We continue to draw insights from an annual overview of the world's art market, and what it says beyond art as well as within it.

It pays to recruit and nurture more female artists if you want to run a profitable art gallery business. Meanwhile, blockchain technology is gaining traction in the sphere despite headwinds from crypto assets turmoil, a senior figure from the fine art world says. 

The UBS and Art Basel annual study of the industry found that galleries with lower female artist representation are worse market performers. In 2022, for example, galleries with less than 20 per cent of female artists in their programmes had stagnant and declining sales year-on-year, while those with more than 80 per cent had significantly higher growth of 21 per cent. (See related articles about this report here and here.)

Correlation isn’t causation but the pattern is suggestive of a figure such as Bernadine Bröcker Wieder, who is CEO of Arcual, a business based in Zurich, which is a blockchain ecosystem for the art community. 

While this news service understandably wanted to ask Wieder about her view on how digital tech affects the fine art world, it first asked about what the UBS/Art Basel report had to say about female artists and the competitive edge they bring to galleries today.

“Supporting female artists is something of real value and relevance to collectors, which clearly drives results for the galleries who understand this,” Bröcker Wieder said in an interview. “We can look at Artsy’s research last year [showing] that the younger galleries have greater gender parity in artists they represent (and longer waitlists for those ultra-contemporary hot artists). The next step is to ensure that female artists feel empowered in their demands within the relationships with galleries, as they clearly drive better business performance, while legally ensuring that they control their careers.” (Artsy is an online arts marketplace.)

Such hard figures feed into the debate about how “diversity” is not or should not be a marketing catchphrase for a tick-box exercise, but should make business sense. 

Bröcker Wieder has been CEO of Arcual since April last year. Arcual is backed by MCH Group, the Swiss live marketing business, and the Luma Foundation, the Swiss non-profit group for artists, and incubated by BCGX, which is the tech and design unit of Boston Consulting Group. Arcual uses pioneering technologies to “re-balance the art ecosystem.”

Prior to Arcual, Bröcker Wieder was a Young Ambassador at the Museum of London. She was previously a director of Vastari Labs (launched in July 2021) which works with digital artists, non-fungible token markets, museums, exhibitors and others in the technological and cultural industries. 

With HNW individuals often enthusiastic art collectors, and interested in the area for investment reasons also, a number of banks and advisory firms serve this client segment. Events such as art auctions and exhibitions can be barometers for how prosperous – or not – high net worth individuals think they are and how willing they are to splash out and enjoy their wealth. 

Tech and art
Mention of non-fungible tokens, aka NFTs, shows how the worlds of fine art and technology increasingly intersect. 

The UBS/Art Basel report said that blockchain, aka distributed ledger technology, helps to lower barriers to entry into the market, enabling new collectors to enter – an important addition to the market’s long-term health. 

NFTs have taken some knocks along with volatility of the wider crypto assets space, but they remain an important sector. And while desire to buy art in physical auctions has come back after the pandemic lockdowns, appetite for the tech side appears to be holding up. Each NFT is a unique token on a blockchain which stores information about provenance that can be traced back to the original issuer; it provides collectors with a way to build a digital collection. NFTs are popular in applications which require unique digital items, including crypto art, digital collectables and online gaming, where some guarantee of authenticity and ownership history adds value.

Bröcker Wiederhere said that there is an appeal to youth.

“We know that a proportion of the younger generation value digital possessions equally to physical ones – and take pride in what they experience online as well as in real life. For example, in 2022 a Yougov poll found that people under 30-years-old were much more likely to think that NFTs were a good investment – [than be] strongly against it,” she said.

“As more internet-based businesses fail, social media pages disappear and internet reach can be interrupted, the promise that information stored on the blockchain can prevail, is important to younger generations and an attractive offer to new collectors, who value that security,” Bröcker Wieder continued. 

