More art lovers are buying works on the internet, with potentially huge effects on the way the whole art market works.

The Hiscox Online Art Trade Report states that the online art market continued to grow strongly, rising 24% to $3.27 billion in 2016, despite the overall global art market slowing in 2015.

But it's not just the increased numbers of online art sales that is impacting the traditional art market, dominated as it is by galleries, dealers and auction houses. Online art sales are changing the kind of art that buyers can access, the way they pay for it, the profile possibilities of artists – and critically, the traditional model of the art market.

“People who buy art have traditionally purchased works by local artists through dealers, galleries and auctions,” says Maureen McCarthy, founder and CEO of online art gallery Artplode, launched in 2014. The platform has artworks worth £10 million for sale by artists, collectors, dealers and galleries located in more than forty countries


Buyers have a global choice


“Online galleries mean artists' work is visible anywhere," says McCarthy. "In the last decade we have seen increased interest in art from China, Russia, more recently, Africa. A painting by an Ethiopian artist represented by Blue Nile Gallery in London sold to a buyer in Oregon who saw it for sale on Artplode. Interest in digital art, that can be downloaded, is also increasing,” says McCarthy.

Many sites are operated as the online arms of bricks-and-mortar galleries and auction houses, and by dealers, but sites like Artplode allow not just galleries and dealers but also collectors and artists to market their own work, for flat fee of £60, bypassing the traditional machinery of the art market.


Undiscovered artists can win fame


“Teresa Deborah Ryle, a self-taught naive artist from Corsham, Wiltshire, who markets her works on the site, was taken up by Jerry Saltz, the art critic of the New Yorker, who now champions her work.”

Independent online sites like Artplode also disrupt the traditional commission based business model which dominates the art market. “Auction houses charge buyers commission, which can add up to 30% of the sale price. They also charge sellers commission, usually between 10% and 25%,” explains McCarthy, whose site charges no commission, just the flat fee.

Dealers and galleries select the artists they represent with commercial considerations integral to determining whose works are exhibited. Many talented artists struggle to find agents or gallery representation which is why the option of offering their artworks for sale online is appealing.

If a dealer or gallery does agree to represent an emerging artist, the contract typically forbids the artists to sell elsewhere – and some online art sites also work like this. Meanwhile collectors are discouraged by galleries from reselling artworks purchased until a future time that the gallery determines the work has appreciated in value. “Galleries want to control the price the artist's work commands and do not want artists or collectors acting independently to undercut them through private or online sales” McCarthy says.

“The online sector of the art market enables artists and collectors to easily and inexpensively offer artworks for sale to collectors worldwide. This has the potential to significantly impact the operations of galleries and auction houses and their restrictive trade practices and bloated commission structure”.

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