How Two Companies Dominate The $67 Billion Art World

How Two Companies Dominate The $67 Billion Art World


That is up now one million seven
hundred thousand lots on gentlemans bid and selling for three
hundred and twenty thousand. Thank you, Rachel. 350
sold at eighty thousand. Thank you. 300’s. The global art market was valued at
sixty seven point four billion dollars in 2018, the second
highest year ever. The United States, United Kingdom and
China are the three largest art markets in the world. Their sales combined
make up 84 percent of the global art market, with the U.S. capturing over half of that. So thank you very much, Cynthia. Woman in seven, the auction house is one
of the biggest drivers of the art market. SALES at public auctions
exceeded $29 billion last year. And then we have here a few
additions works that are coming up for auction. An Andy
Warhol cowl wallpaper. Great. Keith Haring from
the fertility series. Robert Rauschenberg and Kiki Smith, five
auction houses combined for over half of the global sales. And of those five, there are
two that far surpass the others. Christie’s and Sotheby’s, they account for
more than 40 percent of auction sales within this duopoly. It’s a competition for total sales and
works of art while adjusting to economic and buyer trends. We’re like a sports team
competing against another sports team. We’ve won the Super Bowl most years
and we compete in almost every single field at the very top. I’d say we’re either number one or
number two in rare occasions in every field with names synonymous
with the art world. Success for Christie’s and Sotheby’s is
often more about standing out than being number one. Teeth
are always changing. Prices for individual works or artists
will change not just according to the market. But according to trends,
according to precedents and great examples. By and large, the
art markets really strong. So the process of consigning a
work is both simple and detailed. Either I reach out to a client or
a client reaches out to me given the value range that I
generally dealing with. I’m usually flying off somewhere to see
a work in person because it’s that important. I usually will discuss a
proposal for sale with the client before sending them a contract. In that case, you’re discussing how
are we going to sell it? Where are we going to sell it?
When are we going to sell it? What’s the estimate going to be? There are a lot of different things that
we do and every work is different and every client is different. Then we go to the contract
is with a contract signed. Art is shipped to the
warehouse and prepared for auction. When it’s brought to us, we look
at it critically in the warehouse. We assess the condition. We check to see if
the estimate is correct. We’re in Phillips Warehouse
in Long Island City. This is our hub in our main housing
and work area for the New York office. This is the cataloging area of the
warehouse where every piece that comes in for sale is examined
out of the frame. All of the details are then input
into our computer system, which in the end ends up generating the catalog. And here we are in the
framing studio in the warehouse. And this is the area, as you can see
around me, where we’ve got just a lot of framing supplies and materials in
preparation for making sure that I would say ninety nine percent of the works
that we sell in a sale have a frame on them so we can get them on
the wall and have people see what the piece looks like. And a good example
of what we do with framing. This is a recently
framed piece by M.C. Escher, the wonderful and
popular graphic artist. The estimate for the Esher is 40 to
60 thousand, and we expect that to bring over the high side. There was one that came up for auction
a year ago and I believe it hammered at about eighty thousand. And another piece about the same
size, about the same time period. Wonderful etching by Pablo Picasso. And this is our photography studio,
also located in the warehouse where basically everything that would fit
on these walls is photographed. Whether it be sculpture, paintings,
prints, multiples, photographs or even three dimensional furniture objects with
each piece prepared for the public attention shifts to the exhibition where
art is on display to the public prior to auction. The exhibition is really important because,
you know, we draw on the resources of the
marketing department. Everything comes together. You’ve worked for six months to
bring these pieces to auction. They’re on display
with beautiful lighting. You can stand in front of them
and talk to the clients about them. Ladies and gentlemen,
welcome to Christie’s. Welcome back this afternoon for the Chinese
art from the Art Institute of Chicago sale. And then we have the auction. And that’s, you know, the final test
of, you know, how great these things are, how much money are
