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1、The Art Market 2018An Art Basel&UBS Report Prepared by Dr Clare McAndrew Founder of Arts EconomicsContents3Auction SalesKey Findings 102 3.1|Auction Sales in 2017 104 3.2|The Global Distribution of Auction Sales 108 3.3|Price Segmentation 116 3.4|Fine Art Sectors 126 3.5|Post War and Contemporary Ar

2、t 130 3.6|Modern Art 146 3.7|Impressionist and Post Impressionist 154 3.8|Old Masters and European Old Masters 1625Online SalesKey Findings 229 5.1|The Online Art Market 230 5.2|The Online Auction Sector 234 5.3|The Online Dealer Sector 244 5.4|Blockchain and the Art Market 246 5.5|Website Traffic a

3、nd Social Media 2527Economic Impact and ConclusionsKey Findings 321 7.1|Employment in the Art Market in 2017 322 7.2|Dealer Sector Employment 322 7.3|Auction Sector Employment 325 7.4|Ancillary Economic Impact 327 7.5|Conclusions 332 Appendix Sources Used in the Art Market 2018 3424Exhibitions and A

4、rt FairsKey Findings 177 4.1|Exhibitions 179 4.2|Art Fairs 190 4.3|Art Fair Sales 194 4.4|Art Fair Geography and Numbers 200 4.5|Art Fair Content 215 4.6|Conclusions 2236Global Wealth and Art BuyersKey Findings 262 6.1|Regional Performance in 2017 264 6.2|World Wealth 274 6.3|Wealth Distribution 280

5、 6.4|Global Millionaires and Billionaires 286 6.5|Top 200 Collectors 294 6.6|Art Collector Survey 296 6.7|Art Buyers 308Tables and Figures 4 Acknowledgments 10 Directors Foreword 12 Statement by UBS 13Key Findings 151The Global Art Market in 2017Key Findings 27 1.1|Overview of Global Sales 28 1.2|Gl

6、obal Market Share 34 1.3|Regional Sales 362Dealer Sales and ExhibitionsKey Findings 45 2.1|Dealer Sales in 2017 46 2.2|Market Prices and Segmentation 56 2.3|Dealer Margins and Financing 58 2.4|Supply and Inventories 63 2.5|Primary Versus Secondary Markets 71 2.6|Gallery Longevity 80 4Tables and Figu

7、res1The Global Art Market in 2017Table 1.1|The Global Art Market:Value and Volume of Transactions 29Figure 1.1|Sales in the Global Art Market 20072017 30 Figure 1.2|Growth in Sales in the Global Art Market 31 Figure 1.3|Global Art Market Share by Value in 2017 34 Figure 1.4|Global Market Share of th

8、e US,UK and China 20072017 35 Figure 1.5|Sales in the Major Art Markets 20072017 38 Figure 1.6|EU Art Market Share by Value in 2017 412Dealer Sales and ExhibitionsTable 2.1|Sources of Supply for Dealers in 2017 64 Table 2.2|Average Time Taken to Sell Works from Inventory in 2017(by Sector)67 Table 2

9、.3|Top Challenges in 2017 and in the Next Five Years 99Figure 2.1|Share of Surveyed Dealers by Total Sales in 2017 47 Figure 2.2|Average Sales by Sector 2016 and 2017 48 Figure 2.3|Change in Turnover by Dealer Segment 20162017 49 Figure 2.4|Dealers Views on Sales in the Future 50 Figure 2.5|Dealers

10、Views on Sales Over the Next Five Years 52 Figure 2.6|Median Prices by Sector in 2017 56 Figure 2.7|Share of Total Dealer Sales by Price Bracket in 2017 57 Figure 2.8|Debt Ratios in the Dealer Sector in 2017 59 Figure 2.9|Dealers Gross Profit Ratios in 2017 60 Figure 2.10|Dealers Net Profit Ratios i

11、n 2017 62 Figure 2.11|Share of Sales by Inventory Basis and Sector in 2017 65 Figure 2.12|Average Time Taken to Sell Works from Dealers Inventory in 2016 and 2017 67 Figure 2.13|Average Payment Cycle for All Dealers in 2016 and 2017 68 3Auction SalesTable 3.1|Annual Growth,Total Growth and Share of

12、Sales by Value 118 Table 3.2|Annual Growth,Total Growth and Share of Sales by Volume 120 Table 3.3|Top 20 Selling Post War and Contemporary Artists in 2017 135 Table 3.4|Top Prices in the Post War and Contemporary Sector in 2017 136 Table 3.5|Top 20 Selling Living Artists in 2017 141 Table 3.6|Top P

13、rices for Living Artists in 2017 142 Table 3.7|Top 20 Artists for Works Created in the Last 20 Years in 2017 144 Table 3.8|Top Selling Artists in the Modern Sector in 2017 151 Table 3.9|Top Prices in the Modern Sector in 2017 152 Table 3.10|Top 20 Selling Impressionist and Post Impressionist Artists

14、 in 2017 159 Table 3.11|Top Prices in the Impressionist and Post Impressionist Sector in 2017 160 Table 3.12|Global Market Share:Old Masters Paintings in 2017 165 Table 3.13|Top 20 Selling Old Master Artists in 2017 170 Table 3.14|Top Prices in the Old Masters Sector in 2017 172 Figure 2.14|Payment

15、Cycle for Dealers in Selected Countries in 2017 70 Figure 2.15|Primary Market Dealers in 2017 72 Figure 2.16|Secondary Market Dealers in 2017 74 Figure 2.17|Dealers Trading in the Primary and Secondary Markets in 2017 76 Figure 2.18|Dealers Trading in the Primary and Secondary Markets:Sales and Arti

16、sts Represented in the Secondary Market in 2017 77 Figure 2.19|Number of Years in Business in 2017(Share of Companies)81 Figure 2.20|Median Years in Business in 2017 by Sector 83 Figure 2.21|Gallery Openings and Closures 84 Figure 2.22|Gallery Openings by Region 86 Figure 2.23|Gallery Closures by Re

17、gion 8745 Tables and Figures64Exhibitions and Art FairsTable 4.1|Top 20 Most Exhibited Artists 185 Table 4.2|Top Art Fair Cities in 2017(Number of Major Fairs)205 Table 4.3|Reported Visitor Numbers at 20 Major Fairs in 2013 and 2017 207 Table 4.4|Reported Visitor Numbers at a Selection of Regional F

18、airs in 2013 and 2017 208 Table 4.5|Exhibitor Numbers Selected Major Art Fairs 2013 and 2017 209 Table 4.6|Exhibitor Numbers Selected Smaller Art Fairs 2013 and 2017 210 Table 4.7|Most Exhibited Artists by Region at Art Fairs in 2017 216Figure 4.1|Share of Exhibitions by Institution Type 2017 180 Fi

19、gure 4.2|Number of Exhibitions by Institution 20072017 181 Figure 4.3|Number of Solo and Group Exhibitions Worldwide 20072017 (Commercial and Non-Commercial Exhibitions)182 Figure 4.4|Geographical Distribution of Exhibitions in 2017 183 Figure 4.5|Share of Exhibitions by Sector in 2017 184 Figure 4.

20、6|Share of Exhibitions of Artists in Their Home Market 20072017 186 Figure 4.7|Shares of Dealer Sales by Channel in 2017 190 Figure 4.8|Timeline for the Emergence of Art Fairs 193 Figure 4.9|Share of Dealers Sales at Art Fairs 20102017 194 Figure 4.10|Estimated Total Art Fair Sales and Costs of Atte

21、ndance 20102017 196 Figure 4.11|Number of Major Fairs and Number of Exhibiting Galleries 201 Figure 4.12|Share of Number of Returns by Exhibitors to Art Fairs 20072017 203 Figure 4.13|Major Art Fair Locations in 2017 204 Figure 4.14|Gallery Origins at Global Art Fairs in 2017 206 Figure 4.15|Most Ex

22、hibited Artists at Selection of Top Art Fairs in 2017 214 Figure 4.16|Distribution of Artist Nationalities Exhibited at Art Fairs in 2017 215 Figure 4.17|Distribution of Artists Exhibited at Art Fairs in 2017 by Age 217 Figure 4.18|Gender Breakdown of Artists Exhibited at Art Fairs in 2017 218 Figur

23、e 4.19|Distribution of Posted Prices at Selected Art Fairs in 2017 220 Figure 4.20|Distribution of Average Prices Posted at Selected Art Fairs in 2017 by Media 221 Figure 4.21|Distribution of Priced Works Offered at Selected Art Fairs in 2017 222 Figure 4.22|Dealers Views on Fair Sales in the Next F

24、ive Years 22467 Tables and FiguresFigure 3.1|Global Market for Public Auction Sales 20072017 105 Figure 3.2|Auction Market Global Share by Value in 2017 109 Figure 3.3|Sales at Public Auction in the US and China(20102017)110 Figure 3.4|The Volume of Sales in the Chinese Auction Market(20042017)111 F

25、igure 3.5|Fine Art Auction Market Global Share by Volume in 2017 113 Figure 3.6|Share of Lots Sold and Total Value at Global Fine Art Auctions in 2017 by Price Bracket 117 Figure 3.7|Growth of Sales by Value in Price Segments 119 Figure 3.8|Market Share of the Fine Art Auction Market by Price Segmen

26、t in 2017 122 Figure 3.9|Share of Number of Artists by Price Segment in 2017 123 Figure 3.10|Market Share by Value of the Fine Art Auction Market:20002017 127 Figure 3.11|Market Share by Sector of the Fine Art Auction Market in 2017 128 Figure 3.12|The Post War and Contemporary Art Sector:20072017 1

27、31 Figure 3.13|Market Share of the Post War and Contemporary Sector in 2017 132 Figure 3.14|Sales in the Post War and Contemporary Sector 20072017:Key Markets 133 Figure 3.15|Sales by Price Bracket in the Post War and Contemporary Sector in 2017 134 Figure 3.16|Share of Sales by Living Versus Deceas

28、ed Post War and Contemporary Artists in 2017 137 Figure 3.17|Share of Global Sales of Works by Living Artists in 2017 138 Figure 3.18|Sales of Living Artists by Price Bracket in 2017 140 Figure 3.19|Share of Works Created in the Last 20 Years in Post War and Contemporary Auction Sector in 2017 143 F

29、igure 3.20|The Modern Art Sector:20072017 147 Figure 3.21|Market Share of the Modern Sector in 2017 148 Figure 3.22|Sales in the Modern Sector 20072017:Key Markets 149 Figure 3.23|Sales in the Modern Sector by Price Bracket in 2017 150 Figure 3.24|Impressionist and Post Impressionist Auction Sales 2

30、0072017 155 Figure 3.25|Market Share of the Impressionist and Post Impressionist Sector in 2017 156 Figure 3.26|Sales in the Impressionist and Post Impressionist Sector 20072017:Key Markets 157 Figure 3.27|Sales by Price Bracket in the Impressionist and Post Impressionist Sector 2017 158 Figure 3.28

