,800 dealers.”

It was a good idea that came too early. It never took off, and Amazon stuck to its volume and logistics business.

Today every auction house sells online and the market is truly global, perhaps too global. Dealers also advertise their stock online in the hope that someone will see it and buy, not unlike a mail order catalogue. There are also armies of sellers on Instagram, peddling their own unique style.

Yet, other than offering global access, how business is conducted has changed relatively little since the 1990s. Technology has certainly enabled a wider, more international, consumption. But it has also enabled the removal of the buyer from the gallery or auction house — bidding online or by telephone — eliminating something which continues to be the key component of conducting business in this highly interpersonal market.

The art market lives on personal contact and thrives on exclusivity, privacy and vanity: many buy art (mostly contemporary art) to gain access to what some consider to be a thrilling group of people creating an “art scene”, attending parties at various biennales or at large commercial gallery exhibition openings. There are also those who buy to demonstrate their wealth.

Others, bravely, buy for investment — either buying widely or buying a fraction of a single artwork, not unlike buying a share in a listed company or racehorse. Most of these transactional systems existed before the birth of the internet. It seems the technology boom of the past quarter-century has somehow bypassed the art market.

Yes, online auction price databases such as Artnet are convenient, user-friendly and a big improvement over the printed equivalent of the 1990s — the Art Sales Index. But these indices remain incomplete, especially for works offered (i.e. unsold) at auction. Access to historic auction sale information remains difficult.

Devin Wenig, art collector and former CEO of eBay said recently in an interview with art advisor Josh Baer: “I can say unequivocally that I have never seen a more opaque, skewed or artificially-maintained marketplace than the global art market.

The structures of the art market depend on degrees of obfuscation and information scarcity.

“As I began to collect, it took time to understand how prices are determined, how buyers gain trust, and how artists come to market. Much of it exists only in this small community that we love.”

The only system which may prove to be transformative is the blockchain technology associated with NFTs. The recent, rather strange boom in NFT digital art which, with a few exceptions, had little to do with art, introduced the traditional art market to blockchain tokenisation. According to Nanne Dekking, founder of the Artory digital database, this secures “transaction data and exceptional domain expertise in a single source of truth”.

Christie’s embraced this technology at several sales in 2022, attaching a QR code to each item and generating a digital certificate. It is not clear if the identity of the owner was also to be included in the digital certification.

There are two problems with this: first, the sticker could be easily removed from the physical object and second, the (Artory) online digital database where these records are held may not endure.

Nor is it at all clear where this information can be found or if it is accessible.

The structures of the art market, where profit margins are often built on resale, depend on degrees of obfuscation and information scarcity.

The contemporary and modern art market is moving ever closer to a separate, fully financialised market, with many financial instruments facilitating the sale of or investment in artworks.

However, to complete the financialisation of this area of the art market, there are two key missing pieces — first is reliable, complete and accessible data, and the second a widely-used, reliable and transparent exchange system which gives confidence to inexperienced buyers when entering the waters of the art market.

And how will those exciting parties at Gagosian feel if the mystery around price and ownership is opened up?