they’re going to make. And there’s always a surprise. I’m going to start it straight in at
one thousand one, 10, 20, 30, 40, 50, 160. Let’s see how far that gets us. One hundred and sixty one. Seventy
one eighty one ninety two hundred thirty to forty. I also believe that
the auctioneer is really critical at this point. A great auctioneer can make a
big difference in the value of a sale. Now we get serious
today that the hundred. Thank you. 950 standard. 1Million. Ebola. Only one eat in person
bitting is a huge part, but we also have very active telephone bits,
online beds and commission beds and online bidding is something that we’re seeing
more and more of selling to you online in Hong Kong
at one hundred and ten. Thousand dollars they’re wanting. Sold while live auctions bring excitement
and millions of dollars in sales. Choosing an auction house to sell
one’s art is not always an easy decision. Christie’s and Celebes
both have rich histories. Sotheby’s was founded in London in
1744 as a bookseller in 1955. It became the first international
auction house after establishing itself in New York. It would also become
the first international auction house to sell in Hong Kong,
Russia, India and France. Until this year, Sotheby’s was listed
on the New York Stock Exchange. A public company for 31 years. We’re really celebrating a history of
innovation and being a forerunner in the industry and transforming the industry
over two hundred seventy five years. Sotheby’s boasts offices in 40
countries and ten auction locations around the world. It offers about 250
auctions each year across over 70 categories. Christie’s was also founded
in London and arrived shortly after Sotheby’s in 1766. Christie’s is the largest auction house in
the world and one of the oldest art auction houses in the
world were headquartered in London. And we’ve been operating in New
York for about 40 years. Christie’s has offices in 46
countries with 10 auction locations. Each year, Christie’s hosts about 350
auctions across over 80 categories. It holds multiple records, including the most
valuable work to be sold at auction. A DA Vinci that
sold for over $450 million. It also sold the most
valuable private collection at auction. The collection of Peggy and David
Rockefeller, which achieved over eight hundred thirty five million dollars. Last shots at seventy one
million five hundred thousand. Year after year, Christie’s and Celebes vie
for the top spot in the auction world with
Christie’s topping sales. All but two years since 2008. The areas that create revenue
are primarily the paintings departments, first and foremost in terms of
value, postwar and contemporary art, which has been the great boom market of
the last 10 years, impressionist and modern art, which is the
favorite for many people. And what drives so much museum attendance,
Asian art and tried and true jewelry, watches and
other luxury goods. We’re known for selling everything. But the leading grossing categories of
late have been impressionist and modern and postwar
and contemporary art. 20TH Century art is definitely
in the headline generating sector. Equally were known for selling
jewelry, furniture and decorative arts wine. Broadly speaking, 20th century art would
be over 30 percent of our gross revenues. There’s also Phillips,
the third largest London based international auction house founded in
1796 with a narrower focus. We’ve continued to focus on
20th and 21st century. And we have expanded further our geographic
reach and now have sales in Hong Kong, Geneva, London, New York. While total sales have yet to exceed
$1 billion, they’ve seen a one hundred twenty nine percent
increase since 2014. The auction world and the art
world generally is an increasingly transparent environment, which I
think is great. There is more and more data available
to everyone just as often as a client is calling me because they know
me dust and that’s a privilege that I work hard for. There are clients
who are calling both sides and very often they tell us I think what
makes people choose one option, health versus another, is the combination of all
of the factors, the pricing, the marketing, the digital outreach, the client
base, the specialists and the ability to carry out the promises that
you make when you’re bringing an object or a collection to market. I think focus is the
most important differentiator for Philips. We do focus very much on
contemporary lifestyle, on contemporary tastes and contemporary art. And as such,
we offer a slightly different feel. Our brand resonates differently. I think in the market then Christie’s
and Sotheby’s, we have a fresher, younger approach. The reason that people
choose Christie’s is multi-fold. One can see the reputation of
the particular department more and more. Its the ability of the auction house
to tell a story globally to many different buyers all around the world
