No more ritzy galas, dinner parties, or jet-set fairs: The art world is coming to terms with a 'shelter-in-place' market. 5 insiders reveal how the industry is faring — and their hopes for what's next.

Lawrence van Hagen, an art curator, advisor, and founder of the pop-up art shows "What's Up," told Business Insider that really, only the concept of art itself is poised to make it through the pandemic fully intact. This is because people will always make art, regardless of economic situations. Therefore, the craft itself is always safe.

But that's about it, according to van Hagen.

From the artists who make art, to the galleries and museums that show it, to the collectors who buy it, and to the fairs that present it, all must come to terms with the fact that the art world will probably look different after the pandemic. Places that do not have robust incomes — like the $3.6 billion endowment the Metropolitan Museum of Art receives — are at risk.

In fact, an ongoing study by the Americans for the Arts found that US arts and culture organizations have already lost over $5 billion since late March because of the pandemic.

The Americans for the Arts surveyed more than 11,000 organizations to see how they were coping during this time. More than two-thirds of the institutions surveyed predict the crisis will have a "severe" or "extremely severe" effect on their business.

"Many people, as well as the stock market, seem to think the worst is behind us, but my impression is that we are in the early stages of the pandemic, and its effects are going to magnify over the next few months," Enrique Martinez Celaya, an artist based in Los Angeles, told Business Insider in May.

Other big names, such as the Museum of Modern Art in New York, the Hammer Museum in Los Angeles, and the Modern Art Museum in North Adams, Massachusetts, have laid off over a hundred employees, according to Art News.

Typically, museums in the United States are funded by commercial activity rather than government backing. The Sotheby's Institute of Art noted that, unlike many museums in Europe, which started from royal collections or are backed by their governments, commercial business is what usually keeps American museums afloat.

This means contributions, fundraising, merchandise and licensing, and education programs. Admission fees often make up a small proportion of museum revenue. But even as the doors have shut, these institutions must maintain restoration labs, care of their collections, and pay insurance premiums to protect the art, along with thousands of other unseen costs.

"Galleries, some small museums, and a significant number of alternative spaces will not survive this period, which is a terrible loss," Martinez Celaya told Business Insider. "The pandemic also has had a chilling effect on collectors, but it is too early to tell whether these changes are permanent or not."

Source: New York Times

Artsy, an online platform for discovering, buying, and selling fine art, told Business Insider it has seen a massive uptick in e-commerce sales, as more people are spending time online. Artsy was launched in 2012 and connects over 4,000 international partners from over 100 countries — galleries, auction houses, art fairs, and institutions — to art lovers around the world.

Artsy CEO Mike Steib told Business Insider that the company is taking advantage of the surge in online activity, and said the virus is bringing the overdue digital transformation that the art world has needed for years.

"I see galleries putting more of their time and energy into managing their digital channels, uploading works," he said. "They're just spending more of their time and energy on the online channels because their offline channels are currently unavailable."

Specifically, Steib says Artsy has seen a 200% increase in sales volume year-over-year and a 60% increase in applications from galleries looking to join Artsy. The platform also reports a 50% increase in the number of works uploaded per week by galleries, when compared to just 4 months ago.

At the end of March, Artsy launched an e-commerce functionality for its European galleries, to help drive sales for its COVID-19 impacted partners. The platform is also now partnering with galleries to help recreate their shows virtually. Now, Artsy hosts over 100 online exclusive show.

"Our art fairs are hitting 20 times the traffic that they have historically seen online. The last art auction we had outperformed our best art auction by like 30%," Steib said. "Opening up these channels for our partners whose physical world has been closed has given them a new source of surging demand that is going to really contribute in a really important way to their businesses."

For some, their vision of the art world might call forth an image of an older person, holding a glass of champagne, in front of a million-dollar painting. And that's fine. But Steib says it's time for the markets to evolve for a new customer: the one sitting in pajamas, on a bed, typing away on a laptop at home.

"There is a new generation of buyers emerging. Over the next 10 years, trillions of dollars in wealth in the US is going to be inherited by a largely millennial and digital-native audience," he said.

"People used to walk around Soho, go from gallery to gallery; used to get on a jet and go art fair to art fair," Steib continued. "But they're passing money down to a new generation who has never bought anything that way. Their expectation has been: you see something you love online, you click a button, then you own it."

Artsy has been trying to actively connect with the next generation and says the virus has brought many galleries, naive to the young marketplace, to the platform, and as a result, new collectors are able to now find them.

