Investment is a complex phenomenon. So is the concept of return. In the field of art, one can very well question why a buyer will pay double or even three times the market price of a work at an auction and not do the same while buying from a gallery or direct from the artist?s studio?
He or she sees the auction as a high-profile event where one?s presence alone is understood to be a sort of return. This return becomes higher if the process of bidding becomes exciting and one is not only present at the event, but also becomes a participant.
Finally, the excitement of competitive bidding and the publicity resulting from having acquired an object of value is all part of the price paid for a work of art at an auction. So, one can subtract something like a third to half the price bid for a work to assess its market price outside the sale system.
This price, of course, reflects certain realities. The auction house prints a catalogue, maintains a website and posts results on it. This transparency helps build confidence in the market, authenticates works (with fakes being publicly removed from auctions) and stabilises a price structure. True, single sales can be manipulated, but an average of the price achieved by an artist?s work (for those artists whose works come up for sale in large enough numbers) or the sale as a whole, gives us a fairly accurate picture of the profile of the market.
Indeed, it is from this possibility of objective assessment that contemporary art was able to score above grave-robbers and heritage plunderers.
The success of the auction system, with its stress on documentation, authentication and publicity, has found takers among galleries as well. More and more galleries are printing catalogues, though the openings no longer have the sense of wonder they had before.
This is because, with nearly 200 galleries in Delhi alone, the old-style opening where one could discuss the aesthetic importance of an exhibition at leisure or share news of art events is a thing of the past.
But gallery owners are aware that this was an important element in the process of value addition and have begun arranging talks and discussions during the period of an exhibition.
Also, while some of the more expensive galleries can be hired for three or four days for better publicity, the average length of an exhibition at the home venue of the gallery concerned has increased. This is because the market is good enough to sustain the cost of a long run.
In the olden days, the gallery would have been forced to rely on shorter runs and store-room sales. Also, a smaller number of galleries was constrained to circulate a much greater number of works in the same period of time to make ends meet. Today, with better sales and more competition, gallery owners are relying on longer and better thought-out exhibitions with more efforts at value-addition.
The growth of the market has affected the artists too. Before, even a number of our best artists, were bonded to certain galleries. Now they have a much broader choice of galleries to exhibit in. So they are more keen to commit themselves only for a certain show. But there does seem to be a greater advantage for an artist not to have to worry oneself with sales.
So contractual arrangements of various sorts have emerged, with terms that are better for the artist than before. In general, the development of our contemporary art market has not only increased its profitability, but also the share the artist gets.
The evolution of different institutions of the market allow artists with entrepreneurial skills to bring them into play. Not only are they able to get better contractual terms, but also they are more aware of the global market than ever before.
A number of them even sell ?futures? by accepting payments for works not yet executed. The more business like among them have even tailored the installation form to the market with parts of installations up for sale, just as in the pre- commercial period of installations, one could carry away parts of them free.
The blandishments of value-addition and market relations have affected a wide section of our artists too. And they should, for only fools would trade away the valuable objects for others to profit from.
But there is one element that calls for caution from artists. Those who play to the market may make money immediately with plausible art, but they are doing their buyers a disservice and defrauding them in the long run as plausible works are never good investments.
The buyer must be aware of these forces in operation in the contemporary art market and steer carefully through pitfalls and catch the winds of basic trends to carry them forward. The buyer must understand that judging an object only by the processes of value-addition that buttress its price is like going for the packaging and ignoring the product.
A work of art is a product. It must be professionally executed. It must be a relevant object in an ongoing trend that has a future. And apart from that, it must be original.
Only then is it worth investing in. Buyers must concentrate on all three aspects being present in a work of art to make it worth buying.