and through digital campaigns, tell different stories to
different cultures. And that is really the driver of
what’s been selling collections for the last few years. On rare occasions, securing a
work of art comes down to a simple game of chance. In the early 2000s, there was
famously a consignment coming from a Japanese vendor with a wonderful collection
who had a very good relationship, both with the Christie’s
representative and our competitors representative. And it was so difficult
for him to make a decision. Despite our drawing distinctions in
terms of performance pricing, distribution. Network
marketing abilities. He’s still found himself unable
to make the decision. Ultimately told them that the winner would
be decided on a game of rock, paper, scissors, and each of the auction
houses had to send a delegate to do the Rock-Paper-Scissors for the
pursuit of this consignment. I think it’s a terrible way to
choose an auction house because he wasn’t evaluating the real reasons, but
just luck and fate. But it went their way. Fortunately,
this is not the norm. When you decide who is going to
sell something worth tens of millions of dollars where the variability between estimate
and ultimate sale price can be also a ratio of tens of
millions of dollars, perhaps it’s a really significant decision. Securing art is not the
only challenge for auction houses. It’s also about attracting talent as
competition has increased in the last decade. Well, I tell you,
it wasn’t the case. I mean, this this movement of people
between the major auction houses did not happen at all. You know, for the beginning of my
career, you know, through the nineteen nineties, you were either one the
house or the other house. I think it’s because the art business
has grown so dramatically in the last ten or fifteen years. Opportunities have changed so much as
the businesses have grown so much that we have alumni and friends
all through the art business. I have loved my job in all of my
career, but I wanted to be part of a changing organization that’s continuing to
redefine what an art auction house is and how we can
continue to evolve the art industry. That was really exciting to me. And that’s why I keep. The auction
houses must also meet the changing demands of the buyers. Buyers are getting younger and this
means engaging with buyers in ways they are comfortable digitally. Most interestingly, in the last year, we
also saw 11000 new buyers coming into Sotheby’s. Of which 60 percent
of them came through online. So we’re dedicating a lot of
effort and resources to innovating. Our online platform and the ways that
we reach out to clients online, Christie’s and so the each had over
$200 million in online sales last year. The extraordinary thing about the
art market actually is that over the last 20 years, realistically, the
top, top, top clients haven’t changed much. But below that are
in quite a way below them. Is this explosion of interest in
contemporary art worldwide from a much younger generation of people. The most obvious person being the
Japanese collector Mazower, who has made a fortune from fashion retailing on the
Internet and so is a very young age, is with us in the
market buying Bhasker at $100 million. And we would not have
seen that 20 years ago. The best indicator of what industry people
will come from is what industry is making the most money. We sell a luxury object for a lot
of money, so if it’s bankers who are making a lot of money, our audience
base will grow in the banking community. If it’s a great time,
Protec, we’ll have more tech people. If it’s a great time in real estate. We’ll have more real estate people. And the biggest driver of that then
isn’t just what people in this country are doing, but what is
changing in the global economy. So we’ve seen enormous growth
from all over Asia. But despite growing global concerns,
the auction houses remain optimistic for the art market. The political
climate in Europe and Brexit creates some trepidation. The political climate in China and
Hong Kong create some trepidation. And the tariff disputes
also create trepidation. That said, what we’ve seen is that works
of art are seen as a stable, constant store of value. They’re personally edifying to
anybody who has them. They are good for the community when
people buy them for museums or create museums. All else being in flux. It seems like an island of stability
and calm in terms of people’s desire to commune with works of art
and to live with them. The world is generally a much richer place
than it was a few years ago, and I think everybody
sees that trend continuing. I have to say that the trend is
for wealthy people to get even wealthier. The scale of the wealth in the
hands of people now is breathtaking and they are collectors and they will be
desperate to acquire iconic works of art.

