Established gallery owners, art dealers, and auction houses are rushing to claim virtual real estate in what remains one of the last uncharted areas of e-commerce: selling fine art online.
"The art world is behind the rest of the Internet movement," said Ian Peck, president and CEO of FineArtLease.com.
The Net is dramatically changing how the art business works by making information and purchasing power widely accessible to consumers.
"We're seeing a lot of new buyers who may be intimidated by the traditional art world environment," said Uta Scharf, vice president of auction sales for ArtNet.com. With online auctions, inexperienced buyers "can approach the art world in a relaxed and comfortable way without feeling exposed."
Art has been available on eBay for years, but now established auction houses such as Sotheby's and Butterfield & Butterfield are entering the online market.
EBay recently partnered with Butterfield & Butterfield to launch Great Collections. The pairing combines eBay's reach with Butterfield's reputation and trusted name in fine art sales. Sotheby's, also a famous traditional auctioneer, joins another e-commerce giant to launch Sothebys.Amazon.com in the next few weeks.
Models like eBay's Great Collections have "taken the market by storm," said Stephen Turner, director of Internet specialty support and appraisal for Butterfield & Butterfield.
The site with the most visitors and hits will succeed, according to Turner. And with eBay's existing visitor base, "We're the 800-pound gorilla."
But not everyone believes that high-volume sites targeting mass-market audiences are the way to go.
Christie's refocused its Internet strategy last week, abandoning a two-year competition with Sotheby's to launch a separate online auction firm that would sell cheaper collectibles to a wider audience. Instead, the auction house will focus on expanding its core business of lower volume, higher-priced items.
"We felt that the Christie's brand had to be protected," said Andree Corroon, a Christie's spokeswoman. "We're focusing on quality, not quantity."
ArtNet's Scharf agrees that experience and expertise, rather than numbers, will determine which sites will thrive. "A large selection is only viable if all pieces are checked for quality. Who does that best will win the game."
Joining the rush to make fine art accessible to the mass market, FineArtLease.com recently launched a new way to leasing artworks on a short-term, long-term, or rent-to-own basis. The company wants to widen the art market, yet give people the same level of service they would receive at an auction house or gallery.
Collectors can rent art works from galleries, private collections, corporations, and previously unseen permanent museum collections for as little as three months to as much as 10 years. Tax deductions provide an added bonus to corporations and first-time collectors who lease.
By eliminating the premium many fine art dealers charge buyers, online auctions and sites that sell directly often make art more affordable. But with more online bidders competing for rare objects, prices can soar and auctioneers can collect higher fees.
"When the dust settles on cyber auctions, you will have higher prices," Turner said.
With pressure to buy quickly, inexperienced bidders may end up paying more in an auction than through a gallery, Peck said.
Online auction houses are currently struggling to get good property, because works that are more expensive than US$5,000 are unlikely to sell online, Peck said.
Others say that high-priced items are already making their way onto the Net.
Butterfield & Butterfield is already selling high-end items. Pieces such as JFK Jr.'s sail boat, which was offered on EBay's Great Collections, wouldn't likely be up for sale if it weren't for online auctions, Turner said.
Critics say that fine art isn't made for online auctions, because viewing a piece on a Web site is no substitute for seeing it in person.
"I don't think the auction model works yet because the need to physically see an artwork first is so important," Peck said.
As a remedy, sites like NextMonet.com and FineArtLease.com provide a return period where unsatisfied customers can return an artwork, no questions asked.
In addition to being focused on physical works, the art world is largely relationship driven, based upon trust between dealers and collectors, so many sites offer advice and consultations to build trust with buyers. But even live auctions are attracting larger followings and auction houses aren't the intimate communities they once were.
"We're not replacing the role of the art dealer or gallery," said Bob Conway, vice president of art content for NextMonet.com. "We're democratizing access to contemporary art to open up the art world to a larger audience."
Evidence suggests that buyers are willing to buy fine art sight unseen. Scharf said ArtNet's business is booming.
Many art professionals agree that the art market is going to move online in the next few years and that as collectors get more comfortable with buying expensive items online, more will purchase fine art.
The real impact of the Internet on the fine art market may not be seen in the immediate future, though.
"People are not yet comfortable buying a US$35 million Picasso online," Turner said.