31、|Old Masters Painting Sales 20072017 162 Figure 3.29|Sales in the Old Masters Sector 20072017:Key Markets 167 Figure 3.30|Sales in the Old Masters Sector by Price Bracket in 2017 16886Global Wealth and Art BuyersTable 6.1|Growth in GDP Per Annum,Constant Prices(%)268 Table 6.2|GDP per Capita(Ranked

32、Highest to Lowest in USD and PPP dollars)272 Table 6.3|Regional Changes in Wealth 20072017 278 Table 6.4|Location of Top 200 Collectors(Based on Primary Place of Residence)295 Table 6.5|Frequency of Use of Sales Channels for Art and Objects 300 Table 6.6|Share of Dealers Local Versus International B

33、uyers in 2017 and 2016 313Figure 6.1|Sales in the Art Market Versus Growth in Wealth,HNW Wealth and GDP 264 Figure 6.2|Growth in Global Wealth and Wealth per Adult 20002016 275 Figure 6.3|Regional Shares of World Wealth Versus Adult Populations in 2017 279 Figure 6.4|Share of Regional Wealth Holding

34、s of the Regions Top 1%,5%and 10%in 2017 281 Figure 6.5|The Distribution of World Wealth in 2017 283 Figure 6.6|Number and Wealth of Dollar Millionaires 20102022 287 Figure 6.7|Global Share of Dollar Millionaires in 2017 288 Figure 6.8|Global Share of Millionaires with Wealth in Excess of$50 Million

35、 in 2017 288 Figure 6.9|Global Share of Dollar Billionaires in 2017 289 7Economic Impact and ConclusionsTable 7.1|Ancillary Expenditure and Employment Generated in 2017 329Figure 7.1|Numbers Employed in the Dealer Sector in 2017 323 Figure 7.2|Gender and Age Profile in the Dealer Sector in 2017 324

36、Figure 7.3|Gender and Age Profile in the Second-tier Auction Sector in 2017 326 Figure 7.4|Share of Expenditure by the Global Art Trade on Ancillary Services in 2017 328 Figure 7.5|Global Sales in the Art Market Since 1990 33389 Tables and Figures5Online SalesTable 5.1|Website Metrics:Selected E-Com

37、merce Companies in 2017 254Figure 5.1|Sales in the Online Art and Antiques Market 231 Figure 5.2|Annual Growth in Online Sales:Art and Antiques Versus General Retail 231 Figure 5.3|Share of Online Sales(via Invaluable)by Auction House Turnover Level 237 Figure 5.4|Share of Online Sales(via Invaluabl

38、e)by Turnover Level 2014 Versus 2017 238 Figure 5.5|Share of Online Sales 20152017(via the-)239 Figure 5.6|Dealers Views on Online Sales Over the Next Five Years 245Figure 6.10|Global Personal Luxury Goods Market and Share of Chinese Buying 291 Figure 6.11|Share of Assets Purchased in the Last Two Y

39、ears 297 Figure 6.12|Spending on Works of Art/Objects in the Last Two Years 298 Figure 6.13|Number of Works of Art/Objects in Collections in 2017 299 Figure 6.14|Preferred Sales Channels for Art and Objects 301 Figure 6.15|Share of Collection Financed Through Credit or Loaned Funds 302 Figure 6.16|R

40、anking of Considerations When Purchasing Art 304 Figure 6.17|Resale Period for Works of Art Sold from Collections 305 Figure 6.18|Average Number of Buyers by Dealers Sales Turnover in 2016 and 2017 309 Figure 6.19|Share of Dealers Buyers by Purchase History 310 Figure 6.20|Market Share of Sales by B

41、uyer Group in 2017 312 Figure 6.21|Most Important Nationalities of Buyers for Dealers in 2017 31511 AcknowledgmentsAcknowledgmentsThe Art Market 2018 presents the results of a comprehensive analysis of the global art and antiques market in 2017.The report looks at the key macro-level trends in the g

42、lobal art and antiques trade,reporting on the performance of different regions,sectors and value segments of the market.The information presented in this study is based on data gathered and analyzed directly by Arts Economics()from dealers,auction houses,art fairs,art and antique collectors,art and

43、financial databases,industry experts and others involved in the art trade.(The Appendix outlines some of the key data sources used in the report.)Chapter 1 provides an overview of the global market,looking at the value,volume and regional distribution of sales of art and antiques in 2017 and the dec

44、ade leading to it.It reviews the performance of some of the major national and regional art markets over this ten-year period.Chapter 2 focuses on dealers and galleries,reporting on sales and other key indicators in different value segments and sectors of the market,and presenting an analysis of imp

45、ortant areas such as profitability,supply,inventories,financing and buyers.It reports findings on the primary market and the secondary resale market,distinguishing them in terms of dealer turnover,artist representation and other features,and discusses gallery longevity,providing quantitative analysi

46、s of gallery openings and closures along with a discussion of the main issues facing galleries in 2018.A critical part of the research each year involves a global survey of art and antique dealers.I would like to say a special thanks to Erika Bochereau of CINOA(Confdration Internationale des Ngocian

47、ts en Oeuvres dArt)for her continued support of this research,along with the presidents of the dealer associations around the world who promoted the survey among their members.Thanks also to Art Basel for helping to distribute the survey.My deepest gratitude goes to all of the individual dealers who

48、 took the time to support this research by completing the surveys.I am also very grateful to all those dealers who shared their valuable insights on the art market through interviews and discussions during the year.Many thanks also to all of the top and second-tier auction houses that also took part

49、 in the auction survey.Thanks especially to Susan Miller(Christies),Joshua Charlton-Briggs(Sothebys),Caroline Conegliano(Phillips),and Eric Bradley(Heritage Auctions).Thanks also to the online companies for their support of the survey and in providing other information on the sector,and to Thomas Ga

50、lbraith for his insights for the online chapter.I am very grateful also to ONeal Rowe(I)for the use of their online auction data,as well as Richard Lewis(the-)for data supplied on the UK.I would also like to thank UBS for their help and cooperation with the survey of US HNWIs,which provided invaluab

51、le insights in the report.Chapter 3 reports on the auction sector,looking again at sales by region and value segment.It also presents a comprehensive analysis of the principal fine art auction sectors,describing their performance in terms of sales,regional market share,prices,segmentation and artist

52、s.Chapter 4 provides an overview of exhibitions and art fairs.It analyzes the geographical spread,growth and content of commercial and non-commercial exhibitions over the last ten years,and examines the development of art fairs,charting their rising importance for sales in the dealer sector.Chapter

53、5 looks at sales and developments in the online art market,reporting on its size and key structural features.Chapter 6 provides a contextual overview of world wealth,showing how changes in the size and distribution of wealth within and between regions are shaping trends in the art market.This chapte

54、r focuses on high net worth wealth and presents the results of a survey of US high net worth individuals carried out for the report in conjunction with UBS.Chapter 7 discusses the significant economic contribution the art market makes to the economies in which it operates in terms of employment and

55、revenues as well the support of a range of ancillary industries.It concludes the report by reviewing some of the key issues that may shape the market going forward in 2018.I am grateful also to Diana Wierbicki of Withersworldwide for her help with information on US tax regulations.The primary fine a

56、rt auction data supplier for this report was Auction Club,and many thanks to William Vanmoerkerke and Sofie Scheerlinck for their help in assembling this set of data.The auction data on China is supplied by AMMA(Art Market Monitor of Artron)and my sincerest thanks for their continued support of this

57、 research on the Chinese auction market and to Yuting Zhang for his help with the data.I am very grateful also to the Shanghai Culture and Research Institute for their help researching the Chinese art market.I would also like to extend a special thank you to Susanne Massmann and her team at A for th

58、eir support and provision of data on exhibitions,fairs and galleries.Many thanks also to all of the art fairs that shared information for the report.Finally,I am very grateful to Noah Horowitz and Melissa Netecke for their time and encouragement in helping to coordinate the research.Dr Clare McAndre

59、w Arts Economics10Statement by UBS13 Directors Foreword&Statement Directors Foreword12This second edition of the Art Basel and UBS Global Art Market Report appears in the midst of what many consider a paradigm shift within the industry.So now,more than ever,understanding the markets dynamics is esse

60、ntial.Fortunately,the reports author,Dr Clare McAndrew of Arts Economics,has long ranked among the most definitive analysts of this industry.Since she joined forces with Art Basel in 2016,she has worked with us to focus upon the market aspects most fundamental to the ecosystem within which Art Basel

61、 exists.Thus,this years report includes its first-ever stand-alone chapter on exhibitions and art fairs(Chapter 4),alongside in-depth research on dealers,auctions,online developments,global wealth dynamics and the industrys economic impact.Compared with the many markets where every transaction is pu

62、blic record,the art market has long posed a thorny challenge for analysts.This is precisely why the Art Market Report,which combines global auction sales data with its industry-leading dealer surveys,proves so valuable.While true transparency is inherently unattainable,the fundamental image put forw

63、ard here rings profoundly true:The marketplace is growing ever larger,more accessible,The 19th-century artist,businessman and political philosopher William Morris wrote that people should live by a golden rule.“Have nothing in your houses that you do not know to be useful,or believe to be beautiful.

64、”This rule seems to divide economics and art.Economics is about the useful.Art is about the beautiful.That division does not exist.Economists are more and more vocal about the need to think beyond economic data to measure the quality of life.Morriss quote continues:“Beauty,which is what is meant by

65、art is a positive necessity of life.”Art contributes positively to the world around us,in ways that the facts and figures of GDP cannot hope to discover.The motivations and philosophy of the art world have much to contribute to the economic world.Passion drives art,and passion is an increasingly val

66、uable property in economics.Art frequently challenges established ways of thinking.The world hovers on the brink of the fourth industrial revolution.This will challenge established ways of doing business even the established ways of structuring economics.Challenge is a key part of economic success i

67、n a time of change.and more global;and yet while all three adjectives suggest countless opportunities,they also present a complex set of challenges,especially within an industry that has innovated and evolved more slowly than most other industries.During the past year,as this report was compiled,the

68、re has been an unprecedented questioning,both public and private,of the conventional gallery model and established ways of doing business.As every individual in the market questions their assumptions trying to envision professional trajectories that work for them and the artists they cherish we hope

69、 this analysis provides fresh perspectives on the myriad ways forward.This is an enormous undertaking,and Art Basel wishes to thank Dr Clare McAndrew for her tenacity and rigor in taking on this intricate task,UBS for its vital support in co-producing the report with us,and the hundreds of galleries

70、 and art-market professionals whose input helped shape this fascinating and thorough study.Marc Spiegler Director,Art BaselEconomics also plays a role in the world of art,as it always has done.In this report,Dr Clare McAndrew clearly sets out the context for the art market in todays global economy.A

71、rt is a growing industry,with a need to attract a broad base of new buyers at different price levels.There are opportunities presented through future growth in the online art market.The technological change that is changing the economy is also changing the world of art.Although there often seems to

72、be a focus on dollars per painting,UBS clients who invest in art are not typically looking for financial gain.Art is often a physical manifestation of the values that they wish to pass to future generations.Art has much to teach economists,and amidst record-breaking auction results in 2017,economics