100 Comments

  • The Strexil

    October 30, 2019

    Videos like these make me wanna steal paintings from a kindergarten and sell them for a million dollars.

    Reply
  • Luxus Häuser

    October 30, 2019

    Rock/Paper/Scissors is quite a useful skill.

    Reply
  • Kavoddivitae glory

    October 30, 2019

    How big are counterfeit market for this ?

    Reply
  • Aditya Singh

    October 30, 2019

    I'm sold to Sotheby's🔨

    Reply
  • Jameel Ja

    October 30, 2019

    It's just a big scam

    Reply
  • Chris Gouger

    October 30, 2019

    Protip: Art actions are one of the many forms of money laundering

    Reply
  • Arnav Kamath

    October 30, 2019

    If I sell some work and see my art at one of these auctions I'm gonna throw some hands. I dont want my art associated with money laundering

    Reply
  • charleskimbac

    October 30, 2019

    omg i want to win a blob of red too!

    Reply
  • John Doe

    October 30, 2019

    I'm a simple man, I hear money and laaundry, I click

    Reply
  • ariesone12

    October 30, 2019

    A Japanese vendor deciding an auction house by じゃんけん is the most Japanese thing I have heard of LOL

    Reply
  • Ariel Zabihi

    October 30, 2019

    CNBC owns Christie’s FYI

    Reply
  • sleepnabox

    October 30, 2019

    I wonder if you could find old tweets of the artists and takeaway millions in art valuation?

    Reply
  • emmanuel trevino

    October 30, 2019

    Everyone who understands that the art scene is just a giant tax shelter,money laundering, investing and asset management for the rich. Congratulations you have a brain. Anyone who thinks these prices are actually about the art. You played yourself 😂

    Reply
  • Gilbert Couto

    October 30, 2019

    Of course you can focus, you guys are swimming in money you can pay anyone ti do anything for you.

    Reply
  • Casa del Shed

    October 30, 2019

    The Art Market seems to be one of the places where the money for Quantitive Easing ended up. What do you reckon?

    Reply
  • Bailey Henderson

    October 30, 2019

    Too bad I am stuck in the bottom of papa murphy's I did the best art in my classes the other people are dum and took hard jobs instead of prep worker

    Reply
  • Roboko

    October 31, 2019

    I hate that this is called 'art' by media. This is 'money laundering'

    Reply
  • Producer Smileee

    October 31, 2019

    The question is ,are the creators of this arts getting their fair share?while others are making millions.

    Reply
  • super john

    October 31, 2019

    Using art for money laundering and avoiding tax. What a disgusting scam.

    Reply
  • Getardana Sentosa

    October 31, 2019

    Well, that's a bubble

    Reply
  • Sean Haggard

    October 31, 2019

    Drug dealer owes drug manufacturer $1,000,000
    Drug manufacturer buys painting for $5,000 from his escort.
    Drug dealer pays $1,000,000 for painting from manufacturer

    Reply
  • Mikey Guanipa

    October 31, 2019

    All the comments that are ignorant enough saying " I can just steal some kindergartners art blah blah blah make monies" doesn't understand how this industry works.
    It's based on name, where it's made, trends, & so much more. It's the exact equivalent of a beauty pageant; What's seen as pretty now isn't pretty in the future

    Reply
  • Zen

    October 31, 2019

    Start a bruh chain

    Reply
  • PristinePerceptions

    October 31, 2019

    New headline: How two criminal front organizations dominate the 67 billion dollar art trafficking industry.

    Reply
  • The Egg

    October 31, 2019

    It's not art its Money laundering

    Reply
  • Terrance Blakely

    October 31, 2019

    Trying saying “duopoly” three times fast 😌

    Reply
  • Aurobindo Ghosh

    October 31, 2019

    why isn't there an auction on artists?

    Reply
  • Harold Destin

    October 31, 2019

    One market I contribute absolutely nothing DIRECTLY to.

    Reply
  • Hacking tutorials

    October 31, 2019

    Replace "art market" with money "laundering market"

    Reply
  • Charlie Kong

    October 31, 2019

    Bonhams: 😢

    Reply
  • Ghost Noodle

    October 31, 2019

    1:15 A bunch of grown men doing children's work and making billions from nearly sniffing their ass cheeks?

    Reply
  • goorawoh

    October 31, 2019

    wow 100 M for just one painting. this is exactly what is wrong with the system

    Reply
  • Eduardo Mustrange

    October 31, 2019

    Money laundering industry is happy about it

    Reply
  • zhikai jia

    October 31, 2019

    Youtube needs to add the play next feature

    Reply
  • Ivan Esquilin Jr.

    October 31, 2019

    The Extremely Rich: This speaks to me. I've never seen anything so magnificent!
    Art Dealer: Yes, and for only $698 million this 4×9 Post-It note can have a home in your heart! 😘
    T.E.R. : 🤔🤔🤔 I'll give you $700 million and not a penny less!
    A. D. : 🤑 DEAL!!!!!! 😍
    Me: Cool, so universal health insurance is feasible and saves money overall, we just need to raise the taxes of the bazillionaires.
    T. E. R. : That's unaffordable.
    Me: 😡😡😡 You just paid hundreds of millions for Windows '98 clip-art!
    T. E. R. : So?

