With Record-Breaking Online Auction, Artsy Plots Next Steps

Visitors have been flocking to the Whitney Museum’s major retrospective of Julie Mehretu since March. The Ethiopian-born American artist’s large scale works that mix abstraction with social commentary have also captured an even greater online interest. Case in point: last Thursday, art purchasing platform Artsy sold Mehretu’s massive Dissident Score painting for $6.5 million, the highest price ever reached on the 12-year-old online marketplace. The auction underscores the New York-based company’s continued growth through the pandemic, a period when online art sales doubled. “Not only was the price record-breaking for the artist and Artsy, it’s a new benchmark for any online-only marketplace,” said Artsy CEO Mike Steib. He noted that proceeds from the Mehretu auction are being donated to Art for Justice, which campaigns against mass incarceration. “For over a decade, we’ve invested in digital—and Artsy is transforming the art market by making it more accessible through greater transparency, brand trust and easy and safe click-to-buy mobile-first tech.” The sale is another step in Steib’s efforts to raise Artsy’s brand amid the established auction houses such as Christie’s and Sotheby’s. With a mission of uniting the digital and physical art world, Artsy has reached a user base of 2 million-plus art collectors and sellers—as well as ties to over 3,000 galleries around the world. We reached out to Steib, who is a former CEO of XO Group and has held leadership roles at McKinsey, NBCUniversal and Google, to discuss the year that was and where Artsy is going from here. Adweek: How is Artsy celebrating Pride—what are the goals of this campaign? Mike Steib: We made a public commitment in 2020 to be more inclusive as a business. Engaging our collectors and art lovers with multi-layered campaigns for Pride, Black History Month, Women’s History Month and AAPI etc. is a very tangible way we can honor our promise and support under-represented or marginalized artists, galleries and art communities. For Pride, we’re doing a benefit auction for Tom of Finland Foundation and a curated Artsy group show ‘Expressions of Pride,’ part of which is displayed digitally on transit systems nationwide through our partnership with OUTFRONT Media. Art fairs and galleries are opening up again. Do you see the reopening as an opportunity as well as challenge for Artsy? I love art fairs. I've already booked my rooms for Art Basel in Miami and Frieze in London. Everyone expects me, as the digital guy, to say, "Don't go to an art fair." As the digital guy, I will say, "Go to an art fair. It's super fun." At the same time, the best of the art fairs has 200, 250 galleries and maybe 2,500 paintings. We have a million on Artsy. We have over 3,300 galleries plus 40 of the world's leading auction houses and institutions. We curate it for you. We create software-driven recommendations. And if you're not 100% sure what you like, you spend a little bit of time in our app and you'll come out the other side informed and more confident in your decisions because of all the work we’ve done. So, the reopening is obviously good for everyone, Artsy included. We previously spoke with Artsy CMO Everette Taylor about Artsy’s mission to “democratize” the art market. The business of art has been conducted largely the same way for hundreds of years. Do you view Artsy as upending the traditional structures of the art market? There are three ways that industries transform. The first one is a Google or an Amazon show up and they inform you that you've been transformed. That first way is usually not very pleasant for an industry. The second way industries transform is some outsider raises a ton of venture capital and blows up the industry. The way Uber transformed taxis was not by working with taxi companies. Artsy has committed itself to the third way. We partner with the industry by bringing unique technological expertise to the art market. We're the only company in the art world that brings acumen in technology, in data science, in creating great user experiences and marketplace dynamics. We can't develop artists markets. That's what galleries do. We can't pick the next 10,000 great artists who just got their MFAs and who deserve to be hanging on the walls of galleries and museums. That's what galleries do. I have to credit [Artsy founder and Chairman] Carter Cleveland and the team who were here before me. They did not come in like a tech company, waving their venture capital money around and trying to get rid of the incumbent players. Artsy was built in partnership with galleries and auction houses. It is why today we're able to drive so much value for those galleries and for the millions of collectors who use Artsy. For Pride, Artsy is doing a benefit auction for Tom of Finland Foundation, and a curated a group show Expressions of Pride, part of which is displayed digitally on transit systems nationwide through its partnership with OUTFRONT Media. What did this past year mean for Artsy? It was an important year for the art world. And I'm proud of the work that the team did to support the art world when it needed it. Three things that happened during Covid that from Artsy's perspective were important. The first is [that] the industry, the physical part of the industry, closed down at the start of the pandemic. Most of our partners did not have in-house technical capabilities to become digital companies overnight. There was an all-time high of galleries calling us and saying, "We want to get on Artsy. We need help." Art fairs had been canceled. We really hustled to make sure all of those fairs were available purely digitally, and in most cases, exclusively on Artsy during the pandemic. The share of revenue that came from digital channels tripled for galleries during Covid in 2020. It was a lot of hard work at Artsy to make sure we were scaling up with our partners and making that work. And one of the things that scales that up is the demand side of the house. 