73、 also has something to say on art.The two disciplines can work together,each benefiting the other.I hope that,whichever side you start from,you will find this report both useful and beautiful.Paul Donovan Chief Economist,Global Wealth Management,UBS15 Key FindingsKey Findings1.Sales in the global ar

74、t market reached$63.7 billion in 2017,up 12%from 2016.2.The volume of sales(number of transactions)grew more moderately than values,at 8%year-on-year.3.In 2017,aggregate sales by dealers accounted for a larger share of the market,at 53%by value,with auction sales accounting for 47%(up 4%from 2016).4

75、.The three largest markets of the US,China and the UK accounted for 83%of total global sales by value.5.The US was the largest market worldwide,accounting for 42%of sales by value,with China in second place(21%)and the UK the third largest market with 20%.6.Sales in the major art markets all advance

76、d year-on-year in 2017:in the US by 16%to$26.6 billion;in China by 14%to$13.2 billion;and in the UK by 8%to$12.9 billion.Global1617 Key Findings1.Sales at public auction of fine and decorative art and antiques reached$28.5 billion in 2017,up 27%year-on-year.2.The US and China dominated auction sales

77、 with a combined 68%share(the US with 35%of sales,China 33%,and the UK 16%).3.From 2007 to 2017,nearly all segments up to$1 million declined in value,whereas the market for works priced over$1 million grew.The biggest increases were at the very highest end,with the value of sales of works sold for o

78、ver$10 million increasing by 148%over ten years,and 125%year-on-year in 2017.4.Post War and Contemporary art was the largest sector by value in 2017,accounting for 46%,followed by Modern art(27%).5.All of the fine art sectors increased in value year-on-year,including a 12%increase in the Post War an

79、d Contemporary sector to$6.2 billion,with sales of the work of living artists advancing by 19%to$2.6 billion.6.Sales in the European Old Masters sector rose 64%year-on-year to$977 million,however,this uplift was due to the sale of the Leonardo da Vinci painting for$450 million at Christies in the US

80、,without which sales would have fallen 11%.Auctions1.Dealer sales in 2017 reached an estimated$33.7 billion,up 4%year-on-year.2.Dealers with turnover below$500,000 saw a decline in sales on average of 4%,the second year of losses in this segment.3.For dealers at the very highest end(sales over$50 mi

81、llion),sales growth was strongest at 10%,although this was only around half the growth rate reported for this segment in 2016.4.The number of gallery closures has varied considerably,peaking in 2009 and falling in recent years.Gallery openings have declined steadily over the last decade,with the num

82、ber of new galleries established in 2017 around 87%less than in 2007.5.While the ratio of gallery openings to closures in 2007 was 5:1,this has declined rapidly since then,dropping to 0.9:1 in 2017,that is,more closures than openings.6.According to the dealer survey,the three biggest issues facing d

83、ealers in 2018 are:finding new buyers;the economy/demand for art and antiques;and participation at fairs.Dealers1819 Key Findings1.The global online art and antiques market was estimated to have reached a new high of$5.4 billion in 2017,up 10%year-on-year and accounting for 8%of the value of global

84、sales.2.The online art market has increased substantially in size over the last five years(by 72%),and its share of total art market sales has also edged up from 5%in 2013.3.Online sales have been a key method to access new buyers:dealers reported that 45%of their online buyers were new to their bus

85、inesses in 2017;41%of those buying online at second-tier auction houses were new buyers;and in top-tier houses they averaged over 40%.4.Most of the traditional offline dealers and auction houses surveyed in 2017 recognized the online channel as a key area of growth over the next five years.Online1.T

86、he gallery was the primary institution for exhibitions worldwide in 2017,accounting for 55%of the number of global exhibitions.2.Exhibitions are much more globally dispersed than sales in the art market.The US accounted for a 21%share,followed by Germany(12%)and France(10%).3.Dealers reported that t

87、hey made 46%of their sales at art fairs in 2017,up 5%on 2016.4.Sales at fairs were estimated to have reached close to$15.5 billion in 2017,up 17%year-on-year,while the costs for dealers to attend fairs rose 15%to$4.6 billion.5.On average,dealers attended five fairs in 2017,the same number as in 2016

88、.Exhibitions and Art Fairs2021 Key Findings1.There were approximately 310,685 businesses operating in the global art,antiques and collectibles market in 2017,comprising 296,540 in the gallery sector and 14,145 auction houses.2.The art market directly employed an estimated 3 million people in 2017,st

89、able from 2016.3.It is calculated that the global art trade spent$19.6 billion on a range of external support services directly linked to their businesses,supporting a further 363,655 jobs.4.The largest area of spending,although only incurred by dealers,was on art fairs,which represented 23%of the t

90、otal at$4.6 billion,an advance of 15%year-on-year.The second largest area of spending was on advertising and marketing,which totaled$2.8 billion.Economic Impact1.A survey of(high net worth individuals)HNWIs in the US by UBS and Arts Economics in 2017 revealed that 35%were active in the art and colle

91、ctibles market.2.The survey indicated that the most common price range for buying works was less than$5,000(79%of respondents),and 93%reported that they most often bought at prices less than$50,000.Only 1%of respondents bought at prices in excess of$1 million.3.The most frequently used channel for p

92、urchases was a gallery or dealer,with 66%of the sample having used them to purchase art.4.11%of respondents had used credit or loans to purchase works of art or objects in their collections.5.Only 32%of collectors felt that the expected financial return on their investment was important,although thi

93、s was higher(at 47%)for those with wealth over$5 million.The majority of the collectors surveyed(86%)reported that they had never sold a work from their collection.6.Sales to private collectors dominated the dealer and auction sectors,accounting for 66%of dealers sales in 2017 and 64%for second-tier

94、 auction houses.Wealth The Global Art Market in 201727 1|The Global Art Market in 2017Key Findings1.Sales in the global art market reached$63.7 billion in 2017,up 12%from 2016.2.The volume of sales(number of transactions)grew more moderately than values,at 8%year-on-year.3.In 2017,aggregate sales by

95、 dealers accounted for a larger share of the market,at 53%by value,with auction sales accounting for 47%(up 4%from 2016).4.The three largest markets of the US,China and the UK accounted for 83%of total global sales by value.5.The US was the largest market worldwide,accounting for 42%of sales by valu

96、e,with China in second place(21%)and the UK the third largest market with 20%.6.Sales in the major art markets all advanced year-on-year in 2017:in the US by 16%to$26.6 billion;in China by 14%to$13.2 billion;and in the UK by 8%to$12.9 billion.The Global Art Market in 20172829 1|The Global Art Market

97、 in 20171.1|Overview of Global SalesSales in the global art market reached$63.7 billion in 2017,up 12%from 2016.Following two years of declining sales,the market turned a corner with increasing sales in both the auction and dealer sector.These gains were driven by sales at the top end of the market,

98、capped by a historic record in the auction sector,with a work by Leonardo da Vinci achieving$450 million,more than four times any price previously achieved at auction.However,away from the premium price segment,overall market performance was mixed.The combination of a high-performing market at the t

99、op end with more sluggish growth in other segments,along with varying regional performance,has moderated the growth in sales over the last five years.After the dramatic contraction of 40%in the value of the market in the fallout of the global financial crisis between 2007 and 2009,the largest declin

100、e since the early 1990s,strong recovery in the US combined with a booming market in China boosted sales until 2011.The Chinese markets significant decline in 2012 brought a halt to that,to some extent,but from 2012 to 2014,US-led growth buoyed the market to$68.2 million,above the previous peak reach

101、ed in 2007,and doubling the markets size within a decade.Since that point,while the US maintained positive growth,sales in Europe and China have been weaker.All of the major markets declined in 2016,with sales declining in the auction sector with fewer top-end prices,although the dealer market was m

102、ore stable and posted modest gains.Slowing economic growth and widespread political uncertainty filtered down into the art market in 2016 and on aggregate,it lost 16%of its value from 2014 to 2016.In 2017,despite remaining political volatility in many regions,robust growth in global wealth,particula

103、rly at the high end,improved economic performance,accelerating financial market returns,stronger consumer confidence and increased supply led to a much more favorable environment for sales.The volume of sales(number of transactions)grew more moderately than values,at 8%year-on-year,indicating that i

104、ncreasing prices in some sectors also explain the advance in the value of the market.The number of transactions reached an estimated 39 million,the highest level since 2008.Following two years of declining sales,the market turned a corner and increased 12%year-on-year to$63.7 billion.Table 1.1|The G

105、lobal Art Market:Value and Volume of TransactionsYearValue($m)Volume(m)2007$65,87549.82008$62,02043.72009$39,51131.02010$57,02535.12011$64,55036.82012$56,69835.52013$63,28736.52014$68,23738.82015$63,75138.12016$56,94836.12017$63,73939.0Growth 2016201711.9%8.0%Growth 20072017-3.2%-21.7%Growth 2009201

106、761.3%25.8%Arts Economics(2018)3031 1|The Global Art Market in 2017Figure 1.1|Sales in the Global Art Market 20072017 Arts Economics(2018)Billion$40$60$70$20$80$0$10$30$502015$63.82017$63.72016$56.92014$68.22013$63.32012$56.72011$64.62010$57.02009$39.52008$62.0Figure 1.2|Growth in Sales in the Globa

107、l Art Market Arts Economics(2018)10%20%30%40%10%20%30%60%50%40%0%21%2006/076%2007/0836%2008/0944%2009/1013%2010/1112%2011/1212%2012/138%2013/147%2014/1511%2015/16VolumeValue12%2016/17As in all years,the breakdown between auction sales and dealer sales varied widely between countries and between the

108、different sectors of the market.In 2017,aggregate sales by dealers accounted for a larger share of the market,at 53%by value,with total auction sales accounting for 47%.This represented a decline in the share of the dealer sector of 4%year-on-year.As noted in previous years,the share often shifts mo

109、re towards auctions when the market is buoyant and there is an optimistic outlook for sales,with sellers enticed to the public auction market by its potential for greater than anticipated prices.While this appears to have been the case in 2017,it was also due to the small number of very high-value a

110、uction sales,which masked weaknesses evident in some segments of the auction market.A detailed analysis of the dealer sector is given in Chapter 2,while Chapter 3 examines the auction sector.2007$65.93435 1|The Global Art Market in 20171.2|Global Market ShareThe three largest markets of the US,China

111、 and the UK accounted for 83%of total sales by value.The US once again confirmed its position as the largest center for art sales,increasing its share by two percentage points to 42%of world sales by value.The US has been the leading market for every year in the last 20,bar one,when sales in China t

112、emporarily overtook it by a small margin in 2011.However,the USs lead has risen to more than 20%in recent years.The three largest markets of the US,China and the UK accounted for 83%of total sales by value.Figure 1.3|Global Art Market Share by Value in 20171 Arts Economics(2018)Italy 1%Spain 1%Rest

113、of World 6%Switzerland 2%Germany 2%France 7%UK 20%US 42%China 21%Figure 1.4|Global Market Share of the US,UK and China 20072017 Arts Economics(2018)80%60%20%40%100%OthersChina0%US200822%9%34%35%200928%18%23%31%201021%23%22%34%201118%30%22%29%201216%25%23%36%201323%24%20%33%201417%23%22%39%201517%19%