There have been arresting examples of NFT activity in the past three years. Examples include those of the musician Grimes selling $6 million worth of digital artworks via auction on Nifty Gateway, a marketplace which allows users to buy, sell, display and create a collection of "Nifties." One short video, ‘Death of the Old’ sold for nearly $390,000. However, most of the $6 million in sales came from two pieces – "Earth" and "Mars" – with almost 700 copies being sold. Another NFT sale (2021) was that of Beeple’s “First 5000 Days” artwork for £50 ($62) million at the first digital-only art auction by Christie’s.

More regulated
While there’s ferment around technology, it also points to a more regulated future, Bröcker Wieder said. 

“Despite a history of mistrust towards web3 and cryptocurrency, the art world is now beginning to embrace the huge potential of blockchain technology,” she said. “To ensure confidence, Arcual works with fiat currency, and its first application, Salesroom, offers a wide range of payment options with up to million-dollar transactions, the highest digital transaction on the online market in currencies including Swiss franc, euro, sterling and dollar. By operating within existing frameworks, Arcual is able to streamline operational processes with state-of-the-art tech,” she said. 

Nurture and poaching
Away from tech excitements, Bröcker Wieder noted that a feature of the art world is how backers of artists retain these creators from the clutches of rivals. In that sense, the business resembles how football clubs or motor racing teams can battle over players and drivers they’ve nurtured.

The UBS/Art Basel report noted: “Issues concerning how galleries maintain long-term connections and relationships with artists in their programmes are not new.” The impact of larger galleries poaching artists from smaller places can be “devastating."

Bröcker Wieder explained what she said is a rational response.

“Galleries need to demonstrate a commitment to their artists from the very start of their career in order to keep them. At Arcual we believe in nurturing this relationship, forging and maintaining agreements using immutable smart contracts and protecting the interests of relevant parties for the future – our gallery resale terms are a clear example of this,” she said. 

The report showed how established artists can dominate the market – perhaps unsurprisingly because of name recognition. 

“In 2022, sales from the single highest-selling artist accounted for an average of 31 per cent of sales for galleries, while their top three artists accounted for just over half of sales,” the report said.

It continued: “The skewed distribution of sales towards a few top-selling artists was more pronounced for businesses operating in the primary market, where, on average, a gallery’s top-selling artist accounted for just over one third of sales in 2022 and the top three for 56 per cent...Finding new artists remained one of the top priorities for the dealers surveyed. It was in the top five for both 2022 and for the next five years for all dealers surveyed, and in the top four for primary market dealers.” 

Bröcker Wieder said artists are looking for greater access and participation in their own careers.

“Arcual puts artists at the centre of the ecosystem; galleries that use our suite of digital tools are demonstrating their commitment to empowering and supporting artists,” she said. 

Shock of the new?
The report also noted that there is a need for fresh blood in the sphere: “The share of sales to new buyers declined in 2022 for all dealers turning over more than $500,000. They commented that new middle-market buyers were ‘thinner on the ground’, and that they had relied on sales to regular clients, using fairs and other events to reconnect in person and introduce new artists and works.”

“If there is a need to engage more new artists for galleries, simultaneously there is also a pressing need to engage new buyers,” Bröcker Wieder said.

“The report shows that the `average period in operation for most art dealers is 29 years’. These galleries are set in operational ways from the past as a result. New art collectors, however, do not have these existing relationships and are therefore used to more efficient sales processes, similar to those they have experienced in other industries. They want to see that their money is being handled safely; dealers need to upgrade their payment methods and certificates of authenticity if they are going to attract these new and technologically savvy collectors,” she said. 

If galleries and dealers don’t innovate, they will lose business, Bröcker Wieder added: “Despite a return to regularity post-Covid, and a recovery of sales, the primary sources quoted in the Art Market Report’s dealers section highlight unequivocally an undertone of fear about the future of the art market. There is a clear worry about engaging both new artists and new collectors alongside apprehensions about new market entrants. These dealers and galleries need to engage with innovation to ensure that their recovery turns into growth rather than retraction.”