"If the art world doesn't transform to digital to serve that new batch of collectors and potential collectors, the art world will shrink," Steib said. "The silver lining that can be found in the current crisis is that so many players in the art world now have to transform to digital, and as a result, they're going to be set up for years of success in the future as these new collectors come into the art world."

The Courtauld Gallery in London reported its virtual tours having a 723% spike in visitors in mid-March. At the same time, art fairs such as Art Basel in Hong Kong went virtual, while Frieze Art Fair is also online, however, some have warned of a "virtual overload" as more fairs head online.

But still, this is, perhaps, art at its most accessible. Online viewing rooms and virtual tours are the new evening shows, and jet-set is from the bed to the couch.

However, Jennifer Zatorski, president of Christie's America, said that while the way the art market has been able to quickly transition online is important for the overall health of the market, art lovers will always still want to have that in-person experience.

"We know there will always be a basic human desire to stand before a work of art in-person," she said. "However, the whole art sector is working on ways to accommodate both the physical and the virtual in the future — Christie's included — so that people can engage with art in a more bespoke and one-to-one way, or in an entirely virtual way if that is what they prefer and what is best for the health and safety of the larger community."

Lawrence van Hagen, an art curator known for his "What's Up" pop-up events, agrees, and said that he doesn't think art's vast online presence will come to overtake the physical art world. He noted that many in the older generation will still find comfort in seeing art in-person, in addition to the fact that the art world is known for its fun social events — and the comfort of human contact cannot be fully recreated online.

"The younger generation, they want to buy online, especially if you know an artist, you know the artwork that is done, it's very easy to buy online. But if you've never experienced that or seen it, it might be a bit more challenging," he said. "The art world is also a big success because of its social aspect, with the fun parties, the dinners, and lots of people buy into the art world for the social aspect."

Van Hagen, the curator, was best known for the "What's Up" pop-up art shows he put on in galleries throughout the world. The events this year have been canceled, but he says he's not worried — instead, he's taking the time to re-strategize and figure out the best way to take his shows digital.

"I'm working on an online 'What's Up' show that should be launched toward mid-June," he said. "It will showcase a variety of artists, from much more established to some younger ones."

He said that people were constantly running from one place to another, and as a result, rarely had time to focus at art shows. Therefore, he believes the art world doesn't need the number of art fairs it was having and suggests some events move entirely online.

"I don't think that online is going to win it all and it's finished for the fairs," he said. "But I think it's a great thing to have and it will complement what galleries have already been doing."

Like everyone else, van Hagen also says that many galleries will not survive this, but he also questions if many even want to survive. "This will be an escape for them," he said, suggesting that many will cease to trade art, and may become theaters or pop-ups instead.

He also notes that right now, people are buying more art — wealthy people are investing in the category because, especially blue-chip art, is considered to be a "real asset class" and safer to invest in than stocks priced daily. Many are also selling artwork — perhaps to raise cash, invest in new interests, or for other personal reasons — meaning that rare and otherwise hard-to-find works are now back on the market.

But van Hagen doesn't believe this means the art world is safe from economic blowback, and he is patiently waiting to see what the full economic impacts on the art market will be.

Business Insider previously reported that the art market bounced back faster than the S&P 500 during both the 2008 recession and in the 2015 and 2016 market sell-offs. But there is no guarantee that the art markets will be so safe this time.

"I'm worried about the sales odds," he said. "Everybody's buying, it's strong. You know, the market is stronger than ever. How will it be in a few months time when we've realized how bad the economy has been hit? And you know, I always think that in the art world, [the effects] always comes a bit late."

Artists are going through a difficult time. Many younger and emerging artists who were preparing for exhibitions or were about to be taken on by big galleries are now having to deal with that loss, van Hagen said — a loss of income, a loss of press, a loss of livelihood.

This is where platforms like Artsy are hoping to come in, so that the exhibitions that were canceled can be moved online, and so that the artist who lost opportunities can find them.

"I think artists are inspired at the moment. The things I'm seeing being made are incredible, and I think that others need a bit of a break as well. There's a lot of pressure off them, you know, to produce, produce, produce, produce," van Hagen said. " There's a bit of slowdown. I don't think it's a bad thing if it's a short duration."

Helphenstein, who is currently a digital director at a gallery in Los Angeles, told Business Insider that current sales and auction records prove that people are still buying expensive art. For wealthy people, she said, buying a $50,000 painting is like buying a head of lettuce.

"It's like us going out for sushi one night or something," she said, adding that the art world of the future might see more competition, as smaller galleries close and bigger museums absorb their artists.

But overall, Helphenstein believes that some of the setbacks the art world might face during this time are necessary, and there might be some parts of the world that are better off being left behind. The pandemic, she said, is a "wildfire" for the art world — it will create the environment necessary for more art to grow.