114、21%43%201619%20%21%40%201717%20%21%42%200726%9%27%38%UKThe ranks of second and third place have marginally fluctuated in recent years.After emerging from virtually nowhere(with less than 5%of global sales up to 2006),China overtook the UKs long-established second place in 2010.With Chinese sales emb

115、arking on an unprecedented boom and the British market recovering from the fallout of the global financial crisis,China maintained dominance until 2014.In 2015 and 2016,the UK regained some share and moved up in the global ranks again,however,a strong year of sales in China in 2017 and a weak Pound

116、meant that in 2017 China was once again in second position by a small margin.While sales in China are by far the largest in Asia by value,combined with others such as Japan,South Korea,India and Indonesia,the Asian market accounted for 23%of global sales in 2017.Although this is still significantly

117、less than the EU,at 33%,the buoyant wealth dynamics in Asia and strong local markets suggest that its share could increase in the future.In contrast,despite having dynamic and vibrant local art scenes and significant international buyers at the high end,regions such as South America and Africa remai

118、n a tiny fraction of global values(estimated at a combined share of less than 4%in 2017).1 Note that the percentages that are cited in this chart and in several throughout the report are rounded to the nearest whole number.Shares may not add up to 100%due to rounding.3637 1|The Global Art Market in

119、20171.3|Regional SalesHaving led the recovery of the global market in 2010,the US art market grew in nearly every year until 2015,when it reached its highest ever level of$27.3 billion.The US market doubled in size in the period between its lowest point in 2009 and 2015,buoyed by strong sales in the

120、 Contemporary and Modern sectors.However,in 2016 sales dropped substantially(to$22.9 billion)against the background of an uncertain political climate,with limited supply and other factors leading to cautious buying and selling.This led to double-digit declines in the fine art auction sector.The US r

121、egained this lost ground in 2017,reaching$26.6 billion,an increase of 16%year-on-year,with strong sales at the high end of the auction and dealer sectors.The auction sector was affected by a small number of individual lots at the very high end,including two record,nine-figure sales of works by Jean-

122、Michel Basquiat and Leonardo da Vinci(see Chapter 4).In the dealer sector,while a generally more stable economy and positive wealth dynamics helped to improve buying in certain areas,performance was mixed.Some dealers reported that after a relatively slow start to the year,much of their increase in

123、sales in 2017 was caused by a flurry of activity at the very end of the year.This appears to have been driven by concerns in the US regarding the cessation of the The US Art Market:Effects of Termination of 1031 Like-Kind Exchanges2Historically,1031 Like-Kind Exchanges(LKEs)have been a tax-efficient

124、 method for investors to trade one investment for another investment(or investments)sufficiently similar in kind,deferring the realization of any gains on the disposition of the first asset.LKEs reflected a policy decision to maintain and stimulate the market for certain classes of assets,because by

125、 enabling investors to make tax-free exchanges within a particular asset market they would be more likely to continue to participate in that particular market.Upon an exit from that asset market,capital gains tax would be due on the accumulated investment gain arising since the investors initial cap

126、ital investment.Art investments qualified as property that could be used as part of LKEs.This encouraged art investors to maintain their initial capital investment in the art market,and simultaneously enabled them to diversify their investment by trading one highly appreciated work for multiple work

127、s,tax-free.The Tax Cuts and Jobs Act of 2017 narrowed the definition of qualifying“property”for LKEs to “real property.”As a result,after December 31,2017,availability of 1031 Like-Kind Exchanges for art.This regulation was used by collectors to defer capital gains taxes on the sale of art if the pr

128、oceeds were used to fund a purchase of another artwork,creating substantial buying and selling activity,particularly at the high end of the market.The announcement in late 2017 of the restriction of this incentive to exclude art from December 31,2017,as part of the Trump administrations tax reform,l

129、ed to an increase in activity at the end of the year as many attempted to avail themselves of the tax relief while they could.While some of the other proposals from the current US administration are thought to benefit the art market through boosting the wealth of the upper-income segments in the US,

130、many dealers felt that the role of these exchanges had been significant in recent years,particularly in large-scale transactions,and subsequently their removal in 2018 could negatively affect sales.artwork no longer qualifies for such exchanges.The Act included a transition rule,which generally appl

131、ies to exchanges initiated before the end of 2017.A number of art investors considered structuring last-minute exchanges before the change in law took effect,which could have been a contributing factor to the increase in art market activity in late 2017.The elimination of this tax deferral mechanism

132、 may result in some depression of activity in the art market,as investors will find it more expensive to sell art,and taxes owed on the sale proceeds will deplete the amount of cash available to be reinvested in the art market.Where an investor previously could reinvest 100%of the fair market value

133、of a relinquished work pre-tax,the same investor now will owe capital gains tax on the gain from that sale at the maximum federal capital gains rate of 28%,plus a 3.8%investment tax,as well as any applicable state income tax,and will have only those after-tax proceeds to reinvest.Therefore,without L

134、KEs,investors selling an artwork that has appreciated in value will no longer have a federal tax incentive to keep the sales proceeds invested in art as opposed to any other asset class.2 Information on Like-Kind Exchanges provided by Diana Wierbicki,Global Head of Art Law,Withersworldwide.The US co

135、nfirmed its position as the largest center for art sales,with a 42%share by value.3839 1|The Global Art Market in 2017The Chinese art market also experienced a substantial increase in sales,driven by the dominant auction sector,which still accounted for close to 70%of the value of the market in 2017

136、.While the gallery and dealer sector remained stable,a substantial increase in auction sales boosted growth in China with transaction values reaching$13.2 billion.The Chinese market has seen dramatic changes in size over the last decade.After an extraordinary boom in sales from 2009 to 2011 when oth

137、er markets were struggling to recover from the fallout from the global financial crisis,China rose to the top of the global art market rankings in 2011 with sales of$19.5 billion.This boom ended abruptly in 2012,with a sharp The Chinese art market experienced a substantial increase in sales of 14%to

138、$13.2 billion,driven by the dominant auction sector.Figure 1.5|Sales in the Major Art Markets 20072017 Arts Economics(2018)Billion$10$20$30$35$0200820092010201120122013201420152017EUUSUKFranceChina$5$15$252016contraction in sales of 30%,followed by stagnant and declining sales up to 2016.However,the

139、 market rebounded in 2017 with an increase of 14%year-on-year.While the auction sector led this increase in sales,the dealer sector may have a greater impact in the future.While the pace of growth in new local galleries in Mainland China has been relatively slow over the last three years,several exi

140、sting high-end galleries have recently launched new premises there and in Hong Kong.David Zwirner opened a gallery space in January 2018 in Hong Kongs new H Queens develop-ment,which has 11 floors purpose-built for galleries.Hauser&Wirth is also opening in the building in March,having already nomina

141、ted representatives in Hong Kong and China in 2016 and 2017.Other new tenants include Pace,Tang Contemporary Art,Pearl Lam Galleries and Seoul Auctions.The UK slipped back to third place in the global ranks in 2017 despite a relatively strong year of sales.The UK market peaked in 2007,reaching nearl

142、y$21 billion in sales and a record share of 33%of the global market,just 2%less than the US.However,after a drop of 57%in value in 2009,despite an initially strong recovery,the UK failed to match the pace of the US and the margin between these two top markets widened.After two years of declining sal

143、es in 2015 and 2016,sales in the UK grew in 2017,reaching a total of$12.9 billion.This represented an increase in value of 8%year-on-year in US dollar terms but underestimates the performance of the market to some degree due to the deterioration of the British pound over the period.While some in the

144、 UK market reported that the weak Pound helped to encourage international sales during the year,its fall of 5%in value against the dollar depressed the measurement of its annual change in performance in dollar terms.Overall,since its low point in 2009,sales in the UK have advanced by 45%,more than t

145、wice the rate of the EU as a whole,but significantly less than the US(which has seen a 120%increase),or China(advancing 83%).20074041 1|The Global Art Market in 2017In the rest of Europe,although performance was mixed,most of the larger markets also saw an uplift in sales.France,the fourth largest m

146、arket worldwide,saw an increase in sales of 9%to reach$4.1 billion,driven by advancing auction sales and a stable dealer sector.Several other countries also experienced increases in sales including Germany,Switzerland and Italy.Sales in the EU as a whole increased by 7%year-on-year to$20.9 billion,a

147、ccounting for 33%of the global art market.Within the EU,the hierarchy of sales was stable,with the UK remaining the largest market by a considerable margin with a share of 62%by value.France was in second place with its share up two percentage points year-on-year to 22%,while Germany was stable in t

148、hird place at 5%.Since the low point of the market in 2009,the performance of the EU as a whole has significantly lagged behind other regions.While sales within the EU have grown by 22%since 2009,much of this has been driven by the UK.Measured without the UK,EU sales have declined by 2%over this per

149、iod.With the exit of the UK from the EU planned for March 2019,there is much uncertainty,particularly with regard to the terms of trade between the UK and other EU member states,which could affect many art businesses in the future.However,given that the UK art market is dominated by extra-EU trade,t

150、his may have less effect on the value of UK sales.Official figures from the HM Revenue and Customs(HMRC)suggest that the bulk of the trade both into and out of the UK by value is with countries outside the EU,with just 16%of imports into the UK coming from within the EU,and just under 3%of exports d

151、estined for countries within the Single Market.Nevertheless,it is worth bearing in mind that HMRC statistics understate the extent of intra-EU trade,because many EU sales under the VAT margin scheme are not necessarily recorded.Research carried out in the auction sector in 2017 showed that while the

152、 US was the most important trading partner for the UK,consignments from EU member states accounted for up to 25%of their UK sales on average,while up to 20%of their exports were destined for EU buyers.In the dealer sector also,the main dealer associations in the UK reported that on average between 1

153、0%and 22%of dealers purchases for subsequent sale were made in the EU,and EU buyers accounted for 15%to 20%of their sales.This implies that the terms of trade agreed to in the Brexit deal for the art market could have a significant effect on the sales for a number of businesses in the UK,as well as

154、those in Europe that rely on supply (and sales)from the UK.3The most obvious effect of Brexit will be the reduction in the size of the EU market,which without the UK would have accounted for just 13%of the global art trade in 2017.Sales within the EU have grown by 22%since 2009,however,measured with

155、out the UK,they have declined by 2%.3 Research conducted by Arts Economics for the British Art Market Federation(BAMF)in 2017.See Arts Economics,The British Art Market 2017.BAMF:London.(See http:/tbamf.org.uk/publications/bamf-publications)Figure 1.6|EU Art Market Share by Value in 2017 Arts Economi

156、cs(2018)Sweden 1%Rest of EU 4%Austria 2%Italy 2%Spain 2%Germany 5%UK 62%France 22%4243 1|The Global Art Market in 2016 Dealer Sales and Exhibitions45 2|Dealer Sales and ExhibitionsKey Findings1.Dealer sales in 2017 reached an estimated$33.7 billion,up 4%year-on-year.2.Dealers with turnover below$500

157、,000 saw a decline in sales on average of 4%,the second year of losses in this segment.3.For dealers at the very highest end(sales over$50 million),sales growth was strongest at 10%,although this was only around half the growth rate reported for this segment in 2016.4.The number of gallery closures

