What do I know about the Art Market?

In conversation yesterday, I had the pleasure of introducing someone to Jeff Koons' name and reputation for the first time.  In essence, the subject of our conversation was about market forces, specifically the concept of "fair market value", though we were also talking about handmade objects, art objects, artistic labor, and entrepreneurial opportunity in/on the open market.

So I thought I might extend some of the conversation we were having into this weblog...  Because when it comes to any question of art's value, a single conversation is never enough!

Assuming you're even a little unfamiliar with Jeff Koons, or the progression of his body of work since the 1980s, you might want to see Jeff Koons' website or maybe the Gagosian Gallery website, since he has had a very close relationship with this gallery for many years/decades.  On the Gagosian Gallery's site, you'll find there is an online "Shop" where a variety of reasonably sized collectibles — such as books, catalogs, t-shirts, and printed plates — are available for purchase at prices near or below $500.

 www.gagosian.com/shop/jeff-koons--banality-series-oval-platter--abcmsjkoon22

www.gagosian.com/shop/jeff-koons--banality-series-oval-platter--abcmsjkoon22

I use the word "collectibles" in this context very intentionally.

The image printed on this plate, pictured above, represents an object from Jeff Koons' Banality series, approximately 1988, entitled "Ushering In Banality".  Though it is attributed to Jeff Koons, and he does own exclusive copyrights, the polychromed wooden sculpture "Ushering In Banality" was crafted by European artisans (commissioned by Koons) in an edition of three, with a single artist's proof.  Which is to say, there are a total of only four original copies of the sculpture depicted on this plate... and none of them were crafted by Koons' own hand.  One of these sculptures sold at a Sotheby's auction in November 2001 for $1.875-million USD.

By contrast, this plate (which features a reproduced image of the sculpture) is one in an edition of 4,500 identical ceramic dinner plates.  And you can own it for just $380 USD.  Keep in mind, this plate was not handmade by Jeff Koons, anymore than the original sculpture whose image it bears.  The entire 4,500 edition of dinner plates was produced by Bernardaud, along with similar numbers of other plates likewise featuring Jeff Koons' artworks.

On the Bernardaud website, Michel Bernardaud stands beside Jeff Koons in a photograph commemorating yet another Koons dinner plate, this one featuring a vintage monochrome photograph of bathers in a formation similar to a human pyramid (Koons describes it as a peace sign).  The photograph printed on this particular plate was likely captured before Koons' date of birth, perhaps by an unknown photographer, and so it is likely that any applicable copyrights now belong to the collective creative commons, enabling Koons to appropriate the image without any fear of being dragged into court.  Yet again.  (He has been forced to defend the use of other people's copyrighted imagery in his work, several times, and he has often lost.)

For the sake of contrast, let's look at Kidrobot, another name that came up in our conversation.  Kidrobot describes its product line as "limited edition art toys, signature apparel and lifestyle accessories".  The website also states "Kidrobot toys retail anywhere from $5 to $25,000, and many appreciate in value over time".  The brand does not belong to a single artist, nor can the product line be attributed to a single artist.  Three-inch tall limited edition objects start at $14.99 USD.  Four-foot tall limited edition objects start at $4999.99 USD, with the option to customize an object at the buyer's request (likely at additional cost).  It's not always clear how many objects are in each "limited" Kidrobot edition...  But one of these, some 12-inch tall objects in the "black" collection, are produced in quantities of 200 and retail between $399.99 USD and $499.99 USD.  "Each piece is hand numbered with the artist's engraved signature on the bottom", the website states.

Kidrobot's most popular and affordable products are known as "blind boxes".  "Each Blind Box features one of eighteen 3-inch collectible vinyl figures.  Odds vary from common to extremely rare" — but there's no clear indication of the total quantities of these objects, worldwide...  Which suggests Kidrobot reserves the right to produce unlimited quantities of each blind box toy, or what printmakers might call an "open edition" run.  Prices on blind box assortments range from $4.99 USD to $11.99 USD.

Kidrobot's business model is less like Jeff Koons', than it is like Bernardaud's.  Graffiti artists, graphic designers, fashion designers, musical artists, street artists, animators, and television series license the use of their copyrighted content (designs, images, signatures, doodles, drawings, paintings, sculptures, etcetera) to Kidrobot — the same way Jeff Koons licenses his images to Bernardaud — and then the company produces somewhere between hundreds and millions of individual objects.  Licensing contracts no doubt provide each artist (or copyright holder) with some degree of compensation, which may or may not include royalties, residuals, or %-share of worldwide sales.

