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Art Technology Startup Changing the (Inefficient) Art Market
LettsArt is a British outfit and the first secure NFT enabled artist website platform
The art market is fashionably late to its digital opening night. Some argue it is one of the last big markets to remain so antiquated. As a consequence, more often than not, the price we pay for art is inflated. The art world’s notorious lack of transparency makes for dynamics that are unnecessarily archaic and at times even a little shady. A new crop of technology startups are attempting to change this.
And why not? The large number of cryptocurrency speculators have, for a while, been looking for something to spend their valuable crypto reserves on. They are proving quick to turn to digital art supported by NFT’s on crypto-only marketplaces such as OpenSea and Rarible. Some believe that investing in NFT art is the perfect next asset class to experience the kind of stunning returns experienced by early Bitcoin investors. Bridging from one to the other could become the next fad.
The problem is that art today, in the vast majority of cases, is not bought with a digital currency. It uses less exciting, more traditional payment systems like dollar bills and Visa credit cards. More Van Gogh than Beeple. It is perhaps not surprising given that gallery owners are generally quite real-money driven people and auction houses could hardly be described as the racy type.
At the same time, given that most artists struggle just to heat their studios, they are not exactly looking to splurge on Bitcoin to stimulate the creative juices. They just want to sell more art for cash. You know, to pay the rent, buy paint and eat!
A handful of technology companies are working on approaches to change the dynamics of the market. Social media has allowed a wide portion of professional artists to build their own following, so technology platforms are starting to emerge which enable artists to monetise their social media fans by selling art to them directly. Liberating them from the constraints and sometimes shady dealers in the backstreets of art 1.0.
The art market probably does need a healthy dose of change. Of the estimated 1.4 million professional artists, 3.6 million professional photographers and millions of creative filmmakers and designers, few have an agent. The vast majority have to sell their art through friends and family, supported by studio sales. Most of this is done manually with little technology to support it.
Art supermarkets like Saatchi Art and Etsy are a little dated, over crowded and while easily accessed by anyone who calls themselves an artist, they control just about every aspect of the sale including often, the buyer, delivery and just try getting noticed. There’s no space for the emerging creator economy. They’re kind of a mosh pit of artists and its a game of chance getting noticed and bought.
Equally there are millions of people that buy art, even though it is estimated that there are only between 8,000 and 10,000 high end art collectors worldwide. And apparently the average age of such a collector is 59 and they are predominantly male. They are most commonly located in the US and have at least $1 million of disposable income. I guess the not-so-crypto end of the market.
While art galleries focus on the high end art collectors, they only represent a very small proportion of art buyers - who do not buy art in swanky galleries, art fairs or auction houses. Which is one of the reasons why the Affordable Art Fair and artist studio open days have become so popular.
At the same time, digital art with NFT’s is opening the art market right up. As a result, platforms are emerging that will connect the millions of art buyers with the millions of artists that actually create the art, directly. Isn’t this why the internet was created in the first place?
One of these new online platforms is a technology venture with an impressive team led by the seasoned owner of the Letts Journal. This much anticipated startup has launched an online platform for visual artists, including traditional and digital artists, photographers, filmmakers and designers, to be able to sell their art directly to their supporters.
LettsArt (www.lettsart.com) enables creators to set up simple, but powerful online galleries in minutes and start selling their art directly to collectors, taking payment by bank card, credit card and cryptocurrency. Artists can sell both physical and digital art, and the latter is NFT enabled with sexy looking authenticity, royalty management and series management tools. Assuming you’re into that kind of thing.
Registering at LettsArt and setting up a gallery is free which makes it an attractive proposition for creators. Particularly given the current cost of living nightmares. LettsArt takes a commission for the art sold through their marketplace. Art collectors and buyers in general look to benefit from direct artist sales and, over time, a more transparent and open marketplace for all kinds of art from around the world.
LettsArt also claims to offer a more secure environment for NFT art transactions as both the creators and the collectors have to register with the site and provide profile information. NFT's have had issues with fraud. The platform that sold an NFT of Jack Dorsey's first tweet for $2.9 million (was it Elon Musk?) had to halt transactions because people were selling tokens of content that did not belong to them, its founder said, calling this a "fundamental problem" in the fast-growing digital assets market.
LettsArt believes that their platform has the potential to attract a large number of creators and provide a transparent and efficient art marketplace for collectors worldwide. They argue that the current, fragmented art market is plagued with inefficiencies and a lack of transparency. There is no stock exchange style clearing house for art and little direct support for the artists and artist sales.
"We believe that the art market is going through some fundamental changes and that by enabling artists to easily launch their own online gallery, the art market could get turned on its head - providing opportunities for creators and collectors alike."
Dave Evans, LettsArt’s technology leader
According to Magnus Resch, there are roughly 19,000 galleries in 124 countries in 3,533 cities worldwide. The US and Europe are home to 83% of all galleries worldwide, with 34% in the US. New York, London, Berlin and Paris are the cities with the most galleries. Imagine if there were millions of artist galleries on the web connected directly to millions of buyers with slick matching tools to bring you the perfect art at the perfect price every time.
Technology platforms like LettsArt could make it easy to develop new business models to help artists make more money from their art and creativity including subscription models, merchandising tools and new publishing approaches. And artists could finally get to build their own list of collectors just like social media helped them develop their own fans.
If a larger proportion of the money invested in art went to a wider spectrum of living artists, it could trigger an explosion of creativity. It might be time for a larger proportion of visual artists to make more money. You know, like it pays to be Kim Kardashian or Valdimir Putin or the meerkats on tv.
Magnus Resch goes on to state that 55% of art galleries generate revenues of less than $200,000 and 30% run at a loss. Only 18% make a profit margin over 20% and around 40% of them have no full time employees. Maybe it is time for artists to have a go, particularly given that almost 90% of existing galleries do not have a subsidiary making this already one of the most fragmented industries.
The art market has only recently started to shift to online sales, but with the development of Web 3 and NFT's, the online growth is picking up steam, doubling in a year to 20% of art sales in 2021 according to Statista.
It looks like LettsArt's artist gallery model could prove timely as creators around the world look to better monetise their followers and supporters on social media, including Instagram, TikTok and Facebook.
LettsArt is currently available in beta for UK artists. Meaning the wait might almost be over for creators to better control their destiny and spend more of their time creating inspiring art that distracts us from the latest war or pandemic or McDonald’s ad. And it might prove better for them than paying their bills by serving us at the local burger joint.
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