158、has varied considerably,peaking in 2009 and falling in recent years.Gallery openings have declined steadily over the last decade,with the number of new galleries established in 2017 around 87%less than in 2007.5.While the ratio of gallery openings to closures in 2007 was in the region of over 5:1,th

159、is has declined rapidly since then,dropping to 0.9:1 in 2017,that is,more closures than openings.6.According to the dealer survey,the three biggest issues facing dealers in 2018 are:finding new buyers;the economy/demand for art and antiques;and participation at fairs.Dealer Sales and Exhibitions4647

160、 2|Dealer Sales and Exhibitions2.1|Dealer Sales in 2017Dealer sales in 2017 reached an estimated$33.7 billion,up 4%year-on-year.The sector consisted of an estimated 296,540 businesses in 2017(over 90%of the businesses involved directly in buying and selling fine art,decorative art and antiques world

161、wide,including auction houses,galleries and dealers).4 However,less than 5%of those businesses generate the majority of total dealer sales by value.The ratio of dealer versus auction sales has wavered around 50:50 at a global level for the last decade,and,as noted in Chapter 1,the auction sector has

162、 tended to account for a greater share of sales in more buoyant markets.The ratio also varies considerably between countries and sectors.In some emerging markets,the share of dealer sales has been as low as 10%whereas in some mature markets it has reached over 60%.As noted in Chapter 1,the share by

163、value of dealer sales declined four percentage points to 53%in 2017,as strong auction sales outpaced more moderate growth in this sector.Information on the global dealer sector of the art market is complex to compile,as unlike the auction sector,there is no public source of data.As in other industri

164、es where private sales and smaller firms dominate,to overcome the lack of publicly available information,surveys are a critical element of researching the market.In 2017,Arts Economics conducted its annual global survey of around 6,500 dealers from the US,Europe,Asia,Australia,Africa and Latin Ameri

165、ca,directly and with the proactive support of the major dealers associations.The survey had a response rate of 14%and presented many useful insights.5 This was supplemented with dealer interviews across different market sectors and secondary sources of information.Although the survey covered dealers

166、 across a range of turnover levels,as in 2016,respondents tended to be concentrated in two value segments:smaller dealers with turnover levels below$500,000 and larger dealers with sales between$1 million and$10 million.Only 10%of respondents had sales over$10 million(consistent with the last two ye

167、ars),and just 1%reported sales in excess of$50 million.Based on the survey data,the median turnover for dealers in 2017 rose by 20%from$875,000 to just over$1 million.While sales across all dealers increased by 4%year-on-year,there were considerable differences in the performance of different segmen

168、ts Dealer sales in 2017 reached an estimated$33.7 billion,up 4%year-on-year.4 This estimate of the number of businesses includes galleries and shops selling fine art,decorative art,antiques and related collectibles,as well as private dealers and sole traders selling within these categories in 2017.F

169、igures are recorded per business outlet rather than by company.See the Appendix for more information on the sources of data used in the report.5 The average response rates for external online surveys across all sectors is generally around 10%to 15%.of the market.Overall,although the magnitude of the

170、 year-on-year changes varied widely,there were more gainers than losers in terms of annual sales,with 59%of respondents reporting positive growth,13%reporting that sales were stable,and 28%indicating a decline in sales.The survey covered dealers in a broad range of sectors,including Contemporary art

171、,Modern,Impressionist,Old Masters,antiques,decorative arts and design.However,the majority of respondents sold Contemporary art,either solely or in combination with another sector.When aggregated into broad sectors as in Figure 2.2,most saw an uplift in average sales year-on-year,but these totals we

172、re strongly influenced by the performance of certain value segments,and some of the biggest increases across all sectors were at the higher end of the market.Some of the poorest growth in sales year-on-year was for dealers with turnovers of under$1 million.Those dealers with sales below$500,000 saw

173、a decline on average of 4%,the second year of losses in this segment,with dealers at the lowest end(with sales below$250,000)faring slightly worse,with a 5%decline.Sales for dealers with turnover between$500,000 and$1 million were also stagnant from 2016.In contrast,aggregate sales for dealers with

174、turnover between$1 million and$10 million experienced a Figure 2.1|Share of Surveyed Dealers by Total Sales in 2017 Arts Economics(2018)Up to$500k 34%$500k$1m 15%$1m$10m 40%$10m$50m 9%Over$50m 1%4849 2|Dealer Sales and Exhibitionsa second year of decline in the segment.However,performance was mixed,

175、with more dealers seeing sales rise(43%)than fall(36%).For dealers at the very highest end(sales over$50 million),sales growth was strong at 10%,although this was only around half the growth rate reported for this segment in 2016.These results are based on a relatively small number of respondents re

176、lative to other segments,second year of growth,increasing by 9%.The majority(66%)of businesses in this segment posted increases,with a further 12%maintaining stable performance year-on-year.Many dealers in this segment described 2017 as a year in which they had greater rewards than in 2016,but had t

177、o work much harder to attain them.Dealers with turnover between$10 million and$50 million experienced a fall in aggregate sales of 3%,indicative of the small number of dealers active in the market overall in this category.They do,however,also resonate with some of the anecdotal evidence from intervi

178、ews with high-end dealers who reported a strong year of sales,with very highly priced multi-million dollar works being purchased by collectors.Looking ahead,the outlook for the majority of dealers on aggregate was optimistic:58%expected higher sales values in 2018;just over one-third thought they wo

179、uld be stable;only 6%predicted a decline.Dealers with turnover between$10 million and$50 million expressed less optimism,with just under half(47%)predicting higher sales and 23%predicting a decline.The most bullish about the coming year were those with turnover in excess of$50 million,with all respo

180、ndents predicting that their sales would increase.Optimism was also high in most sectors,with a very small share(6%or less)of Contemporary and Modern dealers predicting a fall in sales in 2018,and a minority also in the other older fine art sectors and decorative arts.Between regions,dealers from Eu

181、rope were the most pessimistic,with half of all dealers predicting sales would stay the same or decline in 2018,and a majority(59%)estimating a decrease over the next five years.Figure 2.2|Average Sales by Sector 2016 and 2017 Arts Economics(2018)$6$4$5$3$2$1$0.7$0.8Antiques and decorative art$3.9$4

182、.1Contemporary$4.7$5.2Modern$3.0$3.7Other fine art6$0201620176 Other fine art refers to dealers of Impressionist works,Old Masters,19th Century and other pre-Modern works.Figure 2.3|Change in Turnover by Dealer Segment 20162017 Arts Economics(2018)4%8%4%8%10%Up to$250k$250k$500k$500k$1m$1m$10m$10m$5

183、0mOver$50m12%12%4%5%1%0%9%3%Million$5051 2|Dealer Sales and ExhibitionsFigure 2.4|Dealers Views on Sales in the Future Arts Economics(2018)70%60%50%40%30%20%10%0%Decrease3%1%Significantly decrease3%5%Significantly increase59%7%51%7%Increase28%35%Stay about the same2018Next five yearsDealers were gen

184、erally optimistic about sales over the next five years,with an even higher majority of 66%predicting an increase,and only 6%predicting a decline.When asked about their particular sector over the next five years,42%thought it would stay stable,with 9%predicting a decline.The most optimism was in the

185、Contemporary market,while the majority of those in the older sectors of the fine art market predicted no significant change.Nearly 20%of the dealers in the antiques and decorative art sectors had a negative five-year outlook,the highest share of those surveyed.US dealers were the most optimistic abo

186、ut sales in their region over the next five years,with 65%predicting increasing sales and none expecting them to decline.Similarly in China,none of the dealers responding to the survey thought sales in China would decline in the near future,although the majority(64%)predicted they would remain at th

187、eir current level.While the mid-sized and smaller markets in Europe were generally optimistic about sales in their national markets,there was greater pessimism in some of the larger markets,with declining sales over the next five years predicted by 25%of German dealers,23%of those in the UK and 22%i

188、n France.In Brazil,23%of dealers expected sales to fall,contrary to predictions from other markets in Latin America,which were all expecting positive or stable growth.Dealers were generally optimistic about sales over the next five years,with 66%predicting an increase.5253 2|Dealer Sales and Exhibit

189、ions Arts Economics(2018)DecreaseSameIncrease0%20%40%60%80%100%ChinaOther Latin AmericaUKFranceGermanyOther EuropeBrazilb.By Selected RegionsUS64%36%25%75%23%38%38%23%38%38%22%33%44%25%38%38%58%40%35%65%An analysis of the volume of sales showed that the average number of works sold by dealers was re

190、latively stable year-on-year for these businesses at 118.As in the auction sector,average volumes are often skewed by some decorative art and antique dealers,who tend to sell a high volume of less valuable items.Even in the fine art market,there are a number of top-end dealers who drive sales in the

191、 higher price brackets(in excess of$1 million)but also carry out large volumes of transactions in lower price segments.These volumes can fluctuate significantly between sales without any significant change in the performance of an individual business.The median number of works sold in 2017 was there

192、fore more representative at 90,an increase of 12%from 2016.The median number of works sold by dealers in the antiques and decorative art sectors fell by 14%,and there was a slight decline(of 2%)for those in the Contemporary market.In the older segments of the fine art market the median volume of wor

193、ks sold was stable and in the Modern art sector it rose by 3%.Figure 2.5|Dealers Views on Sales Over the Next Five Years Arts Economics(2018)DecreaseSameIncrease0%20%40%60%80%100%44%50%6%Modern60%40%Other fine art19%38%44%Antiques and decorative arta.By SegmentContemporary9%42%49%The median number o

194、f works sold in 2017 was 90,an increase of 12%from 2016.3%57 2|Dealer Sales and Exhibitions562.2|Market Prices and SegmentationThe highest average prices in 2017 were reported by dealers in the Modern art sector and the lowest in decorative art and antiques.Prices varied by region also,with the high

195、est in the US and some of the lowest in Europe.Although businesses did not supply data on every individual transaction carried out during the year,Figure 2.6 shows the median of the distribution of average prices for all respondents,based on their reported sales values and volumes.This shows that th

196、e highest median prices were also in the Modern sector and lowest in older sectors of the market.Figure 2.7 sets out the share of the total number of individual sales and the value of sales by dealers in different price segments.7 Although the data is less skewed than the auction data presented in C

197、hapter 3,the chart shows that while the majority(74%)of individual transactions in the dealer sector were for prices below$50,000,they represent a much smaller share of the value of sales(30%).7 Reported shares by price segment are applied to the total sales value and volume reported by each dealer

198、and then aggregated to get the share across all dealers.This differs from the average share published in 2016.Figure 2.6|Median Prices by Sector in 2017 Arts Economics(2018)$60,000$50,000$30,000$20,000$10,000$0$40,000$50,070$12,500$8,095$7,750$11,270ModernOther fine artAll dealersAntiques and decora

199、tive artContemporary0%Figure 2.7|Share of Total Dealer Sales by Price Bracket in 2017 Arts Economics(2018)50%40%20%15%10%5%45%35%30%25%11%1%Less then$1,00043%24%20%5%$1,001$5,00019%22%5%30%2%18%Over$1m VolumeValue$5,001$50,000$50,001$250,000$250,001$1mJust under half(48%)of the value of the dealer s

