Preview

Archive
Sotheby's

Sotheby’s executive vice-president talks about their online venture and the importance of auctions on the web

A brand new tribe of collectors and buyers is coming

Sotheby’s has received a good deal of negative publicity of late, not least as a result of its online auction venture. David Redden, Sotheby’s executive vice-president, spoke to The Art Newspaper about the importance of online auctions to Sotheby’s future business and in the process laid a few rumours to rest.

The art market is in turmoil. A vast number of online auctioneers have appeared in the past three years, some of whom have already moved into markets hitherto controlled by the traditional bricks and mortar fine art houses. Sotheby's boardroom has been in disarray, lawsuits have been flying, the share price is plummeting and speculation is mounting that sothebys.com is not proving as successful as expected. Are we witnessing the break-up of Sotheby's as we know it?

David Redden: No! Business at Sotheby's, which is live as well as dotcom, will continue as always. We have a large staff all over the world whose job it is to conduct auction sales and that will continue. You’re right, the world has changed as a result of the internet and a whole slew of online competitors has emerged. Some will fall by the wayside, but it has spawned new efforts to harness the auction process. We’re perfectly placed to deal with it and not everyone else is. We’ve put a lot of effort into it.

Can you lay a few rumours to rest? Have the first few weeks of business on sothebys.com been enough to convince you that there is a future in selling high-end art online?

Boy, do they convince me! When I originally talked of it a couple of years ago, I thought of the bracket £200-£1500 as the core online market, but my ideas have kept moving. We sold a book for $88,000 a few weeks ago and recently a painting for $65,000, so we’re at the beginning of a process. To predict the internet’s development is an act of hubris, but the technology is going to get better and better and the ability to virtually‚ touch and feel will improve. As download times get faster, more people will come online and there may be the ability to view in three dimensions. If you could focus in on a detail of an object—a piece of furniture or the brushstrokes on a painting—without the image degrading, wouldn’t that be exciting? It could be better than real life! Which is why it is important to be here now.

How long do you expect it to be before the viability of your online business becomes emphatically clear?

It is emphatically clear right now. We’re already well in excess of $10 million of sales, probably closer to $15 million, with $6 million on sothebys.com and $3.4 million on the sotheby’s/amazon baseball sale alone. These are early days but the kind of buying we’re seeing and the levels of confidence has already made its viability emphatically clear.

The web is a highly visual medium, but some might say that it privileges the purely visual at the expense of the many important physical characteristics upon which aesthetic judgment ought to be based. Sotheby's made a leap of faith in going online, investing in a system in which a digital image and a supporting guarantee are deemed sufficient to instill confidence in buyers. This seems a strange move for a business which has been built upon its professed ability to understand the physical and psychological subtleties of collecting. How would you respond to this?

Visual information is the primary information on which aesthetic judgements are made, but there is other information as well. It’s important to remember the importance of the sense of touch, and then there is a third quality which is the sense of presence, or what all your senses tell you about an object, which is harder to understand in a photograph or on a monitor. So I grant that these are all qualities related to appearance which need to be taken into account. But there is a another quality, and that is convenience. Is it convenient to be in New York on 12 June when you happen to be in London or Frankfurt at the time? These are enormous impediments which can cut buyers off from 90% of objects in the world. Thirty percent of property at our sales gets sold to absentee bidders, so already a lot of bidding is based on discussion between clients and Sotheby’s staff and on the basis of pictures in catalogues. Computer images are already superior to catalogue images. Furthermore, not everything is illustrated in the catalogue and multiple images of the same object online gives you a big advantage over printed catalogues. Plus there is no constraints on the length of text. Collectors always value touch and presence but convenience and access are also important.

What do you see as the single most important factor likely to affect the future of high-value fine art sales on the web? Will its prospects improve as technologies improve, or does its future depend on a change in buying habits?

The single most important factor? Probably the prospect of a brand new tribe of art collectors and buyers. If you could have twice as many buyers, it could have an extraordinary impact. The internet breaks down inhibitions about auctions and categorises property better. You are able to sort it and locate with a precision which was not available before. But the single most significant change will be the increase in buyers. Not so much in Europe yet, but in the US e-commerce is a highly acceptable part of life. That will happen very rapidly in Europe with the arrival of broadband and flat-rate phone access. Every increase in modem speed is like nirvana, and so broadband, which offers astonishing speed, will be very exciting.

Christie's appears to be putting clear blue water between themselves and Sotheby's. Are you concerned about the fact that they may increasingly be perceived as controlling the high ground of the auction market now that Sotheby's has invested so heavily in the more populist technology of online art sales?

I’m sure that Christie’s is trying to create that perception but to the rest of the world it is entirely bogus. We still concentrate on that enormously important area of high-end art. I’d argue strongly that a successful online venture helps our high-end, live‚ business enormously. An auction house without a viable online business will be unable to serve its high-end clients properly.

If Sotheby's valuable brand name fails to translate into the kind of online revenues necessary to justify its initial investment, how will the company seek to differentiate itself from other online auction houses?

It already has differentiated it. Our 4,800 dealer partners is proof of that. There is no comparable online auction house. They don’t have the experts we have, the name, or the access to property. Online auction houses continue to proliferate. It’s a field of a thousand flowers but they all cancel each other out.

Does the new web format signal the end of the transparent public auction at which a lot is openly seen to be either sold or unsold? What guarantee is there that a vendor will not artificially force up the price of an item consigned by him, by instructing an associate to bid on the lot?

Transparency is extremely evident in the online auctions we hold. It is absolutely made clear if the reserve has been reached or not, so it is already enormously transparent. As for artificially forcing up the price of a lot, vendors are specifically prohibited from doing so by contractual agreement with us and could be sued if they contravene that contract.

Will the press eventually be given access to sale statistics, as they are with traditional sales, or does the trade nature of the inventory being sold on the web call for greater confidentiality on the part of the saleroom with regard to results?

My bias is to give you the same statistics as with traditional sales. I’d like very much to have the same kind of access. I don’t think the associates aspect has any bearing on it, but we are currently evaluating that issue.

Can you foresee a time when blue-chip fine art—recognised masterpieces by Cézanne, Van Gogh, Picasso, for example—will be offered on the web, or will certain categories of fine art always be confined to a real-world auction environment? Where might such a value cut-off point be located?

I can imagine a lot of things. I’ve been an auctioneer for twenty-five years and I can easily imagine a convergence of live and internet business so you can bid online for things at a live auction. Download speeds make it impossible today, but it is becoming more likely. I’ve put a $4-6 million item up for sale in June [The Declaration of Independence] so I do think it can be a useful way of selling. There would obviously be registration issues, but I can see it happening. The excitement, drama, theatricality, the electricity of a live auction is important to selling certain kinds of objects.

What is the greatest threat to the future of Sotheby's? Online competition for its traditional business? Or a failure to compete effectively for bricks and mortar business?

In the short term it is certainly a question of competing effectively for bricks and mortar business. That is where 90% of our staff are employed, but in the distant future (which doesn’t mean very distant) if we had not prepared for online auctions we would be seriously vulnerable. But there is another sort of vulnerability. Our staff expect us to be of the times. It would hard to keep staff if we were not keeping up. They are not leaving us for dotcoms, as many people assume. In the cases when they have gone, it was not because Sotheby’s went online, but because there were other opportunities and that has always been the case. We are at the leading edge because of our approach to high-end art on the Internet.

Originally appeared in The Art Newspaper as ‘A brand new tribe of collectors and buyers'