50% of our on-platform buyers in 2020 were new to Artsy. Secondly, on the demand side, we were seeing activity from people who may not have been bringing dollars to the art world in the past. Part of it was driven by people sitting in a converted second bedroom that was now their office. In my case, my bedroom became the worldwide headquarters of Artsy. People’s walls were suddenly blank and sad. And their discretionary spending on other areas [had] gone down. [We've] been able to use that as a moment to introduce a lot of new people to the art world through the Artsy app. Lastly, it was a moment where I think every company has a social responsibility. We felt we had to be there for the industry, for our users, for our employees in an important pivotal moment in the social justice movement. In addition to the work that we were doing around Covid on the social justice front, we put together task forces to work through all of our algorithms to make sure that our marketplace and our recommendations are fair and anti-racist. Algorithms can become racist. If everybody clicks on Picasso and Andy Warhol, then everyone's favorite artist is a dead white man. We've worked hard to change that. What specific changes has Artsy initiated to address questions of equity, diversity and inclusion? We've dramatically improved our hiring practices. More than 50% of our hires are BIPOC since the big turning point during Covid. We decided if we're going to transform the art world, to make it fairer and more inclusive, [we] can’t do it without a diverse and inclusive employee population. I'd say those two things came together and we did over $8 million worth of fundraising through our benefit auctions in the last year. This is a nice extra thing that we were able to support the community on [that, through art,] is getting money back to good causes, whether it was the Museum of African Diaspora or Food Bank for NY, or dozens of others that we did. On a separate topic, you’ve been very outspoken on the hype around NFTs in the art world. What is your take on it? Are you skeptical about it as an art product? I wouldn't say I'm skeptical. I'm a little irritated at the swiftness with which I guess the media—and some in the art world—have conflated NFT with art. There are many media through which the stories and the works of great artists can be conveyed. And digital art is one of them. Digital art secured on the blockchain can be one of them. But the converse is not necessarily true: just because something is an NFT does not mean that it's art. A crypto punk is not art. And a crypto kitty is not art. An NBA top shot is not art. They are different things that happened to be on the blockchain. And when Charmin put rolls of toilet paper on the blockchain and called it NFTP, it was not art. There is a conversation out there: “NFTs have finally democratized the art world.” Tell me how the NFTs have democratized the art world. Well, anyone can make one. Well, I'm sorry, are David Kaplan and Mike Steib not allowed to make art? Are we not allowed to buy paint and canvas and create a piece of art? Because when I last checked, we were. It doesn't mean that we're entitled to a gallery or to be hung in a museum. So, for 50 bucks, you and I could have all the equipment necessary to be painting. That's not the same for NFTs. We have to get a Metamask and attach it to our browser. Then we have to mint an NFT—which is not cheap these days. The gas fees are very high and so on and so forth. Then what do we do? Well, I guess you could sell it to a friend the same way you and I could create a painting and sell it to a friend—or you could turn to a middleman. And I could hope that Nifty Gateway or someone will welcome my NFT. It's certainly a thing. There are artists who are practicing the craft in digital and who are securing their art on the blockchain. I think it's wonderful that there's this moment for them to be recognized and to connect with collectors. But I'm not there on Beeple being the third most important artist in history because he sold an expensive NFT. I'm sorry. I'm not with y'all on that one Your personal views aside, is Artsy engaging with the sale of NFT art? Our galleries and our artists, with only a few exceptions, are not rushing into NFTs. But we are going to make sure that they can, just like my galleries and artists can have paintings, prints, sculpture, digital art, all of which are already being sold on Artsy today. We'll enable the marketplace so that NFT-backed digital art can be sold as well. It won't be a wild and new thing. It's just another thing that you can buy on our marketplace. São Paulo Museum of Modern Art Opens Its Virtual Doors in Minecraft

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Artsy’s Record-Breaking Sale Paves the Way for its Post-Pandemic Growth Plans

The platform’s $6.5 million auction represents a new benchmark for online art prices

David Kaplan

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David Kaplan