200、ector was accounted for by a 7%share of individual transactions priced at over$250,000.It also shows the importance of the middle market for dealers(works priced between$5,000 and$250,000),which accounted for 62%of all individual transactions in the sector.At the higher end,just under half(48%)of th

201、e value of the sector was accounted for by a 7%share of individual transactions priced at over$250,000.It is interesting to note that the segment of the market accounted for by works priced at over$1 million fell 6%year-on-year(from 24%in 2016 to 18%in 2017),while the share in the segment between$25

202、0,000 and$1 million grew by 9%.This fits to some extent with anecdotal evidence from dealers who noted that buyers were increasingly willing to spend five-and six-figure sums on“mid-level well known artists”rather than only focusing on a very small number of works at the top end of the market,as has

203、 been the case in recent years.Many felt this was a healthy development in the market.Others noted that some of the changes in their price brackets(and turnovers)were simply based on changing gallery programs,with renewed interest in resurrecting the careers of artists whose markets had been less ac

204、tive in recent years or pursuing a more diverse program by gender and race,which meant an increased level of sales just below the top tier.2.3|Dealer Margins and FinancingUnlike many other industries,a critical issue in the dealer sector is the difficulty faced accessing financing and credit.Accessi

205、ng credit can be a major problem for dealers throughout their business lifecycle,with periods of volatile cash flows alongside large capital outlays and running costs.This issue especially affects dealers who are just starting out,often proving an insurmountable barrier to entry,as well as hampering

206、 growth for established mid-level galleries trying to expand and develop their businesses.Because of a lack of trade financing and access to credit,the majority of dealers are self-financing and increasingly have to organize their businesses around selling on consignment rather than through the more

207、 traditional model of owned inventories.This model is the most widespread in the primary market.Yet a growing percentage of secondary market dealers are also now working on consignment,as the prices of the most sought-after works have rapidly increased and as it has become increasingly difficult for

208、 dealers bereft of trade financing to purchase works.These problems are exacerbated in all sectors by the tendency towards both a slow inventory cycle as well as an extended payment cycle.As was the case in previous years,the survey results indicated low levels of leverage in this sector.To assess t

209、he leverage used by dealers,respondents were asked to report their debt ratio in 2017.8 The majority of dealers(67%)had a debt ratio of 10%or less,a slightly higher share than in 2016 (at 63%).Only 5%had a ratio in excess of 50%.For purposes of comparison,in the US the current average rate of levera

210、ge(using book debt to equity measures)was 63%at the start of 2018,while some retail industries(such as car sales,building supplies and catering)had rates in excess of 70%.The average in general retail is around 46%and in specialized retail is 42%.9 Therefore,compared to these industry benchmarks,art

211、 and antique dealers have a relatively low level of debt.The low levels of debt are fairly consistent across different turnover levels.Whether dealers had turnover greater than or less than$1 million,a majority reported debt of below 10%and only 5%reported debt in excess of 50%.However,the levels of

212、 debt were highest at the extremes of the market:7%of dealers with turnover less than$500,000 and 17%of those with sales greater than$10 million reported that they held debt of over 50%(versus 2%or less in the other segments of the market).The prevalence of low leverage generally indicates stability

213、 and low financial risk.However,dealers reported that they have had little choice but to develop a low debt business model due to the lack of available credit.Higher levels of leverage at the top 59 2|Dealer Sales and Exhibitions588 Debt ratio in this instance measures a companys debt and liabilitie

214、s versus its assets(sales and stock),and it can be interpreted as the proportion of the companys assets that are financed by debt,or an indicator of their financial risk.9 2017 data courtesy of Aswath Damodaran,Stern School of Business at New York University.of the market indicate that dealers in th

215、is segment have better access to credit and lending to cover expansion,new programs and other major capital requirements.Across all dealers,21%rated access to credit and financing as among their top three challenges currently and over the next five years.Figure 2.8|Debt Ratios in the Dealer Sector i

216、n 2017 Arts Economics(2018)25%50%10%More than 75%2%0%10%67%50%75%3%10%25%18%As far as profitability was concerned,some dealers noted that,despite stable or even declining sales they had had a more profitable year.While there were varied reasons for this,some observed that it was a year in which thei

217、r focus had shifted to reducing costs and concentrating on returns:“Weve had to become more shrewd were doing seven shows a year not ten,and only focusing on fairs with solid returns.This year and going forward its going to be not what we spend and what we sell,but what we save.”However,other busine

218、sses reported that despite healthy sales,the escalating costs to access buyers and promote their businesses had eaten into margins.Dealers were asked to report on the profit margins of their businesses in 2017 via their gross profit ratio.10 Across all dealers,41%reported that their gross margins we

219、re 30%or less(stable from 2016).Just under half(47%)were between 30%and 50%,and 11%reported gross ratios of over 50%,up 3%in share from those reported at that level in 2016.Gross profit margins did not necessarily rise with increasing turnover in a systematic way,with considerable variation within s

220、egments,and dealers with the highest share(gross profit margins in excess of 50%)were those with sales of less than$500,000.In contrast,dealers with the lowest share of this highest profit level were those with turnover between$500,000 to$1 million.For comparison with other industries,at the end of

221、2017 in the US,the average gross profit margin in general retail was 35%,46%in consumer discretionary goods,41%in services and as high as 50%in financial services.11 Just under half(47%)of dealers were therefore roughly on par with these averages(having reported margins between 30%and 50%),although

222、41%reported lower ratios.Dealers were also to report their net profit ratios,which measure sales relative to all costs and expenses.12 On aggregate across all dealers,results were relatively stable from 2016.While 30%of respondents reported net profit margins of 10%or less,the majority(59%)recorded

223、profits of between 10%and 30%,with 11%having net margins above 30%.Again,net margins did not rise consistently with sales turnover,although the segment with the highest share of margins in excess of 30%was at the highest end(those with sales over$10 million)at 17%.61 2|Dealer Sales and Exhibitions60

224、10 For the purposes of this analysis,gross profit ratio is the ratio of sales to the cost of goods sold(also referred to as their margin on sales).The higher the percentage of gross profit,the more a company retains on each dollar of sales to service its other costs and debt obligations.Gross profit

225、 is therefore generally a measure of the profitability of sales rather than the overall profitability of the company(which is measured by its net profit).11 Q4 2017 data courtesy of CSI Markets.12 Net profit ratio measures sales relative to all costs and expenses.Net profit subtracts a companys oper

226、ating expenses and income tax from gross profit before dividing by net sales.This ratio more precisely defines how profitable individual companies and industries are by expressing their retained profit per dollar of sales.13 Q3 and Q4 2017 data courtesy of CSI Markets.The$10 million plus segment had

227、 the highest share of margins in excess of 30%at 17%.Figure 2.9|Dealers Gross Profit Ratios in 2017 Arts Economics(2018)50%60%5%Over 70%5%Under 20%22%20%30%19%30%40%17%60%70%2%40%50%30%There were some notable differences by sector.While the majority of dealers in each sector reported margins of betw

228、een 10%and 30%,dealers of antiques and decorative art accounted for the highest share with net profit above 30%,while Contemporary dealers showed the widest range,including the highest share(38%)in the lowest margin segment.This could be for a variety of reasons including the greater number of newer

229、 businesses in the Contemporary market versus other sectors,as well as high additional production costs and overheads in the segment that keep profit margins down.Again for comparison,net margins vary considerably in other industries but the average net profit margin in general retail in 2017 was ju

230、st under 5%,9%in consumer discretionary goods,11%in services and 13%in finance(with rates in excess of 25%for miscellaneous financial services and insurance).13 63 2|Dealer Sales and Exhibitions62Figure 2.10|Dealers Net Profit Ratios in 2017 Arts Economics(2018)10%20%0%10%Over 30%20%30%Less than$500

231、k$500k$1mOver$10m$1m$10m33%27%23%42%40%32%20%34%33%34%8%All dealers30%25%34%11%All dealers30%25%34%11%22%10%17%13%13%a.By Turnover LevelAntiques and decorative artContemporaryOther fine artModern17%38%6%20%35%26%18%50%20%38%60%26%6%30%9%b.By Sector2.4|Supply and Inventories Although changes in buyin

232、g demographics,wealth dynamics and other factors can all affect demand for art,the art market is highly supply driven,with the level of sales achieved each year in both the auction and dealer sector affected most by what comes on to the market at a given point in time.In the secondary market,dealers

233、 compete with each other,and with auction houses and other agents to secure vendors who allow them access to the best and most scarce works for sale.In the primary market,despite having the potential to renew supply,competition is often equally intense with regard to artists and their representation

234、.While scarcity drives prices up in secondary markets and many areas of the primary market,oversupply is also an issue in others.This includes some areas of the living artists market where there are arguably too many artists for the level of investment and support currently available(as evidenced by

235、 chronic unemployment and underemployment in the sector),and too many outlets with a lack of sufficient differentiation in supply.Accessing supply and inventories was cited as one of the top three challenges for their business in 2017 by 26%of respondents to the survey(and by 21%over the next five y

236、ears).How dealers access supply varies depending on their sector,but all face particular challenges.For those dealers operating in the Contemporary market,the most common method for accessing works for sale is through consignments from artists.On average,65%of their inventories came directly from ar

237、tists.For antiques and decorative art dealers,intra-trade sources were the main channel for supply,with other dealers and auctions accounting for 83%of their inventory.While auctions were the main source of supply for this segment in 2016(at 35%),supply from other dealers rose substantially in 2017

238、(from 19%to 55%).Private collectors were the most important source for other sectors of the fine art market,accounting for 36%of the value of Modern art dealers inventories,and over half of the inventories of fine art dealers in the other older fine art sectors.58%of sales in the dealer sector came

239、from work on consignment.As noted above,because of a lack of inventory financing,a growing share of sales in the dealer sector are based on consignments from artists or vendors,while sales from owned inventory have declined in recent years.In the sample of dealers surveyed,based on a weighted averag

240、e,respondents reported that in 2017:58%of their sales came from sales of works on consignment(up 2%from the average reported in 2016).26%was sales of inventory that they owned (down 4%).17%was sales on commission or as an agent (up 3%from the previous year).This varied between sectors.The most commo

241、n business model for dealers in the Contemporary sector was sales on consignment,stable from 2016.Sales of works from owned inventory were much higher for antiques and decorative art dealers at 53%,however this declined in share by 17%year-on-year as the share of sales made on commission almost doub

242、led.This could indicate increasing capital and financing constraints in this sector,resonating with qualitative information gathered from interviews.This was also true in the other older sectors of fine art,where commission sales grew by 29%in share with a concurrent drop in sales from inventory of

243、19%.While it can take a considerable time to sell works from inventory,another problem affecting cash flow is how long it takes for dealers to get paid.65 2|Dealer Sales and Exhibitions64Table 2.1|Sources of Supply for Dealers in 2017Private collectorsEstatesInstitutions or companiesOther dealersAuc

