Source: Nasdaq.
Is the future of art collecting going to be digital?
The fundamentals of art collecting haven’t changed much over the centuries, and have mainly involved purchasing physical artwork from physical galleries to display in physical locations. But as with every other industry, technology is radically changing how we create art and how we collect it. Today, art can be created digitally, collected via digital means, and displayed digitally in a physical location or in virtual spaces.
But how are art collectors feeling about this shift, and are they readily embracing this new digital art world—especially in the midst of such a fluctuating market? Our recent report on the “State of Art Collecting 2022” gathered insights from a thousand art collectors to better understand their willingness or resistance to evolving digital trends, the rise in NFTs, using online sources for artist discovery, and more.
Seven Insights into the State of Art Collecting
The world of art collecting doesn’t look the same as it did ten or even five years ago. What’s changing, and how do collectors feel about it?
1. Collectors discover new artists through both online and physical galleries.
The art collectors we surveyed made one thing clear: The world of art sales and art collecting is going digital. An equal number of art collectors are discovering new artists through online marketplaces or galleries (37.4%) as those who go through physical art galleries (36.7%). A recent report also confirmed these findings, showing that collectors in 2021 purchased directly through a website or online viewing room slightly more (44%) than through a physical gallery (42%).
2. 61% of collectors are comfortable with purchasing art online.
Purchasing art online has a very different flavor to it than making an impulse purchase through Amazon. Art collectors are looking for works they can connect with emotionally, or that inspire or challenge them. Can they get the same emotional response while buying art online? As it turns out, yes, as 61% of art collectors say they’re either somewhat comfortable or very comfortable purchasing art online
During the pandemic, some brick-and-mortar galleries closed and others shifted their work online, forcing collectors to follow suit, which they did readily. In fact, 42% have purchased more art since the start of the COVID-19 pandemic. As a result, many physical art galleries previously without an online presence launched viewing rooms for collectors to browse and purchase art from home, while existing online marketplaces and galleries thrived.
3. 56% believe digital art holds as much monetary value as physical art.
Digital art creation has been around since the mid-20th century, and is growing more popular with each passing year. But it’s still very new—especially when compared to traditional mediums like painting and sculpture—which begs the question, “Do collectors view digital art as equally valuable?” Art buyers are just about split on their answer. A little over half (56%) surveyed believe that digital art should hold as much monetary value as art that you can physically see and touch. Not only are digital channels for artist discovery and purchase increasing in legitimacy and acceptance, so is digital art, too.
However, we’ve yet to see how the recent market downturn, which significantly impacted the price of digital art and NFTs, will influence the answer. Is something valued the same when its price can change so rapidly?
4. 63% have purchased an art NFT in the past year.
Where do collectors stand on art NFTs? 63% of the art collectors have purchased an NFT over the past year—similar to the number of those comfortable buying art online and who see digital art having the same value as physical art. Additionally, 64% of collectors say they’re likely to buy an art NFT within the next year.
Those who purchased an NFT in the past year are likely holding something very differently priced than what they initially purchased, due to the crypto crash. However, collectors say they’re looking forward to what NFTs can do for the art world, and believe they will help to legitimize digital art as well. While some are in it for a quick buck, many collectors are in it to build the digital art world over the long term.
5. Hesitancy over purchasing an NFT stems from needing more education and guidance.
Despite seeing large adoption already, there are still many art collectors who are hesitant to purchase an NFT. They see the process as too complicated, don’t know where to buy them, are unsure how to enjoy or display them, and don’t know which creators are worth collecting.
What could help? Collectors said they want an easier purchasing process, or someone to show them how to do it. They also want more education around what NFTs are and their value as they consider purchasing one—and probably reassurance that it is a worthwhile investment, despite the crypto’s recent volatility. Without the proper context and knowledge about what they are, NFTs will remain just a buzzword to many collectors.
6. As of early 2022, 22% of collectors plan to spend more than $5,000 on NFTs in the next year.
As adoption increases, art collectors are looking to add NFTs into their portfolios going forward, joining the nearly 4 million active wallets purchasing NFTs today. 64% of collectors say they’re likely to buy an art NFT in the next 12 months, and spend more than $5000 on NFTs in the coming year as well. Of all the various mediums, art collectors say they plan to spend the most on NFTs in the following year, followed by paintings and digital art.
7. The majority see digital art dominating in five years.
What will the future of art collection be? Will it be a balance between digital and physical art, or will digital art dominate? As demonstrated above, there is a definite move towards digital, and 60% of the art collectors surveyed believe that in five years, the digital art market will grow to be larger than the traditional or physical art market.
The Future of Collecting
Will the future of art collecting veer towards the digital? It certainly seems to be moving in that direction. However, a richer art world will be one in which the longstanding tradition of physical art co-exists with a burgeoning world of digital creation that offers artists and collectors alike new opportunities and benefits.