Is big data taking hold of the art world?
Most people in the art world don’t care about data. But depending on who ends up controlling it, data could transform the market – for bad or for good.
The power of ‘big data’ and algorithms is part of our everyday lives. The global e-commerce industry harnesses it to increase customer engagement and sales, while financial services have adopted ‘big data’ to seek out greater returns, sometimes creating autonomous trading algorithms. Social media algorithms tailor your feeds using minute metrics such as how long you hover over a TikTok video. A 2021 investigation by the Wall Street Journal found that thanks to a split-second pause here or there, TikTok’s algorithm can learn your basest interests and innermost emotions in as little as 45 minutes. In essence, data can reveal our instinctual, subconscious, even primal, selves.
But the art world doesn’t really care about data. It is viewed as having little constructive use in the day-to-day activity of creating, displaying, or trading art. ‘I have come full circle on the value of quantitative analysis,’ said the influential economist Clare McAndrew in a 2018 talk at Art Basel. ‘When I started out, I thought that everything in the art world could be put into a quantitative model. Now I think it has a place, but it only guides you on big picture stuff.’
The closest the art industry gets to social media algorithms is image recognition software, as championed by companies such as Artsy, whose Art Genome Project and Thread Genius was acquired by Sotheby’s in 2018. The idea is that with enough data, and associated ‘tags’, an algorithm could recommend artists and works of art based on visual similarity. Finding that what you want isn’t available or is too expensive? No problem. Here’s a work that looks just like it.
This might sound ridiculous to anyone brought up in the traditional art world. Just because something looks like a Mark Rothko doesn’t mean you can sell it for $50 million. There is very little interchangeability in art. Furthermore, the biases of algorithms have been well documented – positive feedback loops push upward trends higher and downward trends lower, perpetuating existing prejudices and blind spots. Does the art world really want to direct collectors down this path? ‘We’ve taken a lot of steps to tweak the algorithm,’ said Artsy’s Chief Revenue Officer Dustyn Kim in 2021, referring to the need to mitigate against the data recommendations always being built out of the majority of sales, which continue to be made by white male artists. Artsy has had to manually introduce more racial and gender diversity into its recommendation engines.
But data can be alluring for those who want to disrupt the art world. One of the long-standing criticisms of the art market is that it is rife with informational asymmetry, particularly when it comes to prices. Having to ask a gallery director for a price is antithetical to the modern commerce experience, in which people expect all information on the spot, for free. And of course if data is not publicly available, it cannot be verified, which opens it up to manipulation (see for instance the recent data scandal at Warner Bros., who have been accused of inflating active subscriber counts for HBO Max).
Naturally, then, there are those who want an art world where all prices for art are available all the time. Where artist’s exhibitions are constantly and publicly graded. And where the person with the deepest pockets gets first pick. This, the argument goes, would be a ‘fairer’ art market, more democratic – like Amazon, or retail investment.
Millions have been invested in recent years into predicting and publishing prices. ARTBnk, founded by the financier turned art dealer Asher Edelman, claims to deliver ‘accurate, unbiased, and trustworthy valuations’ through the power of AI, machine learning and 100 million data points. (The company also offers art investment through fractional ownership of art.) LiveArt, founded by former executives from Christie’s and Sotheby’s, wants to create a C2C art marketplace that bypasses the auction houses and galleries. The company provides free and unlimited access to past public auction data and insights.
Artnet is perhaps one of the best-known companies in the art world, the leader in supplying historic auction sales data and insight. But for the past decade, the founding Neuendorf family has been fending off an attempted takeover from businessman Rüdiger ‘Rudi’ Weng. Weng controls just over 25% of Artnet’s shares, just a few percentage points away from making him the largest shareholder.
Weng, originally a financial analyst, is relatively unknown in the art world. He is not seen at glamorous gallery dinners or VIP openings, and his most public-facing company, Weng Contemporary, sells ‘affordable’ editions online by established ‘brand-name’ artists like Jeff Koons, Damien Hirst and Alex Katz. But behind the scenes, he has also been investing heavily in his data capabilities.
Last year he invested $2.5m, together with the collector Vincent Worms, in ArtFacts and its subsidiary Limna, who have been attempting to quantify how an artist’s exhibition CV correlates to their prices. If Weng successfully takes over Artnet, he will own arguably the most comprehensive auction database, as well as being able to track user searches. He will have a New York editorial team with its finger on the pulse of the newest trends and 4 million monthly visitors.
The motive for Weng’s interest in data can be easily deduced from his other ventures. He has also bought a 20% stake, alongside the dealer Johann König, of the art tokenisation company 360X Art. This company tokenises physical works on art on the blockchain for investors to trade shares of art back and forth. In 2023, Weng aims to create his own art fund.
In Weng’s vision, then, the idea of a traditional collector, one who supports artists and buys to hold, is fading. For him, the future of the art market will be that of the financial markets and the investors who thrive therein. His investments point towards the building of a rapid trading marketplace where works of art can be bought and sold day to day, hour to hour, with ease – in which he can then take a few per cent on the trades.
The traditional art world does not want a ‘financial’ ecosystem, but rather a ‘cultural’ one, where the value of art is driven gradually by community. Galleries and dealers representing artists and their estates often argue that full data transparency would remove the protective cloak that allows an artist to grow without the constant spotlight on price and hitting certain career markers. But for those investing heavily in art market data, KPIs are all that matter.
Few people are asking which data insights might be constructive to artistic endeavour and could help create a healthier art world, even though we have seen evidence that this is possible in the past. Take, for instance, initiatives like Art+Museum Transparency and Indebted Cultural Workers, which in 2019 and 2020 created an open, public spreadsheet with more than 3,200 salaries within all different types of arts organisations, allowing museum workers to fight for fairer pay.
Data is only ever a tool. Perhaps the questions worth asking are: who is using it and what are they using it to do? As the art adviser Josh Baer once jokingly put it, ‘Imagine what might happen to the art world if Larry Gagosian hired Cambridge Analytica?’