"When a wildfire burns, you actually shouldn't put them out a lot of times because wildfires create carbon-rich nutrients for the soil to, like, regrow something new and different," she continued. "And I do believe that nothing will be lost. The forms of things will change. But we're not losing anything, because the people that were in the hyper-commercial headspace of art, they're going to stay there."

The Hood Museum of Art at Dartmouth College, the Fisher Museum in Los Angeles, the Jack Shainman Gallery in New York, and the Baldwin Gallery in Aspen — all are places Enrique Martinez Celaya had spring exhibitions planned, and all of which have now been postponed.

Martinez Celaya was also designing a garden for a collector in Spain and had lectures planned at Stanford University, The Huntington Library, Art Museum, and the Botanical Gardens.

"At first, the situation seemed confusing and stressful, and while it is still difficult, my studio and I have reacted quickly to the changes," he told Business Insider. "This is a very tough time for the world, and we will feel its painful consequences long after the pandemic is over."

Despite this, Martinez Celaya said he has been trying to focus instead on future projects, such as a planned exhibit in Berlin in October, and an upcoming book. He has also been looking beyond the art world and is hoping to focus on collaborations and projects in areas such as design and fashion.

"Crises also bring about paradigm shifts and opportunities," he continued. "There will be fewer venues, especially galleries, and there will be less people attending openings or crowded exhibitions. Maybe some of this void will be filled by artists engaging directly with the public. I suspect that artists' studios and voices will play a bigger role in the post-corona art world."

Martinez Celaya said that his studio has been concentrating on tasks that it has previously put aside, such as archiving, compiling images and notes, and responding to letters and requests. Now that his schedule is clear, he and his studio have also started expanding its digital presence.

"We produced a few Instagram Live events, including a peek at the process of making a painting as well as a question and answer session in which people from around the world participated," he said. "We also released some archive footage through YouTube."

He, like others, believes that this is the time for the art world to expand its online presence, and create a long-term digital strategy. But he warns that online migrations could have unintended consequences. For one, it could be harder to sell artwork online, because people will not be able to physically see what they are purchasing.

"Virtual platforms are most effective at facilitating remote viewing and education rather than sales," he said. "The value of most artworks is apprehended by engaging with actual objects or installations, but this is difficult to do virtually."

Furthermore, the art world, known for its gatekeepers and inaccessibility, could now find itself too accessible.

"Since it is easier to create a website and a social media campaign than it is to rent and remodel a building in Chelsea, many people can become involved with these virtual platforms," he said. "Perhaps this online trend may inadvertently bring about new models into the art world by undermining the galleries' gatekeeper status."

In the past 3 months, Christie's has adapted quickly to its situation, and pivoted its attention, like many, to the digital world.

Jennifer Zatorski, president of Christie's America, told Business Insider that decades ago, Christie's made an investment in its online-only sales platform, and that has been able to let it host regular sales across all categories for years.

In 2019, over half of its global clients bought or bid online, bringing in over $270 million in online sales transactions, according to the auction house. And this year, despite everything, Christie's could see record online sales.

"Since the lockdown, we have nearly quadrupled the number of sales in our online-only channel, presenting fully-curated selections of contemporary art, prints, jewelry, wine, watches, English and European furniture, and decorative art," Zatorski said. "Sale of rare books, antiquities, Impressionist and Modern art, Old Masters and European art are to come next, and we have launched a program of special fundraising sales to support vital charities during this time."

Christie's has also updated its Private Sales channel, which supports work at the highest end of the market. The auction house added online viewing rooms, and more "sophisticated viewing and interaction" tools. Activity in that channel has increased by almost 30%, Zatorski said, and buyers are now approaching the auction house with "wish lists" or artwork and objects to acquire.

The auction house's newfound focus on its online channels has given it time to adopt new, creative ways to reach consumers. It launched a fundraising experiment linked to a charity auction, "Andy Warhol: Better Days," that resulted in Christie's selling its first piece of artwork through Instagram.

It also created free education offerings around the notion of "Art as Therapy" and has been streaming webinars, short films, and presenting collecting guides on its website. As a result, social media engagement has increased on all platforms, including Facebook, Instagram, Pinterest, WeChat, and even LinkedIn.

"The pace of innovation, the creativity, and the resilient engagement of our staff during this challenging time has been truly inspiring," Zatorski said. "One silver lining in all of this has been to break our tradition-bound reliance on printed materials to promote sales and engage with clients. We have now proven to ourselves that a significant reduction of our overall carbon footprint is very achievable."