    Reply
  • LeAny

    October 31, 2019

    Amazing art 😊

    Reply
  • tommy aronson

    October 31, 2019

    I don't give a sht what rich people do to cure boredom

    Reply
  • Narsing rao

    October 31, 2019

    The VC of Sotheby's is too cute in an Art Industry 😉

    Reply
  • Finger banging Your mom

    October 31, 2019

    I just came in a sock. Do I hear 69 million?

    Reply
  • Carlson Quilop

    October 31, 2019

    Leonardo da vinci must be proud of a great artist we have in Adam neuman founder of WeArt

    Reply
  • Carlson Quilop

    October 31, 2019

    These art companies should be tagging themselves as tech companies called WeArt

    Reply
  • bardo Perez

    October 31, 2019

    ART = money laundering. The equation equals

    Reply
  • Suel Koka

    October 31, 2019

    Imagine buying a painting for $5000000 to hang it in your living room instead of rebuilding 10 schools or helping out 100 families financially.

    I know the money laundering thing, but some people there just do it for fun. They called that fun . Astonishing.
    Human nature is fascinating.

    Reply
  • gore chutiye hote hai

    October 31, 2019

    Those penting suks

    Reply
  • M 4D

    October 31, 2019

    And the lower-level art world is falling apart

    Reply
  • Sim J

    October 31, 2019

    Are these artworks made out of panda?

    Reply
  • sonnick

    October 31, 2019

    Rock paper scissors. Want to bet this guy inherited his fortune over earning it.

    Reply
  • S N

    October 31, 2019

    All these people have really weird smiles at the ends of their sentences. Like they know it’s a lot of bs

    Reply
  • mluu510

    October 31, 2019

    Old school crypto currency

    Reply
  • Al Wa

    October 31, 2019

    White people stole all of Asia's, antiques.

    Reply
  • Eusebio Escelante

    October 31, 2019

    0:33 Wonder how many artifacts stolen from India during the colonial era would be sold in auction

    Reply
  • DJ Akademiks Supreme Hoodie

    October 31, 2019

    Free art>buying "actual" art

    Reply
  • K.D.P. Ross

    October 31, 2019

    Seems like a highly-inefficient market in need of disintermediation.

    Reply
  • Kennex Masaoy

    October 31, 2019

    Is this money laundering? Hahaha

    Reply
  • human's world

    October 31, 2019

    Not make sense at all people want to waste their money unless the money has dirty secret

    Reply
  • human's world

    October 31, 2019

    Not make sense at all people want to waste their money unless the money has dirty secret

    Reply
  • Mitch Pash

    October 31, 2019

    If you’re spending 80k on art YOURE a problem in this world

    Reply
  • Jen Hughes

    October 31, 2019

    Great story here. Intriguing to hear about how art auctions have changed recently.

    Reply
  • Adam Selene

    October 31, 2019

    They used to teach kids not to uptalk/upspeak. It is weird and unprofessional.

    Reply
  • MySisterIsAFoodie

    October 31, 2019

    No flex, but I’m doing pretty well for myself (six figures a year) and yet I still can’t afford art. The fact that these art houses can sell so much means the amount of wealth in this world is sickening. Just how much money do people have? 😫😫😫😫😫

    Reply
  • cinilaknedalm

    October 31, 2019

    Just another example how money doesn't mean you got any brains. Or a real good way to launder money 😀

    Reply
  • ashlinmario sequeira

    October 31, 2019

    One of the biggest examples of legalised corruptions, scams and general greed in order to escape the public eye and tax authorities

    Reply
  • Adam Selene

    October 31, 2019

    Why would they hire someone with such an awful voice? Upspeak and creaky voice (vocal fry).

    Reply
  • GamerbyDesign

    October 31, 2019

    "The world is generally a much richer place then it was a few years ago." I've never gotten a sense of this in my neck of the woods.

    Reply
  • a prod

    October 31, 2019

    Meanwhile there are hungry people who dont know where their next meal is coming from

    Reply
  • John

    October 31, 2019

    How much do THEY Make/TAke? Clear? Step? Goes lower? Worse than Lawyers? Idk.

    Reply
  • Little Ray

    October 31, 2019

    Stolen Art 🖼 WTF

    Reply
  • Julius Vinh

    October 31, 2019

    How many of the items at those auctions are fake ? Just go to China and see how they laughed about how rich people are being fooled lol

    Reply
  • deltasquared7777

    October 31, 2019

    Museum Donations/Junk "Art"/Auction House Valuations/Tax "Avoidance" Scams

    Reply
  • Random User

    October 31, 2019

    It’s a vase for 300K, how
    I get the eye with the skull because it looks amazing.

