Buying Art on the Internet

Courtesy Solomon R. Guggenheim Museum

The new breed of virtual galleries and auction sites.

On opening night of Art Basel Miami Beach last November, a group of hip, young fairgoers swelled around the hostess stand at Soho House Miami Beach, jostling to get past the velvet ropes. This was hardly unusual for Art Basel, where hordes of partyers beg lithe ladies with lists to let them in to ever-more-exclusive events. The difference on this particular night, with security tighter than at other soirées and a higher concentration of A-listers arriving in long black cars, was that the evening’s honoree wasn’t a gallery or an artist but an upstart website called Art.sy, which has yet to even launch.

Once the lucky ones were handed a pass to the party, they had to present it at three separate checkpoints before finally heading down a candlelit walkway to the sprawling tent on the beach. There, along with a full raw bar and paella buffet, they would find actors Owen Wilson and Adrien Brody, designer Roberto Cavalli, Rupert Murdoch’s wife, Wendi, and Moscow gallerist and girlfriend of Russian billionaire Roman Abramovich, Dasha Zhukova. But the center of attention was not global gallery owner Larry Gagosian or even Zhukova, an investor in the site and one of the evening’s hostesses, but a lanky 25-year-old engineer named Carter Cleveland.

In 2009, fresh out of Princeton, Cleveland had the idea for a “Pandora for art,” a site that would work much like the music service, but for collectors. Scheduled to launch this spring, Art.sy is powered by a complicated algorithm that scores artwork on the basis of hundreds of traits, such as period, content, color and texture, creating an “art genome” that allows users to discover new artists whose styles correspond to their tastes. Top galleries, including Gagosian and New York’s David Zwirner, were quick to sign on, and the site has amassed a large database of blue-chip works.

It was this sophisticated technological component that helped lure the same investors who first funded Facebook, such as PayPal founder Peter Thiel. Another, Accel partner Jim Breyer, was now in a huddle with Cleveland by the bar. As partyers reached past them to order elaborate cocktails, it felt almost like boom times again, but this time for art 2.0. After the Art.sy party, events for other new online galleries and art-sales sites, including Artspace, Paddle8, Exhibition A and Grey Area, highlighted the fair’s calendar. The art community—arguably, one of the world’s most elite clubs—was lining up to participate in the world’s most egalitarian medium: the Internet. And by week’s end, it seemed that coders and engineers would soon be the people to know.

Over the past decade, as fashion houses and designer boutiques established a strong online presence, Internet sales of luxury goods have exploded. Though a smattering of galleries and auction houses tried to join this groundswell, it was the VIP Art Fair’s debut in early 2011 that finally proved that the art market might find online success as well. Two years before, Jane and James Cohan, owners of the James Cohan Gallery, with outposts in New York and Shanghai, had realized that there was no single place where works from the best galleries could be aggregated. At the same time, the art market was in a slump and looking for ways to find new audiences. The Cohans decided to solve both problems at once, creating a virtual art fair featuring top galleries from around the world. So last January, when 41,000 registered users descended on the VIP Art Fair’s 138 booths, they did so not in a stampede in the convention center, as at Art Basel Miami Beach, but with a click of a mouse at their computers. By the end of the week, the site had had 7.65 million artwork views, attracted visitors from 196 countries and realized individual sales as high as $1 million.

London’s White Cube, the Gagosian Gallery and David Zwirner were among the first to sign up for the VIP Art Fair. “It seemed like a very natural, logical extension to what’s going on with the real fairs,” says Justine Durrett, director of sales for David Zwirner. In its virtual booth, Zwirner offered a Chris Ofili sculpture, a piece that would have been expensive and difficult to ship to a traditional fair, and it sold for $375,000. During VIP’s first run, however, there were glitches with the chat rooms, and the site had to be taken down for hours at a time. To avoid such issues at future fairs, the Cohans have spent the last year assembling a more technologically savvy team, including new CEO Lisa Kennedy, a 15-year veteran of the e-commerce industry. “We hope the fair attracts the attention of people who would like to collect but may be intimidated,” says Kennedy. “It allows them to view art from the comfort of their own home.”

While several of the original galleries did not sign up again this year, VIP has still managed to add three more fairs in 2012, starting in early February with VIP 2.0. And since VIP’s debut last year, several other art-sales sites have come online. Last March saw the launch of Artspace, a virtual marketplace of more than 100 museums and galleries. With a target price range of $200 to $30,000, Artspace hopes to appeal to a younger set of art aficionados. “We’re acting as advisors to this generation of collectors,” explains cofounder and CEO Catherine Levene, an online-media specialist. According to Durrett, David Zwirner has already sold a handful of pieces on Artspace, including Ofili prints and a Marcel Dzama drawing. “We’re very happy with the results,” she says.

Paddle8, a site started by former Phillips de Pury auctioneer Alexander Gilkes and tech entrepreneur Aditya Julka, premiered last May as a curated online storefront, where each month experts such as writer Glenn O’Brien, critic Vince Aletti and artist Marina Abramovic create exclusive exhibitions. The site has also partnered with the New Art Dealers Alliance (NADA) and the Art Los Angeles Contemporary (ALAC) fairs to create private online preview sales, something it will also do for the annual New York Armory Show in early March.

