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We’ve tried to quantify the drop in Andy Warhol’s market. The 74% fall in sales volume is both dramatic and unsettling, especially when no serious participant in the art market will say that demand for Warhol has diminished. The dislocation of supply, caused by the rapid rise of art values from 2010-2015, is probably the reason for Warhol’s market absence. Still, without significant works by Warhol on the block, there is a question of market leadership.
For more than a decade, Warhol has provided a substantial portion of the Contemporary market’s sales volume. The Pop artist’s work pushed the Contemporary market ahead in boom times and provided blue-chip shelter in bad times. Until now. The Warhol market has not disappeared but, as the following charts show, it is no longer the dominant force in contemporary art.
While considering that, we also wondered how big a force the market for works by Gerhard Richter had become. In both cases, it is the fact that these prolific artists have substantial bodies of work that trade in the eight-figure range that makes their work so consequential for the market. The art market is nothing if not top-heavy in the 21st century.
Such a big question requires thorough analysis. We hope to present, in the coming weeks and months, several different looks at the relationship between Richter, Warhol and the overall market going back several years. But a preliminary run of data by Athena Art Finance has revealed an interesting dynamic.
This chart, based upon the sales data for the New York and London auction cycles at Christie’s, Sotheby’s and Phillips, shows the percentage of the Contemporary art market that sales of work by Gerhard Richter and Andy Warhol constitute.
From the chart, you can see that work by Richter composed 7.1% of the Contemporary sales volume in 2014. The next year, that figure dropped to 5.2%, then rose to 7.7% in 2016. It’s important to remember that overall sales volumes were dropping over this period with 2016 showing a substantial pullback. Nonetheless, Richter’s works were a reliable cornerstone to the market.
By 2016, Richter had surpassed Warhol as the market’s main driver. As one can see from the chart and the figures cited above, the issue is less about Richter gaining market volume—his share of the overall market has stayed within a range those three years and the market itself saw lower transaction volumes publicly—than Warhol’s work retreating from the market.
Warhol’s market share was a robust 15.8% in 2014 when Christie’s was able to bring some major works to market from a German casino that had owned a pair of 60s paintings. Warhol’s market share fell to 12% in 2015 before nearly evaporating to 5.7% in 2016.
As a reference to understand these numbers, we’ve included a second chart showing the lots as a percentage of the overall market. You can see that on a lot basis, both artists remain within a fairly tight range. From that we can conclude that the drop in market share is more about the mix of works and the valuation of the top works than it is about fewer works accounting for the sales drop.
We should be very cautious in how we interpret these numbers. Sales on a year by year basis, even when the lot percentages remain constant, are not like-for-like comparisons. This is not simply a matter of buyers paying less for the same types of work. Clearly, there’s an issue with the mix of higher value and lower value work. In 2016, in particular, the market seemed to transact in lower value objects by each of the artists.
Finally, these charts provide clues to a much more intriguing trend. We know that the art market contracted in dollar volume from 2015 to 2016. That fall would not show up in the market share tally where Warhol keeping track with the broader market. That leaves another implication from these charts that is positive for the art market’s growth. Namely, the market itself may be broadening beyond Warhol.
A market that is less dependent upon a single artist should be a more stable market. Buyers chasing more artists might dampen market volatility or constrain a rapid rise. As noted above, these are only three years of data and two artists. The subject of market leadership requires more thorough research to make a sustainable case for what is really going on.