    Reply
  • Golden Sperm

    October 31, 2019

    Stupidest thing to buy

    Reply
  • Michael

    November 1, 2019

    "art" looks like bunch of craps to me

    Reply
  • Joshua N. Ajang

    November 1, 2019

    Art industrial complex

    Reply
  • Eet given new name in eternal life Holy spirit

    November 1, 2019

    Sotheby's This:
    https://www.facebook.com/marketplace/item/551218258970604/

    Reply
  • Badboy DCX

    November 1, 2019

    True art is an EXPLOSION

    Reply
  • Sangram S Karande

    November 1, 2019

    Can you make a video on Goodwill Industries

    Reply
  • T-REX THE DINO

    November 1, 2019

    That painting cant make me fapping

    2D ANIME GIRL DID AND MORE CHEAPER!!!

    HENTAI IS ART !!!

    Reply
  • b

    November 1, 2019

    Actually there is a lot of beauty and time and effort put into something and people are willing to pay a lot of money for it.

    Reply
  • huluminus

    November 1, 2019

    Just another glorified middleman companies

    Reply
  • billy kobilca

    November 1, 2019

    When your peddling art, you understand the necessities of freeports.

    Reply
  • Theo Carbone

    November 1, 2019

    9:07…129% increase in gross sales…can you say QE. Yes Quantitative Easing.
    Not better artist…where is the new Warhol? There is not one to name. There is Liquidity of funds during same time frames as Lavish art spending saw greatest gains. Who buys a 450million dollar Monet?

    Reply
  • Theo Carbone

    November 1, 2019

    Most everything in this video is Hyperbole. It's almost comical, it deserves a SNL skit.

    Reply
  • Ice Karma

    November 1, 2019

    Your closed captions, which I note are not YouTube's automatically-generated ones… are terrible. 😞

    Reply
  • Indian

    November 1, 2019

    Stolen arts and black money

    Reply
  • samet osmani

    November 1, 2019

    idiots

    Reply
  • DripGxd_Cam

    November 1, 2019

    That thumbnail looks like something I made in my 1st grade art class

    Reply
  • john doew

    November 1, 2019

    and they all vote for Hillary go finger!

    Reply
  • Habslayer

    November 1, 2019

    how much of this was stolen from the developing world?

    Reply
  • LeaveLeague

    November 1, 2019

    can i sell my art
    if i splash red/blue/white/black paint on a canvas?

    Reply
  • Reality check

    November 2, 2019

    Criminals

    Reply
  • Gerald

    November 2, 2019

    CNBCs channel has been on point lately! Interesting, unique stories.

    Reply
  • afritunez

    November 2, 2019

    She looks like olivia jade 1:46

    Reply
  • Our Most Valuable Customer Mr. K. Dilkington

    November 2, 2019

    All these people here talking about art auctions are all about money laundering are extremely ignorant. Just repeating what they've seen in movies and police-procedurals on daytime television. Go learn a bit about art and the industry instead of complaining about people having more money than you.

    Reply
  • Moorish Brooklyn

    November 2, 2019

    Shout out to the Asian guy that had them play rock, paper scissors. Priceless. Good educational video.

    Reply
  • MKAY Thanks for Subscribing Have a nice day!

    November 2, 2019

    Gotta ask my mom where she kept all my paintings what were on the fridge.. looks like I'm on my way to becoming a millionaire

    Reply
  • MKAY Thanks for Subscribing Have a nice day!

    November 2, 2019

    Up Next: finance lessons on Tax deductible charitable contributions/donations and auctions

    Reply
  • Dylan T

    November 2, 2019

    Nobody actually buys this crap

    Reply
  • Ham ster

    November 2, 2019

    It doesn't matter if you're poor or rich we're all consumed with consumer culture. This is fueling the ever increasing inequality between the haves and have nots.

    Reply
  • The_lion_ King

    November 3, 2019

    Literally 90% of the comments:”art auctions are used for money laundering”.

    Reply
  • David

    November 3, 2019

    I don't unserstand how the France can't be number one when christie's is a french and sotheby's in part french.

    Reply

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