With 200 galleries signed up, Paddle8 plans to be involved in all steps of the sales process, from advising to acquisition. “The site gives collectors a greater degree of transparency,” says Gilkes. “And it makes art acquisition far more convenient, free from constraints such as time and geography.”

It is Art.sy’s “art genome,” though, that has managed to attract the most sought-after investors, like Twitter founder Jack Dorsey. Now working out of a sprawling Manhattan office space, Cleveland and cofounder Sebastian Cwilich, a technology consultant and former Christie’s vice president, say their site is primarily an educational tool to help collectors and art fans figure out what they like. (Though Art.sy won’t sell any of the artworks directly, it will facilitate relationships between members and partner galleries, receiving commissions on all resulting purchases.) They’ve recently hired John Elderfield, a former chief curator at New York’s Museum of Modern Art, as senior advisor, and both Larry Gagosian and Pace Gallery president Marc Glimcher serve as active consultants. When asked how Art.sy differentiates itself from the other sites, Cleveland says, “We consider ourselves fundamentally a technical company. A team of the best engineers in the city is in-house.”

It’s too soon to tell whether Art.sy will live up to its investors’ expectations—or, for that matter, if any of these sites will. While galleries have a small price to pay to test the waters, they’re not quite ready to dive in headfirst. New York’s Mary Boone Gallery has worked with both Art.sy and Artnet, a news site that recently began selling pieces for certain galleries, but, says director and partner Ron Warren, “we haven’t found that it translates to direct selling of the work.” Warren has found the sites useful to the extent that they pique collectors’ interest in an artist’s work, but still, he says, “I can’t think of a single instance where they bought something on the Internet versus in person.”

The Marianne Boesky Gallery, too, has had mixed results from the sites it has joined. Since the 2011 VIP Art Fair, the New York gallery has had visits from collectors who were drawn to the art after first seeing it online. Owner Marianne Boesky, who has sold a few pieces on Artspace, views the online marketplace as the natural evolution of art sales, but, in the end, she hesitates to help promote a process that removes the experience of seeing art in person. “I have such mixed feelings about it,” she says.

Blacklots, another art site to hit the web early last year, features daily public auctions of contemporary art. Cofounded by tech entrepreneur Minor Childers and former Gagosian director and Phillips de Pury chairman Rodman Primack, the site uses the flash-sale model of companies like Gilt Groupe to sell works by Ofili, Takashi Murakami and Vik Muniz, among others. Like its fellow sites, this one also has an all-star roster of art-world notables, including gallerist Jeanne Greenberg Rohatyn and collector Adam Lindemann. The author of the book Collecting Contemporary (Taschen, 2006), Lindemann has lent his support to many of these endeavors, including the VIP Art Fair and Paddle8, writing about them on his site, adamlin demann.com. “I like online art shows because I don’t feel like I have to talk to anybody,” he says. “You get to lose the schmooze, and that can be a good thing!”

Sales Report

A sampling of artworks recently sold by the top virtual galleries and auction sites shows that pieces by important contemporary artists are slowly but surely finding a market online.

The second annual VIP Art Fair, held online February 3–8, featured 136 galleries and art foundations from six continents.

Artspace

Louise Bourgeois Reply to Hayter, 1999; lithograph, 27.25 x 30 inches; edition of 70; $5,500.

Sol LeWitt Two Centimeter Wavy Bands in Colors, 1996; oil-base woodblock print, 22.5 x 22.5 inches; edition of 60; offered in partnership with the Brooklyn Museum; $2,500.

Gerhard Richter Seestuck 1, 1969; offset lithograph, 24.5 x 23.5 inches; edition of 150; $2,500.

Cindy Sherman Untitled (Doctor and Nurse), 1980–1987; framed diptych of 8-x-10-inch silver-gelatin prints; edition of 125; $5,000.

Blacklots

Damien Hirst Beautiful, Spinning the Bottle Painting, 2005; watercolor on paper; single edition; from a private collection; auction range, $12,000–$18,000.

Barbara Kruger Untitled (You Will Never Wake Up from This Beautiful Dream), 2006; framed photograph, 48 x 60 inches; edition of ten; from a private collection; auction range, $15,000–$20,000.

Takashi Murakami Planet 66 and Planet 66: Summer Vacation, 2004; lithographs; edition of 50; from a private collection; auction range, $15,000–$20,000.

Yoshimoto Nara Life Is Only One, 2010; woodcut print; edition of 50; from the Pace Gallery’s Pace Prints series; auction range, $4,000–$6,000.

Paddle8

Ben Durham Brandon (4 Maps), 2010; framed handmade dyed paper; sold by the Nicole Klagsbrun Gallery, New York; estimate, $10,100.

Kon Trubkovich Sky High (Things Are Getting Better), 2010; oil on linen, 23 x 22 1/4 inches; sold by the Marianne Boesky Gallery, New York; sold for $7,500.

Vip Art Fair

Olafur Eliasson London Sunrise, 2011; five floor-to-ceiling circular, yellow mirrors; sold by i8 Gallery, Reykjavik, Iceland; auction range, $100,000–$250,000.

Chris Ofili Mary Magdalene (Infinity), 2006; bronze sculpture; sold by David Zwirner, New York; $375,000.

Bill Viola Dissolution, 2005; color-video diptych on plasma displays; sold by the James Cohan Gallery, New York and Shanghai; auction range, $250,000–$500,000.

See our guide of top online galleries and auction houses.