244、tionArtistsOther sourceAntiques and decorative art12%1%5%55%28%0%1%Contemporary16%4%3%5%5%65%2%Modern36%9%2%15%19%19%1%Other fine art sectors52%3%3%22%14%0%7%All Dealers20%5%3%11%10%50%2%Arts Economics(2018)Figure 2.11|Share of Sales by Inventory Basis and Sector in 2017 Arts Economics(2018)Commissi

245、on or agentOwned InventoryConsignment0%20%40%60%80%100%20%65%15%Modern53%7%40%Other fine art57%16%27%Antiques and decorative artContemporary31%53%15%67 2|Dealer Sales and Exhibitions66Figure 2.12|Average Time Taken to Sell Works from Dealers Inventory in 2016 and 2017 Arts Economics(2018)35%30%25%15

246、%20%10%5%20172016More than 2 yearsLess than 1 month13 months36 months612 months1218 months1824 months1%7%16%29%15%14%20%0%Table 2.2|Average Time Taken to Sell Works from Inventory in 2017(by Sector)Contemporary Non-Contemporary fine artAntiques and decorative art2017%change 20162017%change 20162017%

247、change 2016Up to 3 months8%1%5%-4%6%-5%36 months19%3%10%-6%6%-15%612 months32%6%35%16%18%-7%1218 months13%-9%10%4%18%7%1824 months10%-1%20%7%29%15%More than 2 years19%1%20%-15%24%6%Arts Economics(2018)Of those dealers making acquisitions into inventory for their businesses in 2017,the median value o

248、f total purchases made during the year was$145,000,down 28%year-on-year and a decrease of 38%in two years.(The average value of acquisitions was much higher at$1.6 million,with a smaller number of higher value inventories skewing the figure upwards).The share of inventory to sales(using average valu

249、es for both)was 32%,down 6%year-on-year.There was a wide range,however,from less than 1%to a small share of dealers in excess of 100%(5%of the sample bought more inventory than they sold during the year).Dealers were asked how long it took to sell a work from their inventory.The period of between si

250、x and 12 months had the most responses(29%),as it has had for the last two years.The second highest was also again those holding inventory for longer than two years(20%),showing the continuing issues of slow moving stock and low liquidity in some parts of the market,putting dealers under considerabl

251、e financial pressure,resulting in cash flow problems,exacerbated by limited access to financing.The share of those with very fast cycles of inventory has also steadily declined,with those selling works in less than one month dropping from 4%in 2015 to just 1%in 2017.An analysis of the broad market s

252、ectors shows that Contemporary dealers generally had the quickest cycle from inventory to sales,with an average of 59%selling works within a year,whereas those working in antiques and decorative art had the slowest(30%within a year).It is notable that in all sectors,there was a sizable share of deal

253、ers whose average inventory cycles were greater than a year,accounting for 40%of Contemporary dealers,half of the dealers in other older sectors of the fine art market,but by far the highest in the antiques and decorative art sectors at 71%.It is also evident that antiques and decorative art dealers

254、 cycles have become more protracted over time,with the share of those reporting lengthier cycles increasing in share year-on-year.While it can take a considerable time to sell works from inventory for some dealers,another potential problem affecting cash flow is how long it takes for dealers to get

255、paid after an item is purchased.The survey evidence showed signs of a slight improvement in the payment cycle in the sector on average,with a majority of dealers(62%)being paid within two months of a sale,while those with a cycle of longer than three months dropped 4%year-on-year to 16%.While part o

256、f the appeal of purchasing through a dealer may be some degree of flexibility on terms and payment periods,the existence of payment terms beyond 60 days,which was the average for at least 2%5%17%25%19%12%21%38%of dealers,indicates that dealers offer(or are forced to accept)terms that would be consid

257、ered beyond the normal scope of business in many other similar industries,which could put added pressure on smaller dealers.While dealers varied in the terms they accepted,there was a tendency to maintain a tighter cycle for those dealers with lower turnover,for example,70%of dealers with turnover l

258、ess than$500,000 were paid within 60 days,while this share was 50%for those with turnover greater than$10 million.Contemporary dealers were the most widespread in extending terms beyond 60 days:almost half(47%)of those surveyed did so,in contrast with just 24%of the dealers in antiques and decorativ

259、e art.69 2|Dealer Sales and Exhibitions68Figure 2.13|Average Payment Cycle for All Dealers in 2016 and 2017 Arts Economics(2018)35%30%25%15%20%10%5%20172016More than 6 monthsLess than 1 week1 week1 month12 months23 months36 months7%31%24%21%14%2%0%There were also considerable differences between reg

260、ions.The shortest payment cycles for dealers were in the larger Western markets,British dealers having one of the shortest on average,with 92%collecting in less than 60 days(including around 50%within 30 days).In China,which is known to have a high rate of late payment in the auction sector(see Chap

261、ter 3),the majority of dealers(56%)reported not being paid within 60 days,while Brazil had one of the worst payment cycles,with 86%reporting an average of greater than 60 days.These cycles to some extent represent the business culture of these countries.The average payment duration of consumer invoi

262、ces in Germany and the UK are the lowest in Europe,with invoices paid within 12 and 17 days respectively.Some of the lengthiest cycles are in Italy where the average extends to 37 days and in Spain to 47 days.Considering the business-to-business markets in different countries,where terms are general

263、ly longer and more flexible,only 33%of companies paid on time in China versus 54%in the US and 72%in Germany.1447%of Contemporary dealers extended payment terms beyond 60 days.14 B2B data comes from Dun&Bradstreet Payment Study 2016,while B2C data is from Intrum Justitia(2016)European Payment Report

264、.11%25%25%20%15%5%7071 2|Dealer Sales and ExhibitionsFigure 2.14|Payment Cycle for Dealers in Selected Countries in 2017 Arts Economics(2018)100%90%80%70%60%50%40%30%20%10%0%ItalyChinaBrazilFranceSpainGermanyUSUK92%8%70%30%67%33%59%41%58%42%57%43%44%56%14%86%Past 60 daysUp to 60 days2.5|Primary Vers

265、us Secondary Markets The art market is made up of the primary and secondary markets,with the latter dominating in terms of value and price levels.In the fine art market,dealers represent artists selling works for the first time to the market or resell their works on behalf of a vendor,an artist or f

266、rom their own inventory.Excluding decorative art and antique dealers(who do not represent individual artists),the remaining sample of dealers surveyed was made up of dealers working solely in the primary market,those working solely in the secondary market,and those working in both markets.Each segme

267、nt was asked a series of questions concerning the artists they represented in 2017.Primary Market Dealers The primary market is defined as the first sale of artists new work through dealers.Dealers work closely with their artists and promote and develop their careers over time.They establish prices

268、for the artists work,support its production,control the supply,and act as important gatekeepers,administrators and promoters,especially for artists that may not be well established.While there are many highly successful living artists with stable and high prices,looking at the primary market as whol

269、e,prices tend on average to be lower and more volatile as it is made up of artists at various stages of their careers,with works appearing on the market for the first time,before a consensus is established about the artist and the value of their work.The median level of sales is subsequently also lo

270、wer,which is borne out by the survey results.In 2017,dealers working exclusively in the primary market had median sales of around$1 million,which was roughly on par with the aggregate market,but considerably lower than those working in the secondary market at$1.6 million.Dealers in the primary marke

271、t often play a critical role in the establishment and management of an artists career and therefore they tend to represent a limited number of artists at any one time.On average,primary market dealers represented 25 artists in 2017,up from 21 in 2016.The range varied widely between six and 150,with

272、a median of 20.Median sales in the primary market (at$1 million)were considerably lower than the secondary market (at$1.6 million).7273 2|Dealer Sales and ExhibitionsDealers in the primary market often work closely with the artists they represent,with different levels of commitment including global

273、exclusivity,regional exclusivity or a non-exclusive relationship.While exclusivity was common in the past,it has become less so in recent years.Many dealers now collaborate with other galleries and institutions to promote their artists,develop their careers and establish their public profile.Many ga

274、lleries recognized that this can often work best when there is a lead gallery that assumes the primary responsibility for directing an artists career,while others collaborate on particular exhibitions,projects and sales.In some cases,the lead gallery may draw a share of the commission from sales at

275、other galleries,or there may be other less formal arrangements within the network,negotiated for particular exhibitions or periods.In many instances,only a relatively small number of artists that a dealer represents are commercially successful,and the profit they make through the sales of their work

276、 is often invested in the careers of others as a form of cross-subsidization.The number of artists a gallery represents is therefore not necessarily proportional to sales or profitability,and primary market dealers with sales turnovers of less than$1 million had a similar average number of artists r

277、epresented to those above$1 million.The number of artists did rise at the very highest end,when turnover exceeded$10 million(to an average of 37 artists).For most dealers,local artists tend to be more important for their business than foreign artists,both in terms of the number of artists they repre

278、sented and the sales they generated 56%of the artists represented by galleries in the primary market were local or national artists,defined as artists from,or working in,the region or country where the dealers business is based or reporting from.These local artists accounted for 61%of the sales made

279、 by primary market dealers in 2017(stable from 2016).Foreign artists on the other hand accounted for 44%of the number of artists represented and 39%of sales made by primary market dealers.Primary market dealers had exclusive representation with 48%of their artists on average(up from 40%in 2016),and

280、those who did often limited this to a region,city or nation.These exclusive artists accounted for 48%of total sales,up just 1%year-on-year.The share of exclusively represented foreign artists was slightly lower(at 45%).However,in terms of sales,exclusivity paid higher dividends for local artists:exc

281、lusively represented artists accounted for 57%of the sales of local artists works,versus 43%for non-exclusive local artists.For foreign artists,exclusively represented artists accounted for a considerably smaller share of sales of at 33%,but this was also due to their lower number.Overall,the single

282、 largest segment for sales for primary market galleries was local,exclusively represented artists (at 35%of sales).Figure 2.15|Primary Market Dealers in 2017 Arts Economics(2018)LocalForeign026481012576714a.Number of Artists Representedb.Share of Sales by Artist SegmentExclusiveNon-exclusiveLocal ex

283、clusive 35%Local non-exclusive 26%Foreign non-exclusive 26%Foreign exclusive 13%While exclusivity was common in the past,it has become less so in recent years.Primary market dealers had exclusive representation with 48%of their artists on average.7475 2|Dealer Sales and Exhibitionsimportance.By the

284、time a work is resold,these secondary sales tend to be higher priced by nature.Whereas value deteriorates in some secondary markets as the underlying good changes hands,art can often appreciate in value as the artist becomes more well known over time.For artists with an established track record and

285、resale market,information costs can be lower on the secondary market in Contemporary art,and participants are also likely to have better access to information concerning artists and their works,making purchases less risky.(Although this is not the case in older sectors,as the lack of information and

286、 requirement for historical research,scholarly cataloging and expertise can make information available at a high premium).As noted above,dealers working exclusively in the secondary market had significantly higher median sales in 2017 than those working in the primary market at$1.6 million(an increa

287、se of 20%from 2016).On average,secondary market dealers sold or were active in the markets of the work of 40 artists in 2017,an increase of 25%from 2016.This ranged from a low of just three artists to around 100.As in 2016,these dealers represented more local artists(65%),who accounted for just over

