Is online art rising up the popularity and demand scale?

Buyers tend to see online art sales as more accessible and transparent than sales in the gallery world, with its reputation, fair or not, for being a kind of exclusionary club. And as many online art vendors like to point out, there are far more $5,000 and $10,000 prints and photographs in the world than there are $50,000,000 Warhols changing hands at marquee auctions.

According to Michael Moriarty, the chairman of Skate’s Art Market Research, a consulting firm that closely follows Artnet’s business, his analysts had been skeptical about Artnet’s ability to make online auctions a significant part of its business.

In an analysis of the trend, Randy Kennedy, The New York Times writer, states in an article; “Artnet has long been known as the Bloomberg terminal of the auction business; it made its name even before the advent of the Web by building a database of historical auction prices that now numbers in the millions, on which collectors, dealers and auction houses like Sotheby’s and Christie’s rely.

“But the company’s online auction business has now moved more than 6,500 pieces, generating $2.5 million in commissions on $12 million in sales for Artnet in 2010, including a few high-dollar outliers, like a Richard Prince painting that sold for $295,000 (before commissions). The business is not yet profitable for Artnet, but the company says that is only because it has been spending considerable money to develop the auctions.

It projects that they will begin to turn a profit toward the end of next year. “Now it seems that the technology has reached a point, and the market has evolved to a point, where this kind of business is really gaining traction,” said Mr. Moriarty, a former lawyer for the Securities and Exchange Commission. Of Artnet, he added, “It’s not going to be long before they’re going to have to worry about a lot of competition.”

(Information courtesy: 'A Resurgence in Art Buying Over the Web', Randy Kennedy of The New York Times)