It is clear to me, though it may not be clear to everyone, that Kidrobot's business model is reliant on industrial fabrication techniques to produce its vinyl objects en masse.  Dunnies and Munnies and minifigures of all kinds are cast using the latest automated technologies, in much the same way My Little Ponies are made.  Even surface decoration can be automated (using screenprinting technology), in much the same way Mattel applies Barbie's eyes and lips so that every doll of the same name is perceptually identical, no matter which factory (or which country) they're coming from.

Today, Jeff Koons owns and runs his own sort of factory...  But there's nothing automatic about what goes on there.  He employs dozens, if not more, skilled artists and/or artisans to execute paintings and sculptures by hand under his supervision, or to manipulate complex digital files that can be used to reproduce his works in print (digital image editing software), online (digital image and/or video editing software, possibly some scripting, too), or in manufacturing (computer aided design).  And when manufacturing is required, I suspect that work is outsourced to external partners and vendors, like Bernardaud, with very specific instructions and deliverables outlined in dense legalese.  Koons' brand equity surprisingly demands a very high level of craftsmanship, despite his banal subject matter and inspirations drawn from popular content.

Kidrobot and Jeff Koons not only differ in terms of their business model, they are also targeting different markets with different demographics.  Kidrobot targets aficionados of youth culture, street culture, urban culture, popular music, and quirky cartoon television, etcetera, in addition to toy collectors and impulsive consumers who simply like what they see when they see it.  Koons' may be exploiting more or less the same opportunities for garnering mass appeal, but his primary market is fine art collectors with deep pockets, including prestigious museums, corporations, and foundations — or those who often donate to museums and foundations!  His secondary (or perhaps tertiary) market is the average art museum visitor or patron who demonstrably cannot afford to pay hundreds of thousands let alone millions to collect fine art.  People like me, I guess.

They have very different distribution systems, as well, for handling sales.  Kidrobot products can be purchased direct from their website, or in toy stores, record stores (yes, record stores still exist! and some still sell vinyl records and CDs!), Urban Outfitters, and other national or global retail chains.  Anywhere Kidrobot can place their products, no doubt they will.  On the other hand, Jeff Koons' works retail in art galleries, museum gift shops, and online.  But you can't find any transactional functionality on JeffKoons.com directly, and you won't find much more than copies of his books being sold by popular national or global retailers, which forces you to look at galleries, museums, and other of Koons' business partners.

Jeff Koons has relationships with more than one fine art gallery; his contractual obligations to those galleries no doubt stipulate that he must provide one or more of them with a percentage (perhaps fixed or variable) of any independent transactions he makes.  Like any recording label (in the music industry), these gallerists are partners in the success of an artist's personal brand, and so they get a share of the artists' earnings even when that artist cuts a deal independently.  One or more galleries may also have the contractual right of first refusal in the event any private patron or museum who owns a Jeff Koons artwork hopes to sell it.  Whenever there is a "right of first refusal" clause in a sales contract (which is a standard sales clause in the buying-&-selling of fine art objects), the seller must first contact whichever party has the "right of first refusal" to try to negotiate a sale.  The seller is free to solicit other buyers only after this party refuses to purchase the artwork.  ...Yes, buying and selling fine art objects can get pretty complicated.

I guarantee no such contracts exist between individual artists and Kidrobot, or between Kidrobot and their customers!  And by the same token, does the Gagosian Gallery require buyers to sign an agreement which stipulates terms like "right of first refusal" when one purchases a limited edition Jeff Koons dinner plate direct from their website?  Heck no!  For all that one of these plates retail at prices higher than the most expensive coffee mug you own, have ever owned, or are ever likely to own — this dinner plate may as well be a coffee mug, as far as both Jeff Koons and the Gagosian Gallery are concerned!  And don't expect Sotheby's to take much interest, either, if you hope to re-sell your Koons dinner plate for a profit, someday!  For that matter, I don't expect Sotheby's to take much interest in auctioning a four-foot tall limited edition fiberglass Dunny, though I could be wrong.  (Maybe I hope I am wrong!)

 

...If I were to distill for you a simple takeaway from all of this exposition, what would it be?...

For starters, I suppose: Shop local, buy local (to support local artists).  When possible, buy one-of-a-kind or limited edition objects (to improve the odds of an object appreciating in value over time).  And consider being a little more generous in your judgments about artworks made by the students and emerging artists in your life.  A little appreciation goes a long way!

 

Read more about Jeff Koons and/or Kidrobot in these online articles:
http://www.artnews.com/2005/05/01/the-selling-of-jeff-koons/
http://www.vulture.com/2013/05/age-of-jeff-koons.html
http://hoodline.com/2015/02/kid-robot-windows-smashed-twice-this-week
http://www.denverpost.com/business/ci_27021210/kidrobot-sold-labbit-creator-frank-kozik-named-creative

Or check out 33 Artists in 3 Acts by author Sarah Thornton at your local library!