Colin Gleadell reveals the irony of online art sales touting their evanescent results. The Auction Room has courted sales by promising not to keep a public record of works that have not sold in the hope that consignors will feel better about exposing their works to the risk of being burned. It would seem that the lack of price transparency boomeranged on The Auction Room when its site went down in the last half hour of bidding as a slew of interested parties crowded online to see the results before they vanished.

Let’s let Gleadell tell it:

For The Auction Room, things may have been exacerbated because followers of the Middle Eastern market had learnt from The Daily Telegraph that results would not be posted on its website or elsewhere, so they would have to visit The Auction Room to find out if lots sold. The closing action has duly been postponed until 6pm this evening , when, hopefully, the website will cope

Art market news: online sale of contemporary Middle Eastern art suffers website crash (Telegraph)

Last night, the folks at Gallery Nine 5 in NoLita asked me to meet with some of their clients to discuss the changes in the art world. Our conversation, which I will try to turn into a post soon, ran toward where the art world is going. Specifically, much of the talk centered around online art efforts like Amazon’s new art sales and Artsy.

The Economist offers a rejoinder today in the form of a categorical prediction that the high end of the art market will never be conducted without a level of trust and face-to-face contact:

Higher up, things get more complicated. Artists yearn to exhibit in real galleries; collectors want to experience first-hand a work’s scale and texture. In the secondary market the spectre of forgery makes them wary of dealing with virtual vendors. When the price of an artwork tops £5,000 ($8,000), “you want a relationship with a client,” says Steve Lazarides, a specialist in “urban art” who runs both physical galleries and an online shop.

The priciest bargains are struck between dealers and coteries of collectors they know well. The terms are almost always secret. With living artists, relationships matter even more. Dealers are expected to nurture their careers, which means managing prices, too. It is an “unwritten law” that they must never fall, says Friederike Hauffe, who teaches a course in art marketing at Berlin’s Free University. Some dealers discourage collectors from selling the work of an artist they represent; if one comes up for auction they might bid up prices. To fail to sell an item at auction is to “burn” it.

That does not mean that online marketing plays no role at the top end. Swanky galleries have long e-mailed images to potential buyers. Many exhibit art online to attract global interest but conduct transactions in cosier settings. Nearly four-fifths of galleries insist on some direct contact with buyers, according to the Hiscox report. Most online sales above $100,000 happen via the electronic bidding channels of auction houses such as Christie’s.

Enter Amazon (The Economist)

GalleryNine5

Buried at the end of Georgina Adam’s important mini-essay on the growing threat to price transparency presented by online art sales which have taken the counter-productive stance of making their sales results opaque as a default. The Auction Room, which is selling Charles Saatchi’s hodings of Contemporary Middle Eastern artists, seems to be promoting the “offer-without-consequences” advantage.

Adam contacted Clare McAndrew for comments on the overall trend. But McAndrew, the economist responsible for TEFAF’s annual report on the art market, reveals this fascinating figure:

She estimates that online sales in 2012 were about $3.2bn – 1 per cent of the global ecommerce market – and says that the market could reach close to $11bn by 2017.

The Art Market: All Eyes on the Andy Index (Financial Times)