288、 half of the dealers sales.The remaining 35%of artists they represented were from outside the country where the gallery was primarily based.Secondary Market Dealers The secondary market is where dealers and auction houses offer works of art for subsequent resale,and a distinctive feature of the art

289、market is the predomi-nance of trade by value in this segment,despite the fact that many artists have a limited resale market.In the primary market,prices tend to be lower than on the secondary market,as when an artist first sells a work it can take considerable time before it is recognized for its

290、artistic value,rarity or historical Primary and Secondary Market Dealers The final category of dealers in the fine art market was those who worked both in the primary and secondary market,representing about one-third of all fine art dealers sampled.This group of dealers reported that their sales wer

291、e fairly evenly split between primary sales and secondary re-sales in 2017.Despite many secondary market works earning higher prices,a weighted average based on dealers overall turnover showed that across all dealers operating in both markets,49%of sales were made in the primary market and 51%in the

292、 secondary market.Some dealers reported that secondary market sales were sometimes used to financially support primary market programs,and hence most of the value lay in the former.However,there were also dealers who did mainly primary market sales,with very occasional secondary market sales to supp

293、ort artists they represented or for other specific or opportunistic reasons.Others were younger dealers who had started in the primary market but were moving more into secondary sales to add more art-historical context and help anchor their programs.Although not yet apparent in the figures,anecdotal

294、ly some dealers noted that there were increasing attempts by primary market dealers to move into secondary sales in 2017 in an attempt to boost profitability and margins.Some dealers saw this as a backward-looking cycle in the market,noting that this was the main model in the 1960s and 1970s where t

295、he only successful(unfunded)galleries were those where“front room contemporary artists were subsidized by the back-room stock of artists with a strong secondary market.”Dealers noted that during the 1980s,1990s and early 2000s,the market was strong enough for some galleries to exclusively run primar

296、y market programs.However,there were indications of some reversion to a period where it was more difficult for many galleries to be successful(at certain price points)only representing living Contemporary artists.Dealers working in both the primary and secondary markets had the highest median sales

297、at$1.8 million.Figure 2.16|Secondary Market Dealers in 2017 Arts Economics(2018)Number of artistsShare of sales20%50%40%60%70%80%51%65%49%35%100%LocalForeign0%7677 2|Dealer Sales and ExhibitionsCombining sales in both markets did appear to be successful,with this segment having the highest median sa

298、les overall at$1.8 million.Part of the reason for this higher turnover was that dealers working across both markets tended to represent a higher number of artists on average,at 45 in 2017(down from 52 in 2016).This was split between 47%in the primary market and 53%in the secondary market.The majorit

299、y(62%)of the artists that dealers worked with in this sector were local or national artists,and most had representation elsewhere(with just 16%or 7 artists on average having an exclusive relationship with the gallery).Most of the largest,high-end dealers are also active in both primary and secondary

300、 markets,which may also be a factor driving higher sales in this segment.There were differences between the sectors.In the primary market,62%of artists represented by the galleries in 2017 were local,up 5%in share on 2016.These local artists also represented the majority share of the gallerys primar

301、y market sales(at 68%,which was up 19%in share year-on-year).For these hybrid galleries working across both sectors,exclusivity was much less common.In the primary market,only one-third of the artists represented by the gallery were represented exclusively,although this was slightly higher for local

302、 artists(38%)than foreign artists(25%).Despite being a minority share,exclusive artists generated half of the sales in the primary market for these galleries,with most of that coming from local artists.Local artists who were exclusively represented by the gallery,in fact,accounted for the greatest s

303、hare of sales at 36%in 2017.In the secondary market,the share of local artists represented was similar at 62%,but these artists generated just 28%of gallery sales on average,down 17 percentage points on the share reported in this segment in 2016.Foreign artists on the other hand generated 72%of sale

304、s in the secondary market,despite only accounting for 38%of the artists in this segment by number.Finally,combining all those dealers working in the primary market,whether exclusively or in combination with the secondary market,the average number of artists represented was 24:58%were local,and these

305、 local artists generated half of the sales in this sector;43%were exclusively represented,with such artists generating 51%of sales.The highest single contributor to sales(based on weighted averages across all respondents)was local artists that were exclusively represented(28%),followed by foreign,no

306、n-exclusive artists(27%).In the secondary market,again combining all dealers whether operating only in this market or in combination with the primary market,the average number of secondary market artists represented in 2017 was 27;63%were local and these local artists generated just under half(47%)o

307、f the sales in this sector.Figure 2.17|Dealers Trading in the Primary and Secondary Markets in 2017 Arts Economics(2018)LocalForeign026481012256814a.The Number of Artists Represented in the Primary Marketb.The Share of Sales by Artist Segment in the Primary MarketExclusiveNon-exclusiveLocal exclusiv

308、e 36%Local non-exclusive 32%Foreign non-exclusive 18%Foreign exclusive 14%Figure 2.18|Dealers Trading in the Primary and Secondary Markets:Sales and Artists Represented in the Secondary Market in 2017 Arts Economics(2018)Number of artistsShare of sales20%50%40%60%70%80%28%62%72%38%100%LocalForeign0%

309、8081 2|Dealer Sales and ExhibitionsMore than 20 notable galleries in some of the mature markets closed in 2017,prompting new concerns that this trend is escalating.In order to consider these issues in context,however,it is important to understand the nature of business openings and closures in the a

310、rt market.Frictional openings and closures are common in all businesses.Data on the retail trade in the US shows that in 2017,only 33%of the firms operating at that time had been in business for more than 20 years.In 2017,the survival rate for firms started in 1997(or 20 years ago in 2017)in US reta

311、il was 23%.This was even lower for the private sector in general,with just 26%of firms having been in business for longer than 20 years.In contrast,2.6|Gallery LongevityOne of the biggest concerns dealers expressed in 2017,regardless of their turnover levels,was the changing infrastructure of the ma

312、rket,with the greatest performance year-to-year and longevity over time found at the top end of the market.Dealers expressed concerns at the widening gap between the performance of the so-called“mega-galleries”showing works by the most sought after artists at the top end of the value spectrum,and th

313、e mid-size and lower end galleries,who may be presenting more challenging or simply less widely recognized artists and programs.One of the most concerning outcomes of the top-heavy nature of the market in a practical sense is the strain on its infrastructure from the increased pressure on the middle

314、 market,as values move to the high end.While there continues to be considerable dynamism and vitality at the lower-priced and more experimental end of the market,where dealers are using a variety of hybrid models,social media and new projects to encourage new buyers and sales,the generally agreed mo

315、st difficult area remains the middle market,where well-established dealers(many in business for over ten years)in mature markets such as New York and London are closing their premises,moving or going into private dealing.At the same time,the very top-end galleries,bolstered by the success of selling

316、 works by the most sought after,highest priced artists,are increasingly encroaching on the middle market by actively taking on more mid-level artists,cherry-picking them from mid-level galleries and using the super-normal profits from superstar artists to subsidize any slack in their markets until t

317、hey are adequately launched and promoted.Although this development is nothing new,its prevalence is becoming increasingly problematic to a wider range of dealers,with the very top dealers encroaching on both classic mid-level dealers and also those who would otherwise be thought of as near the top e

318、nd.This has further cemented the superior market position of a very small number of dealers at the very highest level.Figure 2.19|Number of Years in Business in 2017(Share of Companies)Arts Economics(2018)with data from the BLSMore than 20 years11 to 20 yearsUp to 10 years0%20%40%60%80%100%50%26%24%

319、Dealers(less than$1m)21%41%38%Dealers(over$1m)59%31%9%US retailDealers33%24%43%The average number of years in business for galleries was 24 years.8283 2|Dealer Sales and ExhibitionsGallery openings on the other hand have declined steadily over the period,with the number of new galleries established

320、in 2017 around 87%less than in 2007.It was therefore the reduction in openings rather than a significant rise in closures that mainly caused the drop in net openings in 2017.As noted above,the decline in openings is also due to some extent to the lack of participation in art fairs for galleries,whic

321、h may affect the numbers that have just opened in 2017,but this trend is fairly consistent over time for openings,and indicates a drop in the number of new businesses overall in this part of the gallery sector.When analyzed as a share of the total number of galleries tracked each year,it is also cle

322、ar that the share of openings has fallen significantly(from 7%in 2008 to 1%in 2017),while the share of closures has been smaller and ranged between just 1%and 2%over ten years.the survey indicated the average number of years in business for galleries in the art market was 24 years in 2017(compared t

323、o just 28%of general retail firms in the US).Over half of the dealers surveyed had been in business for more than 20 years.Although this was skewed slightly by some multigenerational businesses,the median was also 20,and nearly 75%of the galleries surveyed had been operating for longer than ten year

324、s versus 57%for US retail.Not surprisingly,as it can take a number of years for businesses to begin to develop sales,there were differences in longevity based on dealer turnover.For those dealers with turnover of less than$1 million,there was a much larger share(41%)in business for less than ten yea

325、rs than in the segment with turnover greater than$1 million(9%).The majority(59%)of those with sales greater than$1 million had been in business 20 years or more,with a median number of years in business of 31(and 33 for those with turnover greater than$10 million).There were also differences in the

326、 number of years in business by sector.Contemporary dealers had the other lowest median years in business (at 15),while those in the older sectors of the market had the highest at 39 years.It is useful to analyze the number of openings and closures of galleries.A tracks the openings and closures of

327、galleries from a dynamic base of between 5,000 and 6,000 of the top galleries around the world.To analyze the trends in the sector,the galleries included in the analysis were only those that have participated in at least one major fair in the last 11 years,with new branches of headquartered location

328、s also appearing if the primary operation had participated in a fair.The data on openings is therefore skewed slightly by the criteria for inclusion:a gallery opening in 2017,for example,was unlikely to have exhibited at a fair in its first year of operation.Nonetheless,there are some interesting tr

329、ends evident in the data over the ten-year period from 2007 to 2017.Over the last decade,the number of openings has exceeded the number of closures in nearly all years.While the ratio of openings to closures in 2007 was in the region of over 5:1,this has declined rapidly since then.By 2016,the ratio

330、 was 2:1,and this dropped to just less than one(0.9:1)in 2017(that is,more closures than openings).15 The number of gallery closures has varied considerably,peaking in 2009 in the middle of the large contraction in sales in the art market,but also rising again in the years following the global finan

331、cial crisis(from 2011 to 2013).However,closures were actually at their lowest in 2016 and 2017,falling back to around half of their 2013 level.Figure 2.20|Median Years in Business in 2017 by Sector Arts Economics(2018)401051530252045351530333920ContemporaryOther fine artAll dealersAntiques and decor

332、ative artModern015 Again,the criteria regarding exhibition at a major fair may result in the understatement of the number of openings in recent years as there may be a lag before a gallery exhibited at its first fair and was recognized in the database.Closures may also appear with a lag as some gall

333、eries close privately without publicizing their closures and are only apparent in their non-appearance in fairs and exhibition records in subsequent years.Galleries were only included in the data where a clear year of commencement and closure date were available,and therefore do not include the large numbers of very small galleries and shops opening and closing in the wider art market year-to-year